Wealth Gap

Topics: Economic inequality, Lorenz curve, Economics Pages: 5 (1439 words) Published: June 11, 2011
The Wealth Gap In Hong Kong
Comparing to the near area,like Singapore,Hong Kong's Gini coefficient is more higher and ranked top in the world.Even the wealth gap is not common in western societies,however,it is no doubt that wealth gap has threatened the Hong Kong most. With the change of economic mode in Hong Kong ,it trend to knowledge-based economy rather than manufacturing industry so that a large number of worker are unemployed immediately,in the other hand,a lot of high-class people are benefited by the new mode economy.Therefore the wealth disparity has become more serious. As the result of,those low-class people are low education and low skill so it is difficult for them to survival in the current Hong Kong.According to the structure of Hong Kong economy, mainly have six industries.However,those trades need higher education and skill.Thus it can been seem why there is lot of low-class people has been unemployed. Aside from what i mentioned above,another reason of extreme disparity between rich and poor

九七金融風暴 During 1997, there is a stock crisis

港經濟結構轉型,做成制造業工資增長緩慢或甚至出現負增長的情況 Because of economic mode; change in HK, the manufacturing industry has negative growth

高技術的專業職位工資增長大幅高於低技術的基層職位 The wage of highly skill worker are increasing faster than the the low skill workers.

輸入外地勞工進一步打擊低工資、低技術勞工的就業機會 Importing workers overseas making the local HK people who have low skills have no job

俸稅不均等 the inequality of the tax structure

香港人口老化,缺乏全面的退休保障制度 The HK population is aging.  There is no complete retirement plan to protect the old generation.

缺乏貧窮線之設,缺乏指標以制度福利設施 There isn't enough welfare program of HK governement to help to poor

The much talked about widening wealth gap in Hong Kong has raised the question that touches on the very heart of the city's economic policy: What role does the government have in wealth distribution? Even the most ardent disciples of the guiding principle of small government, big businesses have agreed that the worsening economic injustice, as perceived by an increasing number of people in Hong Kong, can give rise to social discontent, which cannot be ignored by any responsible government, big or small. There is no doubt that the Hong Kong government is well aware of the situation. Indeed, the Hong Kong government, over the past many years, has done quite a lot in addressing the issue, albeit indirectly through housing subsidies, affordable medical service and various welfare benefits to the most needy. As the wealth gap continues to widen, the call for more direct government intervention is getting louder. But other than moral persuasion, there is little the government can do in achieving a more even distribution of wealth in Hong Kong. In the context of the guiding economic principle of a free market environment, the room for direct intervention is extremely limited. In many developed economies, the problems arising from a widening of the wealth gap between the rich and poor can be addressed, to some extent at least, through fiscal policies. But making any material changes to Hong Kong's long-cherished low and simple tax regime could risk undermining foreign and domestic investors' confidence in the government's commitment to preserving the very fabric of the market-oriented economy. With the salary tax burden falling on no more than 20 percent of the working population, any discussion of taxing the rich to subsidize the poor seems rather pointless. The government did on numerous occasions raise the rates of corporate and salary taxes to cover budgetary shortfalls in economic down-cycles. It was always understood that such adjustments were nothing more than short-term budgetary fine-tuning that would be reversed once the economic tide began to turn. There is, of course, the strong argument for the government to widen the tax base. New sources of revenue are needed to finance the improvement and expansion of public welfare programs, primarily medical services, to...
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