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The View
CommentHong Kong
Richard Wong
Richard Wong

The View | How Hong Kong’s poverty line is skewed by the elderly, to the detriment of its working-age population

  • Richard Wong says removing the elderly from the calculation of the poverty line would better reflect poverty among those of working age
  • This would allow for more targeted poverty alleviation measures for both groups, one based on consumption expenditure and the other on income

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A young man helps an elderly woman push a trolley of cardboard sheets she collected for recycling during a rainy day in Hong Kong, in May 2017. A larger proportion of Hong Kong’s elderly than its working-age population live in public housing, a fact not reflected in the city’s poverty line calculations. Photo: Sam Tsang
Richard Wong
The recent Hong Kong Poverty Situation Report 2017 announced that 1.37 million people are living below the poverty line, 25,000 more than in 2016. The poverty rate thus rose 0.2 percentage points to 20.1 per cent. After government cash transfers – including the Old Age Living Allowance and Low Income Working Family Allowance – are factored in, the poverty figure fell to 14.7 per cent, or 1.01 million, a rate similar to the previous year.
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Critics have responded by blaming the government for not doing enough to alleviate poverty. They are demanding that officials increase the minimum wage and address elderly poverty, which one commentator claims has increased by “over 40,000” people over the past five years.

This criticism is wrong. Following a great battle over Hong Kong’s poverty alleviation policy in 2013, social advocates, such as Oxfam and the Hong Kong Council of Social Service, won the day when the government agreed to adopt the poverty line definition used in Europe. Households in poverty are deemed to be those that earn less than 50 per cent of the population’s median household income – a relative economic concept of poverty.

The government’s poverty alleviation policy – the Low Income Working Family Allowance – was a direct application of the concept of the poverty line to reducing the number of economically active households deemed to be in poverty under this definition.

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However, the numbers coming forward to apply for the allowance have been only about half that initially projected by social advocates and expected by the government. This is proof that the poverty line overestimates the true number of working poor.

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