A decade ago, Freelancers Union put up an advertisement in the New York subway that read “Welcome to Middle Class Poverty”.
Many were puzzled by the advertisement because the general opinion at that time was that the middle class was relatively well-off and should never fall into the category of the underprivileged.
However, the harsh fact is the middle class in the US, once the main pillar of American society, are increasingly feeling the pinch these days thanks to the worsening wealth gap and the unequal distribution of wealth.
According to a 2005 study by the US Congress, the rich (i.e. those making more than US$91,705 a year) held nearly half of the total wealth in the US, despite accounting for just 20 percent of the population.
By contrast, 40 percent of people earned less than US$36,000 a year. This group accounted for only 12 percent of the combined wealth of the country.
The income crisis facing the middle class was so immense that it became the main theme in the US presidential election in 2004 when Democratic candidate John Kerry railed against the Bush administration for being unable to redress the unequal distribution of wealth and the widening wealth gap.
He established the Middle Class Misery Index to show how the middle class were worse off under the Bush administration.
So, if an increasing number of US middle class families are feeling that their lives are a wreck and miserable, what about the middle class in Hong Kong?
As far as housing is concerned, Hong Kong is in the midst of its worst housing affordability crisis.
With property prices continuing to soar, many young couples find it impossible to save enough to buy their own home.
As a result, many of them are forced into rentals. With rent continuing to skyrocket in recent years, this alone has taken a heavy toll on the financial well-being of the middle class.
The fact that the government has been working aggressively to outsource some of its key health services such as coronary angioplasty and cataract extraction to private hospitals and has been asking patients to bear the cost of these services has imposed extra financial burden on middle class families.
Then comes the education cost.
Today the tuition cost for an undergraduate student is roughly HK$40,000 (US$5,160) to HK$50,000 a year.
The annual tuition fee for a master’s program has risen to HK$60,000. For a family that have two or more children, the cost for their university education would be absolutely astounding.
I believe the Middle Class Misery Index of Hong Kong would be just as grave as that in the US, if not worse.
This article appeared in the Hong Kong Economic Journal on Nov. 30
Translation by Alan Lee with additional reporting
[Chinese version 中文版]
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