Lau Ming-wai, the son of flamboyant real-estate tycoon Joseph Lau Luen-hung, has made headlines again. “A university degree is no longer a path to middle class,” he said. His comment has stirred controversy. In fact, he has revealed the cruel truth.
In the past, a college education was a ticket to the middle class. Back in the 1960s, only 2 percent of Hong Kong students could get into the city’s two universities, the University of Hong Kong and the Chinese University of Hong Kong. That means college graduates were already ahead of 98 percent of their peers.
They could easily find a decent job after graduation. Some of them became professionals – lawyers, doctors and engineers – while others joined big banks or corporations as management trainees.
Back then, civil service was not attractive to many college graduates. But nowadays, college students are competing for the Assistant Clerical Officer post, which offers a starting monthly salary of HK$13,000.
Through the years, Hong Kong has expanded the post-secondary education system. The city now has 10 universities, and the admission rate has surged to nearly 30 percent. Compared to the old days when the admission rate was only 2 percent, the chance of graduates joining the ranks of the middle class is naturally much lower nowadays.
Moreover, Hong Kong, like many other developed economies, has turned into an M-shaped society, with the number of rich and poor people swelling and the ranks of the middle class diminishing.
As the economy matures, it has become increasingly difficult to climb up the social ladder through one’s own efforts. For example, a home is increasingly out of reach for most college graduates. On the other hand, if rich parents leave two to three apartments for their children, the children would immediately become middle-class.
Wealth transition and social network are having more impact on one’s career development.
Internet technologies have brought tremendous changes to society and the economy. University courses are finding it hard to catch up with the evolving economic development. This means that most college graduates are not equipped with the skills and knowledge that employers are looking for.
Also, technology is leading to the elimination of intermediaries and middle-level positions. Corporations are moving toward a flat organizational structure and leaner management. Middle-level managers are diminishing rapidly.
In his Capital in the Twenty-First Century, French economist Thomas Piketty asserts that the return of capital far exceeds the return of labor, and the wealth gap is set to worsen.
That trend has gone to the extreme in Hong Kong.
This article appeared in the Hong Kong Economic Journal on June 29
Translation by Julie Zhu
[Chinese version 中文版]
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