Hong Kong challenge: Can you live on HK$12,000 a month?

July 08, 2015 13:58
Many Hong Kong workers can hardly make ends meet with a monthly pay of HK$12,000 or even lower. Photo: Internet

No one can deny that living in Hong Kong is expensive.

The latest annual survey by the New York-based human resources consulting firm Mercer finds our city the second most expensive among 207 urban centers in the world. (The top place is claimed by Luanda, capital of oil-rich Angola in southwestern Africa.)

Although the report is intended to gauge remuneration packages for expatriates, the high cost of living in Hong Kong is a cross borne daily by every worker in the city.

Many wage earners are struggling on the verge of poverty as their income remains stagnant despite a moderately expanding economy.

A short film (《月入三萬的香港人》) about how hard life is for a Hongkonger earning HK$30,000 a month has received more than a million hits on YouTube.

But his life would seem like paradise for most other workers in the city, considering that the latest figures from the Census and Statistics Department show that median monthly wage across all industries in Hong Kong, excluding government employees, stood at HK$14,800 in mid-2014.

A gloomier fact is that, although landing a job is not so difficult nowadays, the starting salary for fresh graduates with an associate degree or higher has been hovering around HK$12,000 for the past three years, according to a report from the Hong Kong Economic Journal, and this is mainly due to the glut of college graduates and job seekers from overseas.

You might think the figure is somewhat underestimated as there are many pursuing a career in high-income sectors like financial or medical services.

But government statistics in 2013 revealed that the median monthly salary for workers aged between 15 and 24 — of which 40 percent are tertiary degree holders — was at a disgraceful level of HK$8,000. A 2014 survey by human resources firm CTgoodjobs showed that the median starting salary for fresh graduates was between HK$11,000 and HK$13,750.

So how is life in Hong Kong for someone who is earning HK$12,000 a month?

The first thing to be clear about is that, except for your probation period, your take-home pay is actually just HK$11,360 after your MPF contribution (at a rate of 5 percent) and salary tax are deducted.

If you're not fortunate enough to be living in your parents’ house, then a third or even half of your money will go to your rent, no question about that. And forget about having a spacious flat; even a 350 square foot shoebox in Tin Shui Wai now costs almost HK$10,000 to rent.

You have two options: either find a roommate (or roommates) or rent a subdivided flat barely larger than the size of a couple of toilet cubicles. (Hong Kong is fast gaining a worldwide reputation for this sort of accommodation.) In both scenarios, forget about quietude and privacy. 

Media reports say the average monthly rent for a cage-like bedspace in some shabby tenement buildings in To Kwa Wan or Tai Kok Tsui is about HK$2,000 to HK$3,000, while the cost of more “luxurious” subdivided flats with at least a door, a private flush toilet and shower range from HK$3,500 to HK$7,000, depending on whether there is a window, which storey and its proximity to a bus stop or MTR station.

So the average rent is HK$4,500. That means you have HK$6,860 left.

That doesn't sound so bad, does it? But don’t forget you need to feed yourself.

A lunch at a working-class restaurant chain like Café de Coral or Maxim's may be well over HK$45 and supper HK$55. You may choose a cheaper afternoon tea set or go to a cha chaan teng, but all told, you'll still be spending HK$130 or above for your daily food expenses. That amounts to around HK$4,000 a month.

Congratulations! You've still got HK$2,860 left. But wait, you need to take a ride to and from the office.

Inevitably, you'll settle for the MTR, and these days you have to dig deeper into your pocket as the railway operator, which is sitting on a gigantic 2014 net profit of HK$11.6 billion, has hiked fares by 4.3 percent starting June, the sixth year it has raised fares since 2010.

Any medium-distance ride across the harbor will cost over HK$10 so the cost per month can be HK$500 — or more if you live in New Territories and have to commute to urban areas for work.

Telecom services, of course, are a daily necessity. Competition among carriers is keen, but that doesn't seem to reflect on their fees: a fixed 5GB data and voice call plan costs around HK$350.

Other trivial expenses include, but not limited to: water, gas, electricity, broadband service, basic beauty and skin care products (for young ladies), clothing, etc. All these will cost you HK$400 to HK$500 each month, although the amount may vary substantially according to individual taste and habits.

So now you have no more than HK$1,600 left.

Already in a relationship? You also have to invest in this thing to sustain and enhance it, like going to movies, buying gifts, traveling once or twice a year. It’s safe to say a guy needs to set aside HK$500, at least, for regular dates, while a girl will definitely have to spend more on clothes, perfume, fitness gym membership and the whole caboodle.

So, you may just have HK$1,000 left, either for any ad hoc expenditure or, like your parents have always told you, to save for the future.

A few months ago, Lau Ming-wai, son of realty tycoon Joseph Lau Luen-hung and chairman of the Commission on Youth, urged his poorer peers to save “at least HK$3,000 every month if you earn HK$10,000” in order to afford a home of their own.

Now, we wonder, how could we manage to save that much given the high costs of the most basic items we can't do without?

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Most young people generally see a bleak future and think they won't be able to afford a home in their lifetime. Photo: YouTube
Wage earners can choose to live in cramped subdivided flats, but the rent still takes up a third or even half of their monthly income. Photo: Sing Pao
Chief Executive Leung Chun-ying visits a family living in a 50 square foot subdivided flat. He can commiserate with them but still he owns a villa on the Peak and lives in the spacious Government House in Central. Photo: RTHK

EJ Insight writer