Joseph Stiglitz at Columbia University reminded us in the Scientific American this month that just three Americans – Jeff Bezos, Bill Gates and Warren Buffett – account for more wealth than the entire poor half of the US population.
As I watched the six pallbearers bringing Walter Kwok Ping-sheung’s coffin out of St John’s Cathedral last Thursday, I wondered what share of Hong Kong’s wealth they accounted for. Maybe not half, but probably not far short.
As Donald Trump stirs his base ahead of midterm elections with fearmongering over a raggle-taggle band of would-be immigrants wandering through the Mexican countryside towards the US border, claims of victimhood in international trade, and the rise of a modern yellow peril, one has to wonder what has happened to the issue that is truly eating the US from within – extreme and entrenched inequality.
As Stiglitz noted in the Scientific American: “By most accounts, the US has the highest level of economic inequality among developed countries. It has the world’s highest per capita health expenditures yet the lowest life expectancy among comparable countries. It is also one of a few developed countries jostling for the dubious distinction of having the lowest measures of equality of opportunity.”
While the income share of America’s top 0.1 per cent has quadrupled over the past 40 years, the income share of the top 1 per cent has doubled, and that of the bottom 90 per cent has declined. How can it seem reasonable that the average US CEO earns more than 300 times what the average worker earns, or in the UK that the average FT 100 CEO earns 229 times?
This has generated a sense of stagnation and relentless struggle for most middle class Americans in a setting where evidence of wealth inequality lies tantalisingly in plain sight all around. And yet the US administration is wholly silent on the subject – as are Trump’s counterparts in so many countries in Europe.
Here in Hong Kong, lip service is being given to the subject as so many youngsters join populist protests over poor access to good jobs, and even poorer prospects of ever owning their own home. But where is the evidence of a meaningful discussion of the economic and democratic damage being done as a result of extreme inequality?
Before I protest too much, I should recall that in truth, we in Hong Kong are relatively lucky, no matter how tough life may feel.
According to data in former World Bank economist Branko Milanovic’s “Global Inequality”, published just over two years ago, to be part of the lucky “Top 1 per cent” that have walked away with most of the economic gains of the past two decades, you need to earn US$71,000 a year. That amounts to about HK$46,000 a month. Household income statistics show that over 23 per cent of Hong Kong families have household incomes above that level – compared to 12 per cent in the US, and 9 per cent in Japan.