The scourge of inflation really hurts
The recent waves of strike action have been the sign of discontent expressed by the lower class, who have their actual income badly shrunk by soaring inflation. With the approach of election, legislators from the Labor Sector must take a more active role in staging industrial action in order to secure votes in the coming election. It is therefore a reasonable guess to expect more strikes to come.
The causes of inflation are multiple. Rising oil and food prices are to blame of course. In fact, however, the depreciation of the U.S. currency is the actual culprit behind the scene. As our currency is pegged with the greenback, there is nothing our monetary policy can do to deal with inflation. The credit crunch and dying property market will drag the U.S economy to the brink of recession. At the same time, the rising oil prices and depreciated U.S currency have fueled inflation. The Fed has to choose between rescuing the country from recession and curbing inflation. As the Fed seems to favor the former, the chance for the Fed to raise the interest rate to a level sufficient to curb inflation (2% above the CPI) is unlikely in the backdrop of shrinking property market.
The lower classes feel the hit of inflation most. During the SARS outbreak in 2003, working classes had their salaries cut to save their jobs and the companies as well. Despite the recovery of local economy since 2003, lower classes have seldom benefited from the growth. Instead, they have to work even harder and longer to secure their jobs with wages being eaten up by inflation and not a penny is left after deduction of all necessary expenditure from their income.
The government’s ‘relief policies’ only have short-term effect. If the government fails to tackle the structural problems in our society, the grumpy emotion of people will still prevail. One of the major problems facing us is the lack of upward mobility in our society. Financial services are one of the major pillars of our economy and seem to be the only sector strongly backed by the government. Economic growth in recent years has only benefited those professionals working in the fields of finance, accounting and banking. Workers from the lower class have no way to gain a share of the growth. Without much bargaining power, they find it hard to keep their jobs even with their wages slashed by unscrupulous bosses.
In those good old days, college degrees and professional accreditations were not the only elements leading to a successful career life. To be an apprentice and acquire a particular skill could possibly pave the way to become a business owner. Opportunities for upward mobility were everywhere. Today our city is embraced by blocks of shopping malls, which only favor the giant chain-stores to do business but not the small ones. As the social landscape of our city tends to become homogenous, less business opportunities are available for those who want to move up the social ladder. A society with a cultural diversity favors the development of diverse economic activities, which facilitate social mobility among the lower classes.
The efforts of non-governmental organizations to ease the pain of the poor at the time of fierce inflation such as the setting up of ‘food banks’ and ‘price busters’ are most welcome. If they move a step forward and work in collaboration with the government to start more social enterprise and keep society vibrant by maintaining its cultural diversity. There will be more ways out for the poor to escape from their plight.
The wide gap between rich and poor is nothing unfamiliar to Hong Kong people. The conflict has surfaced in the wake of soaring inflation. The government should not turn a blind eye to the problem. It is the government’s responsibility to maintain a just business environment and provide a level playing field for all participants. The enactment of ‘Competition law’ should be given a thorough consideration. A culturally-diverse society is conducive to cultivation of vibrant economic activities. Officials from the Planning Department should put the maintenance of cultural heterogeneity on top of the agenda before launching the urban renewal projects. Big business owners can demonstrate their corporate social responsibility by implementing ‘minimum wages’ and ‘maximum working hours’ policies for the lower working classes. This not only gives the public the positive image of the companies but also effectively sooth the conflict between rich and poor.
The causes of inflation are multiple. Rising oil and food prices are to blame of course. In fact, however, the depreciation of the U.S. currency is the actual culprit behind the scene. As our currency is pegged with the greenback, there is nothing our monetary policy can do to deal with inflation. The credit crunch and dying property market will drag the U.S economy to the brink of recession. At the same time, the rising oil prices and depreciated U.S currency have fueled inflation. The Fed has to choose between rescuing the country from recession and curbing inflation. As the Fed seems to favor the former, the chance for the Fed to raise the interest rate to a level sufficient to curb inflation (2% above the CPI) is unlikely in the backdrop of shrinking property market.
The lower classes feel the hit of inflation most. During the SARS outbreak in 2003, working classes had their salaries cut to save their jobs and the companies as well. Despite the recovery of local economy since 2003, lower classes have seldom benefited from the growth. Instead, they have to work even harder and longer to secure their jobs with wages being eaten up by inflation and not a penny is left after deduction of all necessary expenditure from their income.
The government’s ‘relief policies’ only have short-term effect. If the government fails to tackle the structural problems in our society, the grumpy emotion of people will still prevail. One of the major problems facing us is the lack of upward mobility in our society. Financial services are one of the major pillars of our economy and seem to be the only sector strongly backed by the government. Economic growth in recent years has only benefited those professionals working in the fields of finance, accounting and banking. Workers from the lower class have no way to gain a share of the growth. Without much bargaining power, they find it hard to keep their jobs even with their wages slashed by unscrupulous bosses.
In those good old days, college degrees and professional accreditations were not the only elements leading to a successful career life. To be an apprentice and acquire a particular skill could possibly pave the way to become a business owner. Opportunities for upward mobility were everywhere. Today our city is embraced by blocks of shopping malls, which only favor the giant chain-stores to do business but not the small ones. As the social landscape of our city tends to become homogenous, less business opportunities are available for those who want to move up the social ladder. A society with a cultural diversity favors the development of diverse economic activities, which facilitate social mobility among the lower classes.
The efforts of non-governmental organizations to ease the pain of the poor at the time of fierce inflation such as the setting up of ‘food banks’ and ‘price busters’ are most welcome. If they move a step forward and work in collaboration with the government to start more social enterprise and keep society vibrant by maintaining its cultural diversity. There will be more ways out for the poor to escape from their plight.
The wide gap between rich and poor is nothing unfamiliar to Hong Kong people. The conflict has surfaced in the wake of soaring inflation. The government should not turn a blind eye to the problem. It is the government’s responsibility to maintain a just business environment and provide a level playing field for all participants. The enactment of ‘Competition law’ should be given a thorough consideration. A culturally-diverse society is conducive to cultivation of vibrant economic activities. Officials from the Planning Department should put the maintenance of cultural heterogeneity on top of the agenda before launching the urban renewal projects. Big business owners can demonstrate their corporate social responsibility by implementing ‘minimum wages’ and ‘maximum working hours’ policies for the lower working classes. This not only gives the public the positive image of the companies but also effectively sooth the conflict between rich and poor.
Harmonious society is far from reality if the government only pays lip service to its promise. It can only be built and sustained by the concerted and devoted efforts from all parties concerned.
posted by K W Ho @ 11:50 PM
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