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The inequality involves different dimensions in the global, for example, income inequality, gender inequality and racial inequality, etc. The widening income inequality is a decisive challenge of our time. The gap between rich and poor has reached its highest level in decades. According to the book of ‘‘The New Geography of Global Income Inequality’’, inequality is defined as the absence of equality. Income inequality can occur at different levels of aggregation; the income can vary across individual, such as the individual level in inequality, household level and between nation level. In the following paragraphs, it will use the income inequality of individual as an example to illustrate. Globally, the income and wealth wage gap has been continuing over years and years. It also impacts in Hong Kong society. Thus, the inequality on gender and race will be applied as an example, to illustrate the impacts and the reasons for curtail. In addition, how social politic and welfare to curtail the income and wealth wage gap.
Taking gender income inequality as an example, the richest people in the world are overwhelmingly men, while women are more likely to be poor than men. The Hong Kong Inequality Report (2018) of the Oxford Committee for Famine Relief reported that the gender wage gap in the world was 14.1%. Therefore, around the globe, the average income of women is lower than men. This situation not only appeared in global but also appeared in Hong Kong. In Hong Kong, the median monthly employment income of male employed persons is higher than that of female employed persons from 1996 to 2017. The median monthly employment incomes of males employed persons were $19000 while the incomes of females were $13000 only, which showed the gender inequality of wage.
Due to the causes of gender income inequality, some of the Hong Kong women are unable to work because of their family obligations. Hence, they are only available to work for a part-time job or the job with short working hours. However, those jobs are paying the minimum wage, just offering a little protection and do not help with poverty alleviation. There is another reason causing gender income inequality, which is the ‘‘motherhood penalty’’. Each father incurred an average wage increase of over 6% with each child, but the mother experience an average 4% decreased in salary with each child. As a woman, who is a mother may facing the employer bias and being ‘‘motherhood penalty’’. The employers have irrational thoughts about a mother, they think that takes care of a children will affect women working ability, so it leads to a negative impact on women’s income. Those are the reasons cause by gender income inequality.
Apart from the gender income and welfare inequality, race income and welfare inequality is another social issue that worthy concern. In line with the ‘‘Hong Kong Poverty Situation Report on Ethnic Minorities 2016’’, to exclude the foreign domestic helpers, there were 254 700 ethnic minorities in Hong Kong in 2016. In addition, the report also indicated that there was a wide wage gap in race income. The median incomes of White households and Japanese & Korean were $500,000 and $33,800. However, the median incomes of Thais and Indonesians households were $105,000 and $108,000. Furthermore, the ethnic minorities responded that after hired from a job, their salaries are lower than Hong Kong people. As the same job, the income of Hong Kong people was $700, but the ethnic minority was only $500 per a day. Hence, the income between different races was inequality in Hong Kong. Due to the causes of race income inequality, the number of incumbents among Pakistani households is low. It is because their family members had to take care of several children, so they were lack of time to work and they bore heavy financial burdens.
Inequality incurring severe impacts on people, the impacts are twofold, which have a positive impact and negative impact. According to Davis and Moore (1945), social stratification is functionally important. Social stratification represents the inherently unequal value of a different job. The different jobs have different income. Moreover, social stratification is beneficial to promote excellence, productivity and efficiency. Hence, it provides people with something to fight for. The income inequality in a society is social stratification. The people with low income, such as women and ethnic minorities, they will fight for more income through excellence, productivity and efficiency.
However, the negative impact of inequality is more than the positive impacts. To commence with, inequality effect on the social stability. Inequality is more likely to induce criminal behavior, it will affect the social stability and social order. Block and Heineke (1975) put forward that the differential wage and income level lead to criminal behavior. The low income individuals, such as some women and ethnic minorities, the poverty group in the society. They may try to improve the current situation or change in wealth by criminal behavior, for example, robberies, burglary and thefts. The greater inequality causes the greater occurrence of crime. These crimes will danger social stability and safety. Thus, inequality leads to the negative impact of crimes.
Inequality affects citizen’s life quality. According to the Credit Suisse’s 2014 report, the higher decline of median monthly household income was HK$95,000, and the lowest decline was only earned HK$5,000. At the same time, the wealthiest 10% of people in Hong Kong owned 77.5% of the city’s wealth. The low-income household only has a few resources for their daily life, but the high-income household have a wide range of resources to have a better life. For instance, some of the ethnic minorities and women were facing the problem of low income. Therefore, greater inequality causes a greater differential of life quality in society.
Moreover, inequality causes unharmonious society. The women and ethnic minorities who work hard to increase their income and work hard. Merely, the economy is controlling by the rich person and suppresses their income. Even though they work so hard, there is always a wage gap between them and the high income. They detest the high income and rich person in society. The anti-rich sentiments will occur, which affect social harmony. Consequently, inequality incurring severe impacts on people and society, so it is significant curtail inequality.
In suggestion, to curtail the inequality by redistributive policies, improve the current policy and welfare. Firstly, the Government should redistribute income and wealth through social mechanisms, transferring income and wealth from individuals to others. The consumption tax is essential to curtail the inequality. Consumption tax is a tax on the consumption of goods and services. The richer or higher income person, have a higher consumption ability. The more they consume, the more consumption tax they need to pay. After collecting the consumption taxes from the citizen, the Government can redistribute income through social mechanisms. Thus, the Government can use those consumption taxes to enhance the social support service or subsidy for low-income people.
Secondly, the above suggestion is to redistributive policies, then the tax income will be increased, so the government could use those tax incomes for redistributive the policies. The government could enhance employers’ awareness of Family-friendly Employment Practices. Women with family commitments often have to juggle between family and job. It ensures that women will not be ‘‘motherhood penalty’’, so the process of giving birth, breastfeeding and family responsibilities will not effect on their employment, job opportunities or salary, etc., providing an inequality to women in the workplace.
Thirdly, due to the gender income inequality, the Hong Kong Government should resolve the ‘‘motherhood penalty’’ by extending the male paternity leave. Take care of the child always seen as a female responsibility. Many countries extended the male paternity leave. It allows husbands to share the responsibility of child caring so that women can return to the workplace as soon as possible. In Hong Kong, the policy of male paternity leave which only providing five days, but Singapore subsidizing two weeks of paid male paternity leave for the father. Also, Finland providing up to eight weeks’ male paternity leave. Hong Kong Government should extend the male paternity leave to reduce the impact on ‘‘motherhood penalty’’ and because of giving birth. It can decrease the employer bias on women who are being a mother, so employers are more willing to hire women with a higher salary and increase women’s income level.
For ethnic minorities, to strengthen the protection on “Race Discrimination Ordinance” are also necessary. In fact, race discrimination is common in Hong Kong society. Some of the employers do not hire the employee because they are in a different race. Thus, their employment chances are weaker than local people because they are ethnic minorities. Also, it is common to see the unequal pay for equal work, which is inequality to their income. It is hoped that the “Race Discrimination Ordinance” could strengthen the protection of equal pay for equal work, to improve the situation of inequality. In addition, after redistributive policies, the government could increase the Community Care Services for ethnic minorities. Most of the ethnic minorities family had to take care of several children, so they are lack of time to work and earn extra income. The Community Care Services for ethnic minorities can settle their caring problem and provide more free time for them to work outside.
Taking everything into accounts, in Hong Kong, we should pay close attention to the social issue of inequality, such as the inequality on gender income and race income. According to the gender income and wealth inequality, most of the women are poor than men and the richest people in there are overwhelmingly men in the whole of the world. The gender income inequality of Hong Kong is serious than the world overall. Gender income inequality is a ‘‘motherhood penalty’’ for women. Usually, women need to give birth a baby and tacking the responsibilities of child caring, so they are only available to work for a part-time job. Moreover, there is some bias from employers toward women. They have irrational thoughts on women, the women who have given birth or the maternity leave will affect their working ability. Likewise, race income inequality is another serious issue in Hong Kong. Because of race discrimination, the ethnic minority facing the problem of unequal pay for equal work. Ethnic minorities have a lower income than the local people when they are working for the same job. The income and wealth inequality can be a social stratification, which brings a positive impact on society. Yet, inequality will bring negative impact to the society, for example, social stability, differential of life quality and unharmonious society. The inequality can be solved by redistributive policies, improving the current police and wealth.
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