Income Polarization in the United States and Hong Kong: A Comparative Study

• Main Authors: Wu, Yiu-Sheung, 胡耀湘
• Other Authors: Chou, Jui-Hsien
• Format: Others
• Language: en_US
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/f75m47

碩士 === 國立清華大學 === 國際專業管理碩士班 === 106 === After World War II, the middle class American workers have been the main driving force propelling the country’s economic growth. Since the 1980s, a unique phenomenon—rising income polarization—has a ‘hallowing out’ effect in this group. This paper attempts to analyze its consequences and implications. To gain more insight, Hong Kong, a small and developed region with a population of 7 million, is selected for a comparative case study. It turns out that some of the potential causes to the rising income polarization are similar in nature between the two regions. Thus, the rising income polarization is not only occurring in the US. The Hong Kong government has acknowledged the seriousness of earnings inequalities, and implemented plans to fix them. The policy maker has successfully restructured and developed a high degree of economic prosperity. Yet equitable income distribution is out of reach for the society. The Trump administration in the US has lower the corporate tax rate recently. It will be interesting to see whether the tax cut benefits the firms or the middle and low-income workers. The rising demand for the highly educated (high-income) workers, combined with insufficient supply, is contributing to a higher degree of earnings inequality and polarization. Workers who do not possess college-level education face diminishing opportunities and likely end up in lower paid jobs. Income polarization will not rise if there has been adequate investment in education. As the new business environment is highly driven by the exponential acceleration of technology, schools and governments should continuously evaluate ways to adapt. This is not an easy assignment. Even some of the large well-known corporations like Motorola, Kodak, and Nokia failed to adapt.