17.5% of Macau Population Lives in Poverty

Written on April 7, 2007 by Macau

Did you know that 17.5 percent of Macau population lives in poverty?
Macau’s lawmakers, associations and analysts have said it constantly-there’s a razor sharp divide between the rich and poor. Now, a new report confirms this. “The Study About the Population’s Quality of Life” attests that the gap between Macau’s rich and poor is widening. The figures show that 17.5 percent of Macau lives in poverty, despite the fact that the city has been experiencing strong economic growth. About half the population says they’re satisfied with their lives. The study was coordinated by academics and policy analysts from Macau and Hong Kong.

Looking at the study’s results, one obvious question comes to mind: why is it that about one-sixth of the population isn’t profiting from this economic dynamism? Several reasons compound the problem. According to the report’s polls, low academic qualifications, social injustice and laziness are a few factors contributing to poverty. The report further says that inflation is another matter that effects the poor and middle-class - which, according to the Census Bureau, reached 5.15 percent in 2006. The rising price of goods has been creating serious difficulties for many families. The president of Caritas Macau-a social support NGO-Paul Pun, warns that Macau’s “economic growth is not benefiting a significant part of the population”. The same conclusion is drawn by Larry So, a social policy expert teaching at the Polytechnic Institute of Macau. He teaches his students that “economic growth doesn’t mean development”.

The housing equation
Overall, weaker purchasing power can be attributed to skyrocketing housing costs, the study says. One of the reports analysts, Paul Pun, witnessed several cases where families were in serious difficulty. Notes Pun, “in four years, rents rose from 800 patacas to 2,100 patacas”. The figures presented by the study aren’t surprising to Pun, who remarks, “They represent nearly one fifth of Macau’s population, precisely those who own no property”. Ng Kuok Cheong, a legislator from the New Democratic Macau Association, believes that more social housing is needed. No new social houses were built between 1999 and 2006 and current planned developments aren’t enough, argues Ng.
At the Governmental Policies for 2007 presentation, the Chief Executive announced the construction of four thousand new homes in the next three years. However, Ng, a pro-democracy lawmaker, accuses the government of, “reluctantly dealing with the housing problem”.

Yet another report contributor, economist Albano Martins, is also worried about real-estate situation: “If the executive takes no measures to alleviate speculation, the situation is going to get worse and salaries will shrink”.

Slack schooling
Apart from housing, the report notes that poverty and poor education are inter-related. This is particularly so for Macau’s mainland migrant workers. Ng says that tens of thousands of people who come to Macau from Guangdong during the 1980’s are being particularly effected. These young and unqualified people came to Macau to work in factories, largely in the textile sector. Now, 20 years later, many textile factories have relocated to the mainland this has left Macau with a surplus of workers who have no qualifications to join the workforce, which is mainly dominated by services. This sector is increasingly hiring only skilled labor, so less qualified workers are being left in the lurch.
However, Pun also mentions that the planned extension of the free schooling policy-until the end of high school-has been a positive step. But re-qualification still needs a lot of support, he says. This is where Caritas steps in. They organize real-world courses to unemployed people from the age of 45 to 55, teaching Mandarin and English. Still, the NGO only has room for a few dozen cases. One of the objectives of these courses is to provide middle aged people the means to work in SME’s. The problem is that some of the SME’s are also feeling the pressure from higher rents, as well as from higher wages that are now being offered by new casinos and hotels.

Double inflation
According to Ng, SME’s decreasing profit margins together with illegal manpower is creating a system of social exclusion. Ng notes that unskilled, illegal workers in Macau are forcing wages from construction and manufacturing companies to stagnate. As such, they tend to, “grow less than the inflation rate”. Which means Macau might want to institute a minimum wage, argues Larry So.

So also thinks that the government should launch a social security initiative.
“It’s important for the executive to create a mixed social security system that covers all the population”, he says. Moreover, he adds that “there is no redistribution of wealth” and that “by itself, the market does not solve everything”.

The academic has a pessimistic view of the public’s overall purchasing power.
“Many people live under a double inflation situation, one is internal and the other is external”, says So. On the one hand, the cost of essential goods is rising in Macau. On the other hand, the Yuan’s appreciation causes people to cross the border to buy food at a loss, week after week. According to the Census Bureau, all this is happening despite the fact that the average wage in the third quarter of 2006 reached 6,800 patacas. And this was an increase of nearly one thousand patacas compared with the same period of 2005; basically a 16 percent rise.

The government’s programs
The study also looked at what’s the government is doing. It highlights the Social Action Institute (SAI), a government assistance arm that provides aid to the needy. Besides supporting the elderly, children and teenagers, fighting and preventing drug addiction, the SAI also provides support to individuals or families in need of economic assistance. They also cover people who are suffering from serious illnesses, have handicaps or are single parent families.
One of the most poverty stricken groups is the elderly. Since 2005, the government has handed out subsidies to people aged 65 or older. They receive between 100 and 1,2000 patacas per month.

The President of the Social Action Institute, Ip Peng Kim, said that one of the program’s objectives is to “encourage a spirit of self-undertaking, of responsibility” to those who are economically lacking. Two such programs, the “The Employment Community Support Plan”, and “Service Project about Positive Life” in particular have made positive impacts.

Grinning gamblers
While many analysts worry about the wage gap, the report is upbeat about the quality of life. About 30 percent of the people polled say they feel “very satisfied” with their current situation. As for the future, 47 percent are “very optimistic” about the next three years of their lives. More than half said that they’re happy with the gambling industry’s profits. Another 20 percent are dissatisfied with the way things are going with casinos. Albano Martins believes that only those working in the gaming industry have been enjoying better wages. Says Martins, “A large part of the population, with no links to the gambling sector, watch as their buying power decreases”. The majority of people surveyed are also concerned with underprivileged and marginal groups. Who’s happiest? The study says that older, unskilled males, born outside Macau, feel the “most satisfied” with their lives. Go figure.