The Death Of Social Mobility

On the face of it, Tin Shui Wai isn't the embodiment of urban blight. Stacked up against France's racially charged public-housing estates or America's crumbling inner-city ''projects," Hong Kong's newest satellite town looks remarkably accommodating. But the landscaped common areas, colorful residential blocks and playgrounds mask an undeniable fact: the community of 271,000, where scores of narrow towers cluster like bamboo shoots in a thicket soaring 40 stories skyward, is a ghetto. Local unemployment stands at 20 percent, some five times the Hong Kong average. The local schools are some of Hong Kong's worst, and many of the residents who do hold jobs are among the working poor, a class that's burgeoning. Tin Shui Wai signifies not only the social and economic challenges facing Hong Kong but also those gripping its developmental cohort, a group of economies once lauded as East Asia's ''four tigers." That moniker—pinned to Hong Kong, Singapore, South Korea and Taiwan back in the 1980s—hailed the trade-based economies that overcame resource shortages, widespread poverty and political turmoil to become industrialized, middle-class societies in a single generation. Along the way, their best and brightest rose from humble origins to become today's tycoons, top scholars and political leaders.

One needn't look farther than the various statehouses to view the beneficiaries of social mobility. Hong Kong's Chief Executive Donald Tsang grew up in public housing. Taiwanese President Chen Shui-bian, son of tenant farmers, graduated at the top of his class in law school. South Korean President Roh Moo Hyun was too poor to attend college but nonetheless passed the bar exam and practiced human-rights law. All three embody the boundless opportunities their fast-developing societies offered, though each rules during a time when the doors that were opened to them are shutting in the faces of today's youngsters. These current leaders ''come from a generation that had a fairly equal starting point; everyone was low-income and there was a level playing field," says John Sayer, head of Oxfam Hong Kong. ''Now we're getting more class divisions."

The tigers now are finding themselves in a situation loosely analogous to that which beset the American rust belt in the 1980s, when factory towns like Detroit and Pittsburgh went into decline and a middle class built on career manufacturing jobs suffered as a result. The tigers aren't rust belts, to be sure, but as the drivers of growth have shifted away from manufacturing into various new industries and services, it's no longer possible for young entrants into the labor market with little education and few skills to land jobs that pay living wages.

The new labor market is rigidly segmented: white-collar professionals occupy the top rungs of the ladder, a burgeoning service sector peopled by legions of temps and part-timers anchor the bottom, and the middle class clings nervously in between, even during periods of robust economic growth. ''As the tiger economies mature, they face economic polarization between the haves and have-nots," says Lee Jie Hoon, an economist at the Samsung Economic Research Institute in Seoul. ''Wealth inequality is like the shadow of economic growth."

In their prime, the tigers were voracious job creators. Although each followed a different growth strategy—South Korea built heavy industry, Taiwan mobilized small and medium enterprises, Singapore nurtured state-linked companies and Hong Kong embraced laissez-faire capitalism—all of them consumed a flood of surplus labor. Workers earned enough to feed their families, educate their kids, buy modest homes and even start businesses.

One of them was Koh Yun Yeol, a tireless 50-year-old whose most indelible childhood memory is hunger. Koh became a welder, worked his way through vocational school and, at the age of 21, landed a plum job at Hyundai Heavy Industries, the world's largest shipbuilder today. Three decades later Koh has attained the status of a ''steel maestro"—Hyundai's highest ranking for shipbuilders—and earns $70,000 a year. He sent his two sons to university, lives with his wife in a cozy apartment they own and even enjoyed a vacation to Europe at the company's expense in 2004. Koh, who faces mandatory retirement in eight years, isn't one bit worried. ''I have enough money to support me and my family," he says. ''I thank my company and my country for allowing me a wonderful life."

His successors won't likely feel as grateful. Jobs like Koh's began disappearing in the late 1980s as China, Vietnam and other low-cost economies opened to investment. Since then the tigers have moved many manufacturing jobs offshore and refocused into areas like software engineering, high-tech services, finance and logistics. While that has created some new opportunities for college-trained bankers, stockbrokers, supply-chain managers and software engineers, there are fewer offerings for the majority of the labor market. In Hong Kong, where more than 600,000 factory jobs have disappeared since 1986, the service sector has become the main employment driver. But most openings pay rock-bottom wages for low-skilled positions offering few, if any, benefits; cleaners, salesclerks and security guards—the mainstay occupations for many Tin Shui Wai residents—pay just $400 a month to start. ''In the past, grass-roots people became entrepreneurs or factory bosses. They had hope," says Wong Hung, a social-work professor at the Chinese University of Hong Kong (CUHK). ''Now it is almost impossible for the working class to have social mobility to the middle class."

The situation is exacerbated by a crisis in education. For starters, top schools (most government-subsidized public institutions) are filling their admissions rosters with the sons and daughters of the new elite, leaving applicants who don't make the grade to attend private schools that charge higher tuition, have inferior reputations and don't channel their graduates into coveted career jobs nearly as often. By the numbers, a third of professionals in South Korea send their scion to four-year universities, compared with just 7 percent of farmers and blue-collar workers. And in Taiwan, more than 60 percent of the incoming freshmen at National Taiwan University in 2004 matriculated from 10 elite high schools.

Educators say access is impartial, and it is true that most university admissions are test-based. But they also acknowledge a rich-poor disparity that has much to do with the out-of-class support zealous parents with means lavish on their stressed-out kids. That routinely includes fees for private tutors, cram schools, extracurricular activities and even summers at foreign-language camps abroad—vital aids for eventual entry into a top university. In Korea, the government says, spending on private education (the bulk of it extracurricular) is four times the OECD average. ''In the 1970s, most [Hong Kong] families were poor, but now those in the middle class contribute resources to buy musical instruments and sports equipment or pay for other academic training," says Wong from CUHK. ''And now many schools ask students to do projects that require things like digital cameras and Internet access. The education gap has become wider."

Students not ranked at the top of their classes in high school routinely turn to private universities or two-year junior colleges, using grants and loans to defray costs. (Singapore, with its preponderance of public technical institutes, polytechnics and universities, is the exception.) These institutions—the worst of which offer scant academic rigor—yield a smaller bang for the buck in terms of job prospects after graduation, but they've contributed most to an explosion of tertiary education over the past decade.

In Korea, eight in 10 high-school grads now advance to a two- or four-year college. In Taiwan, with a population of 23 million, the undergraduate rolls have tripled since 1996 to some 930,000 today, according to official statistics. In both countries, educators are now debating whether too many students attend university, and are looking at forced mergers or more rigid accreditation procedures by which the student population might be trimmed.

The problem: education doesn't always translate into better job prospects. Korean graduates of junior colleges or less-known provincial four-year colleges face enormous difficulties in finding even menial jobs. Early this year, for example, when a ward office in Busan sought to hire four street sweepers, more than half the 103 applicants had more than two years of college on their r?sum?s. And in a recent survey, 68 percent of Korean college students expressed a ''strong sense of crisis" over the tough job market they'll soon face. In Taiwan, meanwhile, of the 250,000 students who graduated this past June, about 105,000 remained unemployed at the end of September.

''Yesterday, at a department store, I noticed that one of the salesgirls at the cosmetics counter was my former student," says a professor at a prominent private university in Taipei. ''Think about that: a college graduate selling makeup and living on commissions. That used to be the kind of job a high-school student did." (The source, fearing repercussions from supervisors, asked that the university not be named.)

All this is happening amid the most robust economic growth in a decade. But the fruits of today's good times are enjoyed disproportionately by the rich, widening societal divisions. At Tin Shui Wai, a series of disturbing incidents portray a community in crisis. The latest: the murder-suicide by a distraught mother who threw her two children off a balcony and then jumped 24 floors to her own death in October. The woman, a Chinese immigrant with a history of mental illness, had been living on welfare. The father had been hospitalized for cancer treatment. The suicide note she left reportedly said that she didn't think she could cope raising the children on her own.

The tragedy has triggered two debates: one specific to the new town and another on Hong Kong's escalating poverty problem.

Area residents say high transportation costs, a dearth of local jobs and the government's policy of assigning all new immigrants from mainland China flats in its public-housing estates have rendered it a slum. Last week Hong Kong's Labor Secretary Matthew Cheung met lawmakers, social activists and residents to pledge comprehensive strategies that will address local woes, to be released by January. As the South China Morning Post reported, he endured an emotional meeting with residents. Among them: a pregnant woman who tossed coins on the ground and declared: ''Giving out coin by coin by coin, the government treats us like beggars."

Not coincidentally, Hong Kong announced last week that it soon will begin consultations aimed at drafting the territory's first statutory minimum-wage law, reversing its long-held position that artificial salary floors could undermine the city's competitiveness. Earlier in October, Chief Executive Donald Tsang said in his annual policy address that the city must ''facilitate social mobility, help the poor, create job opportunities and promote a caring culture," a sideways acknowledgment that the three-year economic boom has disproportionately benefited the rich.

Even in Singapore, where high growth has created the best labor market among the tigers, Prime Minister Lee Hsien Loong warned earlier in the year that the city's income gap posed problems. During a September meeting with National University of Singapore students, he reportedly took a question from one expressing fear that he might fall from the middle class as the city increasingly catered to ''foreigners, tourists and the rich." Lee responded by saying that Singapore ''has to be a place where the vast majority ... enjoys a high quality of life," otherwise voters would abandon his party.

The income gap is indeed political. Which is why the two most democratic tigers have done the most to redress inequality. Under Chen, Taiwan has expanded national health-insurance coverage, boosted educational stipends and low-interest loans, and bolstered protections offered workers, farmers and the elderly. In South Korea, President Roh has redistributed wealth via higher taxation and expanded social welfare for the poor. Yet the income gap in all four tigers continues to widen—a trend with implications not lost on Koh, the well-to-do shipbuilder. ''I feel sorry for today's youth, who have so much trouble finding jobs." he says. ''Things were tougher in the past, but there were always opportunities, too." The contrast with today couldn't be starker: the tigers have put the days of abject want behind them. Yet they're in danger of losing the dynamism that so recently permitted society's rare talents to flourish regardless of their station.