(This essay was published in South China Morning Post on 20 January 2016.)

Charles Murray’s book, Coming Apart: The State of White America, 1960-2010, shows how class divisions there have vastly widened. College graduates in high skilled occupations are not just doing well economically; they stay married and continue to be industrious, honest, and religious. The working class, in contrast, has fallen apart. Never mind their stagnant wages; they have almost completely lost touch with how to live successful, meaningful lives. The consequence for intergenerational poverty is ominous to say the least.


What is powerful about Murray’s thesis is the unusually high degree of family breakdowns associated with the origin and intergenerational transmission of poverty among unskilled low-income families. Their children suffer and end up in poverty themselves.


This finding has important parallels in Hong Kong. In the past 30 years, the socio-economic divide between low-income and high-income households has grown progressively wider, exacerbated by rising property prices. This is fueling polarization and political discontent, and it is being driven by the rising incidence of family breakdown, which is affecting low-income households the most.


Contributing to this process has been China’s opening and Hong Kong’s public rental housing policies. The former has resulted in an increase in cross-border marriages (including remarriages) that have accelerated family breakdowns among low-income local households.


The latter has led to the concentration of low-income families, including both broken local families and intact recent immigrant families, in public rental housing units, many of which are located in the more remote areas of Hong Kong. In contrast are the high-priced private housing areas located closer to the heart of the city.


The scale of cross-border marriages (including remarriages) is staggering. From 1986-2014 there were a cumulative total of 680,017 cross-border marriages, constituting 40.3% of all marriages. The cumulative total for cross-border remarriages from 1986-2012 was 107,796, constituting 43.0% of all remarriages.


In earlier years, most cross-border marriages involved a Hong Kong groom, mostly elderly, single, and relatively poor, finding a bride from the Mainland. Over time an increasing proportion involved younger, divorced, and low-income Hong Kong men marrying a Mainland bride. This has had two serious consequences.


First, a growing proportion of low-income households consists of divorced single parents, mostly Hong Kong women, many of whom live in public rental housing units.

Second, many divorced low-income men soon remarry a bride from the Mainland and are eligible and admitted into the public rental housing program.


The public rental housing estates, especially the newer ones in the remote areas, now have a concentration of divorced parents with children and remarried households with recent immigrant members.


The percentage of divorced households in the lowest income quartile living in public rental housing increased from 1.6% in 1976 to 31.1% in 2011, while the percentage of those in the highest income quartile living in other housing types increased only from 1.8% in 1976 to 6.3% in 2011.


Similar sharp differences are seen for households of single parents and recent immigrants, who are also both concentrated among the lowest income earners and in public housing.


The public housing program has achieved commendable success in accommodating recent immigrants. Unfortunately, the allocation rules favor married households without distinguishing between first and subsequent marriages. This has inadvertently created perverse incentives for low-income households to initiate divorce and remarry across the border, where marital opportunities are relatively abundant.


The combined effects of our public housing program, cross-border marriage opportunities and family breakdowns therefore are worsening economic inequality, creating bad neighborhoods in public housing estates, and lowering upward mobility prospects for the poor.


A growing number of our children raised in public rental housing neighborhoods have poor role models. Almost one-third of public rental households heads are aged over 65. Many children in broken families grow up with their mothers (some on welfare) and seldom see their fathers, who may have remarried a cross-border bride. Siblings in broken families are sometimes separated so that both parents can be eligible to apply for public rental housing.


The experience of growing up in poor broken families is heavily tied up with government public housing policy rules and cross-border marriages that leave a permanent scar on children. Most of the memories are bitter and painful. For these children, Hong Kong’s prosperity and China’s emergence is not a source of pride, but of alienation.

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