CHUK YUET-SHAN- China Daily Hong Kong Edition (HK Views, P10, 13/01/2011)

A recent media report noted that Hong Kong youths’ average salary has fallen while their level of education rose. According to the Census and Statistics Department of the SAR government, the median salary of the 15-19 age group was HK$6,000 in 1996 and 2001, but it dropped to HK$5,000 in 2006 and 2009; meanwhile the median salary of the 20-24 age group fell to HK$7,500 in 2009 from HK$8,000 in 1996 and 2001. By contrast, the median salaries of the 25-29 and over-30 age groups stayed at HK$10,000 and HK$11,000, respectively. In addition, the rate of youths in the 25-29 age group who had obtained their first degrees reached 20 percent.

This writer has no blind faith in the claim that education can help make one rich, especially in the age of “quantitative easing of education policy” here in Hong Kong, as the diplomas of college graduates have been losing their value over the years, if statistics are to be trusted. The number of institutions of higher learning in the city grew from only two in 1990 to eight in 1999 and nine in 2006. Adding seven universities in a matter of 20 years represents an increase of 350 percent. This writer will go out on a limb by assuming that the number of college graduates also grew by that much in two decades, but could Hong Kong’s economy absorb all those graduates in that period?

When the number of college graduates increases while market demand for them doesn’t, one can expect to see many of those graduates begin doing lower-paid jobs, which inevitably leads to a drop in their median wage. Without accurate statistics, this writer can only surmise that only 0.1 percent of youths enrolled in colleges after high school in the past, but that rate has probably risen to 10 percent by now. Assuming the education quality of 0.1 percent is higher than that of the 10 percent, it should be fair to conclude that increases in the number of university degree openings and of enrollments inevitably results in lower academic achievement of graduates on average. That means the monetary theory of quantitative easing invariably leading to currency devaluation also applies to the job market.

Because of the quantitative easing policy, the 0.1 percent gets buried in the 10 percent and has to choose from lower-paid jobs upon graduation, while the 9.9 percent end up doing no better than their predecessors after spending three years and over HK$100,000 for college education. As for the remaining 90 percent of university students, their prospects are even worse, as they have to earn recognition of a sort from some obscure program after failing to obtain a real degree, only to find their efforts totally wasted in the job market, because their credentials are worthless compared to real degrees. At the end of the day, all college grads find themselves caught in the quantitative easing policy trap and forced to play this cruel game one way or another.

On the same day the media report mentioned at the beginning of this article came out, the University of Hong Kong published a survey, which found that 90 percent of young residents here believe continuing education on the job offers them a better chance of being promoted. This writer believes this is not proof that they are naive, but rather they understand it is the only way to survive in this age of quantitative easing, even if it means having to waste more time and money in self-improvement. How long will it take the SAR government to wake up after seeing those hard-working university graduates struggle to make something out of their wasted youth?

The article is a translation of a Chinese article published in Wen Wei Po on Wednesday. The author is a member of the Lion Rock Institute.

The monetary theory of quantitative easing invariably leading to currency devaluation also applies to the job market.