The steering group for the review of the Comprehensive Social Security
Assistance (CSSA) scheme proposed to implement a ‘Support for Self-reliance’
scheme to ‘encourage and assist unemployed CSSA recipients to move towards
self-reliance’ (1). The scheme comprises three components, ‘active employment
assistance’ programme, compulsory participation in ‘community work’
and the provision of disregarded earnings. Failing to comply with stipulated
requirement would result in the termination of CSSA payment. The objective
of this paper is to critically assess the effects of the scheme on the
labour market chances of unemployed CSSA recipients.
Work in Exchange for Welfare?
In some countries particularly in Britain and the United States,
and in policy pronouncements from OECD, among other strategies against
unemployment, a move towards supply-side active labour market measures
that emphasize the activation of the unemployed people has also been observed(2).
Such approaches often function by exerting pressures or sanctions on the
unemployed, by making the unemployment benefit conditional on strict job-search
and eligibility criteria, or alternatively, demanding the unemployed recipients
to participate in work-like activities or training schemes in exchange
for benefit receipt. The effectiveness of such measures in terms of job
placement remains ambiguous(3).
The assumption of this approach rests on the notion that, the ‘unemployment
trap’ problem is best tackled by reducing the ‘attractiveness’ of remaining
on benefit, rather than by improving the working conditions of low-paid
jobs, despite there is little compelling evidence that the level and/or
duration of benefit payments per se is the critical factor affecting the
duration of unemployment, or that the attitudes to work of the unemployed
are being significantly influenced by the benefit system(4).
The Proposed Scheme
The recently proposed ‘Support for Self-reliance’ scheme by the steering
group for the review of CSSA may be regarded as a latest example of the
role of social welfare as the machinery of labour control(5). The scheme,
sanctioned by the termination of CSSA payment if the unemployed recipient
fails to comply with stipulated requirements, is composed of the following
Active Employment Assistance Programme (AEA)
It is proposed that participation in the programme will replace the
current requirement for the unemployed CSSA applicants to register with
the Local Employment Service of the Labour Department (LD). Apart from
explaining services provided by LD, the Employees Retraining Board (ERB)
and other NGOs, the staff of social security field units (SSFUs) will also
be responsible for assisting the unemployed to draw up personalized job-search
action plans followed up by regular interviews to monitor progress and
to render appropriate assistance.
Compulsory Participation in ‘Community Work’
It is Proposed that unemployed recipients are required to perform unpaid
work like cleaning country parks once or twice a week as a condition of
receiving CSSA to ‘break the tedium of unemployment, improve the recipient’s
self-esteem and confidence, and help the recipient develop a work habit
and gain a better understanding of the community, paving the way for eventual
paid employment’ (6).
Disregarded Earnings (DE)
It is proposed to extend to employable able-bodies adults the provision
of totally disregarding the first month’s income from a newly secured
full-time job on the condition that this benefit will be allowed not more
than once during a two-year period.
Assessment of the Scheme
The key question of this paper is ‘how do the proposed measures affect
the labour market chances of the unemployed recipients of CSSA’? In order
to answer this question I would like to raise in the following some points
that emerge from existing reviews on active labour market measures(7).
Lobour groups in Hong Kong have long been demanding for the integration
of cash assistance with social services to help the unemployed CSSA recipients
to deal with problems beyond immediate financial needs but nonetheless
having employment impact, such as housing, training, interpersonal relationship,
family relationship, child-care, personal mental health, discrimination,
exploitation, etc. Clearly such an approach requires a move away from standardization
and bureaucratization towards specific interventions to meet wants and
needs according to the unemployed person-in-situation.
However, the extent that the employability of the unemployed recipients
would be improved after such elements as ‘counselling’, or ‘personalized
plan’ have been introduced into the interviews by the staff of SSFUs is
not clear. First, the interviews will be delivered by untrained staff (who
have already been bombarded with heavy workload and many of whose attitudes
towards welfare claimants have been a subject of complaints by their ‘customers’
(8)). Second, the processes of the interviews would be rationalized according
to a prescribed goal: to seek employment actively. Thirdly, the ‘advice’
of the staff is empowered by the immediate threat of the termination of
payment if it is being rejected. With regard to these the apparent humanistic
tone of individualization fades out and gives way to disciplinary encounters
between two parties where the unemployed recipients have to constantly
demonstrate the signs of active job-search (e.g. employers’ letters) as
qualification for benefit.
Government officials may appeal to the ‘evidence’ of case reduction
(the apparent sign of people’s ‘self-reliance’) elsewhere(9), but people
out of work may simply respond by not taking-up to evade pressure on themselves.
On the other hand, it is highly probable that participants enter a low-paid
job (thus leaving the register temporarily), but fail to get stable sustainable
employment, and move repeatedly between the periphery of labour market
and subsistence level of welfare(10). This may even be more evident given
the continuous casualization and flexibilization of labour contracts(11).
In fact, many CSSA unemployed recipients face a range of objective barriers
and disadvantaged, including age discrimination, low education and skill
levels etc(12). Having lost their job security since prior economic restructuring,
they are now still competing jobs with many others having formal qualifications
in a period of severe economic crisis. Their chances of being employed
would be unlikely to be radically transformed after a few encounters with
the staff of SSFUs or LD(13) to address information deficits or ‘inefficient’
methods of job-search. Nor would their career prospects be significantly
improved simply by being made referrals to the current institutions of
ERB(14), since such programs are often not targeted, not customized to
anticipated labour market skill requirement, or not delivered in conjunction
with practical work experience leading to a formal vocational qualification.
Compulsory Participation in Community Work
It is recognized that selectivist social services may create or reinforce
the stigmas which attach to recipients(15). When considering the feasibility
of the proposal of ‘community work’, caution must be taken not only to
the huge administrative costs involved(16), but also to the production
of marginalization and social exclusion of unemployed recipients, especially
when there is no convincing evidence that compulsion would greatly improve
the performance of measures(17).
‘Voluntary work’ is a good rhetoric in Chinese, but on close examination
it fails to bring about the effects policy-makers intend to have on the
target group. First, beach- and park-cleaning do not involve contact with
people(18), so that the notion of the ‘gaining a better understanding
of the community’ is refuted. Second, the ‘community work’ suggested,
according to the report, would be at best non-market activities far away
from the working environment of the real economy, but at worst ‘make-work’
activities the primary function of which is to maintain ‘work-habit’.
Hence the potential in generating real, occupationally relevant experience
is minimized, and it is then very likely that participants become stigmatized
in the eyes of the public as ‘undeserving poor’. Third, the scale of
the scheme (involving over 26,000 participants) and the fact that participation
in such ‘work’ is compulsory may further add to the negative stigma in
the eyes of employed recipients.
The report does acknowledge that recipients may be less ‘enthusiastic’
towards the scheme(19), but any reluctance on the part of the unemployed
is more likely to reflect their limited choices between labeling and the
loss of benefits than inherent characteristics of the group concerned.
This discussion does not rule out the possibility that the experience
of unemployment itself could cause further unemployment partly due to deterioration
in skills and prolonged distancing from the world of mainstream work. However,
a more positive and far less dangerous policy response is to provide programmes
which involve job creation, or training/placements opportunities in regular
workplaces, through incentives to employers or more directly through subsidizing
schemes embedded in local communities which provide useful products and
services to a reasonable wage.
When a CSSA recipient gets a job, additional spending on traffic, meals,
tools and clothing may be required. Moreover, the job acquired may not
be stable in an initial period of several months due to the shrinkage of
local labour market. The purpose of DE should be to create a real incentive
for the recipients to re-enter workforce and to overcome this transitional
period of adjustment.
At present, a CSSA recipients’ income from employment can be disregarded
up to a maximum of $1,805 a month. Those who are not required to register
with LD as a condition of receiving assistance (e.g. single parents) are
entitled to have their first month’s income from a newly secured full-time
job totally disregarded. The current method of calculating DE is shown
% Disregarded Amount
(25% of $1,805)
Next $2,708 (180% of $1,805)
Typical problems among CSSA recipients with the above method include
the complexity of calculation, exemption period being too short, the initial
and maximum level of DE being too low, etc. These problems are related
to the amount of DE as well as the rate of deductions. Thus although it
is now proposed to extend to unemployed recipients the provision of totally
disregarding the first month’s income from a newly secured full-tome job,
the incentive to seek job may not be significantly affected, given the
current method of calculating DE persists, not to mention that by definition
the subsidy is usually beneficial only to those close to obtaining a job
in a society where the availability of jobs is declining.
The proposed ‘Support for Self-reliance Scheme’ rests on the contestable
notions that unemployed recipients do not wish to work (all the available
evidences suggest the contrary(20)), and that the level of fraud and abuse
of social security benefit is alarming (a classical case of moral panic(21)).
On close examination there seems to be little justifications for the ‘power’
the scheme claims to have. The equivalence of ‘self-reliance’ with ‘entry
into labour market’ is basically flawed, because it overlooks the relative
availability of jobs with sufficient incomes for the groups of people most
susceptible to financial dependency(22). After all, the measures advocated
may reduce the number of CSSA cases in the short run through its deterring
effects(23), at the expense of producing detrimental impacts on the unemployed
recipients, which impartial and responsible policy makers must take into
consideration very seriously.
1. Report on Review of the Comprehensive Social Security Scheme 1998,
2. See King, D. (1995) Actively Seeking Work? The Politics of Unemployment
and Welfare Policy in the United States & Great Britain, Chicago &
London: The University of Chicago Press; and The OECD (1994) Jobs Study.
3. Meager, N. with Evans, C. (1997) The Evaluation of Active Labour
Market Measures for the Long-Term Unemployed, Geneva: International Labour
4. See Gallie, D. and Volger, C. (1994) “Unemployment and Attitudes
to Work” in Gallie, D, Marsh, C and Vogler, C (eds.) Social Change and
the Experience of Unemployment, Oxford University Press; Benoit-Guilbot,
O (1994) “Introduction: Why Are There So Many Long-Term Unemployed in
the EU?” in Benoit-Guilbot, O and Gallie, D. (eds.) Long –Term U nemployment,
Pinter Publishers; and Atkinson A. and Micklewright J. (1991), “Unemployment
Compensation and Labour Market Transitions: A Critical Review”, journal
of Economic Literature, Vol. 29, No.4, pp.1679-1727.
5. Titmuss, R. (1975) Social Policy: An Introduction. George Allen
6. Report on Review of the Comprehensive Social Security Scheme 1998,
7. Meager, N. with Evans, C. (1997) The Evaluation of Active Labour
Marker Measures for the Long-Term Unemployed, Geneva: International Labour
9. See Annex 9 of Report on Review of the Comprehensive Social Security
10. Wong, H. and Choi, H. W. (1998) Exploration Study on Termination
and Re-activation of CSSA cases, HKCSS & Oxfam.
11. See Poverty Watch, Vol. 3, March 1998.
12. See Annex 10 of Report on Review of the Comprehensive Social Security
13. The placement rate recorded by LD in a 3-month qualitative study
of a random sample of about 300 CSSA cases conducted by SWD, LD and ERB
is as low as 6%. See Note 12.
14. Another study found that only 10% of 135 former CSSA recipients
got their jobs through the assistance of LD or ERB. See Wong, H. and Choi,
H.W. (1998) Exploration Study on Termination and Re-activation of CSSA
cases, HKCSS & Oxfam. See also the article by Chan, Y. H. on Singtao
Daily, Jan 10 1997
15. Spicker, P. (1984) Stigma & Social Welfare, London & Canberra:
16. The administrative costs could be as high as thirty millions HK
dollars per month, with regard to the current number of unemployed CSSA
cases. See Ming Pao Daily News Dec 9 1998.
17. Meager, N. with Evans, C. (1997) The Evaluation of Active Labour
Market Measures for the Long-Term Unemployed, Geneva: International Labour
18. See Hong Kong Economic Times, Dec 11 1998
19. Report on Review of the Comprehensive Social Security Scheme 1998,
20. In the study conducted by SWD, LD and ERB, 70% of participants
claimed to have made some efforts to find a job before turning to CSSA,
and since receipt of CSSA, still 73% claimed to have made their own efforts
to find a job apart from registering with LD. See Note 12. See also Wong,
H. and Choi, H. W. (1998) Exploration Study on Termination and Re-activation
of CSSA cases, HKCSS & Oxfam; and Gallie, D. and Volger, C, (1994)
“Unemployment and Attitudes to Work” in Gallie, D, Marsh, C and Vogler,
C (eds.) Social Change and the Experience of Unemployment, Oxford: Oxford
21. The Report on Review of comprehensive Social Security Assistance
Scheme 1996 states: “The basic checking mechanism against fraud and abuse
of social security services is considered generally sound and adequate”
(p.96). The CSSA Fraud Cases for the years 1997/98 is 0.02%, which is higher
than 0.01% in 96/97, but still lower than 0.03% in 93/94 and 94/95. See
Annex 8 of Report on Review of the Comprehensive Social Security Scheme
22. The number of ‘working poor’ (wages less than a half of median
income) Has increased by 42%, 3 times more than the growth rate of working
population during 1991-97. See Poverty Watch, Vol.2, Dec 1997.
23. See Hong Kong Economic Times, Dec 14 1998.