An Appraisal of the Proposed

‘Support for Self-reliance' Scheme

Franklen Choi Kin Shing


綜援檢討報告「自力更生支援計劃」評估

蔡建誠
(本報告全文刊載於香港政策透視主編﹝1999﹞,《綜援檢討的再檢討──跨專業的評估報告》,香港政策透視出版)

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本文從勞動力市場政策角度評估綜援檢討報告「自力更生支援計劃」的效能。「自力更生支援計劃」包括積極就業援助服務、社區工作及豁免計算入息三部份,並向不遵從規定的失業受助人停發綜援金。積極就業援助服務主要是增加社會保障辨事處於職位空缺資料提供、服務轉介等方面的角色,及為失業受助人訂立個人的求職計劃。不過,現行勞工處及再培訓機構對協助綜援失業受助人獲取工作幫助不大,估計失業受助人就算離開綜援,由於年齡歧視、學歷及技能的限制,只能找到工資及保障偏低的工作。強制失業受助人參與社區工作涉及龐大的行政費用,而有關的勞動經驗不但未必獲得僱主認同,更可能會因標籤效應損害失業受助人的就業前景。雖然建議失業受助人覓得全職工作後獲全數豁免計算首月入息,但由於現行豁免入息計算方法扣減速度過急和過份複雜,恐怕難助失業受助人申請工作和維持工作動力。
 

Introduction
 

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 components:
 

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).

AEA

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.

DE

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 below:

    Earnings            % Disregarded          Amount disregarded
First      $451        (25% of $1,805)           100%   $451
Next    $2,708     (180% of $1,805)          50%     $1,354
Total:   $3,159                                               $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.
 

Conclusion

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.
 

Notes:

1. Report on Review of the Comprehensive Social Security Scheme 1998, paragraph 34.
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 Office.
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 & Unwin.
6. Report on Review of the Comprehensive Social Security Scheme 1998, paragraph 38.
7. Meager, N. with Evans, C. (1997) The Evaluation of Active Labour Marker Measures for the Long-Term Unemployed, Geneva: International Labour Office.
8. 香港理工大學應用社會科學學系社會工作文憑課程(兼讀制)三年級同學編(1995),綜合社會保障援助計劃的特別津貼之用者調查報告書。
9. See Annex 9 of Report on Review of the Comprehensive Social Security Scheme 1998,
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 Scheme 1998
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: Croom Helm.
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 Office.
18. See Hong Kong Economic Times, Dec 11 1998
19. Report on Review of the Comprehensive Social Security Scheme 1998, Paragraph 38
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 University Press.
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 1998
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.
 


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