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WELFARE REFORM IN ALBERTA: REFLECTIONS ON TRENDS IN HONG KONG - Challenges and Opportunities (by T S CHOW) The Problem A couple of years ago, the US Federal Government came face-to-face with threat of bankruptcy because of the disproportionate growth in welfare payments. Hong Kong is inadvertantly going down the same path. 2. What is worrying is not the improvements in welfare payments for the elderly or for people who cannot help themselves, but with the seven-fold increase in the past five years in the number of able-bodied unemployed cases. “Almost one in five, or twenty per cent of the total number of unemployed people in Hong Kong, are living on Comprehensive Social Security Assistance (CSSA) payments”. If the underlying problems are not addressed quickly, the upward trend will continue unabated. CSSA will suck in more and more unemployed people. Before long, it will begin to lure people away from low paid jobs to live on high paid welfare. 3. In the Yosemite National Park in California, there are small signboards reminding well intentioned tourists: “Don’t feed the squirrels. Don’t turn them into beggars.” Misdirected welfare payments destroy the traditional values of hard work and self reliance, the cornerstone of Hong Kong’s success. It gives rise to a dependency syndrome and discourages people from assuming the full responsibilities of adulthood. Market Forces 4. It is not difficult to find a job in today’s job market. But it is difficult to find a good one if you do not have the proper education or craft skills. To eke out a living is tough for everyone, but more so for people at the lower end of the employment market. Many people are still working 11 to 12 hours a day, earning only $4,500 to $5,000 a month. 5. To live on welfare is a different story. Welfare recipients can spend 11 or 12 hours a day on their hobbies, or in parks and beaches or simply doing nothing. Most restaurant workers have only three rest days in a month. Welfare recipients have thirty rest days in a month. In an economic down turn, workers have to worry about their jobs and whether they will get paid at the end of the month. Welfare recipients enjoy a much better sense of financial security. Workers have to be productive in their output to get a bonus. Welfare recipients can double or triple their welfare payment by being productive “in a different direction”. - 2 - 6. The invisible hands of market forces thus determine the behaviour of unemployed people. As it is more cost effective to live on welfare than to earn one’s own living, more and more unemployed people will be attracted to the welfare option. Once they get there, they will not leave. The Way Forward 7. The growing consensus among informed circles is to differentiate between people who can help themselves from people who can not. They have to be treated differently. 8. What has not been agreed upon is whether incentives to work will be better served by the removal or the preservation of welfare payments for the unemployed; whether deprivation in meeting a person or a family’s basic needs is a primary force driving people to work and therefore a healthy element in our social fabric. 9. Visible and invisible barriers exist which prevent genuine job seekers from getting a job. Thus the provision of suitable and adequate pre-school and after school child care service is more important for single parents, and the provision of retraining on job search skills and job skills are more important than the provision of welfare payments for the unemployed. 10. Drug addicts and people who are psychologically or socially maladjusted present real problems in job search. Few employers are willing to hire them. They are therefore not yet employable until they have been rehabilitated. 11. When barriers to job entry are removed, what is left to be considered is the incentive to work. For people who show no interest in working without a reason, should we leave them on their own until they have made up their mind, or should we rush to their rescue? Should we pay for people who choose to remain idle, or should we only pay for them to equip themselves with more skills by taking active steps in the job search process? Opportunities 12. Human beings are society’s most valuable resource. When more and more productive people live on welfare, we are losing at both ends paying more in welfare but getting fewer people to work - aggravating the perennial problem of labour shortage. 13. If we can reverse the trend, we would be stopping the haemorrhage, saving over a billion dollars every year in welfare payments and bringing back ten thousand productive workers to the workplace. But this is no easy task. We have to make up our own minds. We have to act in concert, act quickly and act decisively. Table 3J 表 3J Employed persons by Monthly employment earnings 按每月就業收入劃分的就業人數 Monthly employment earnings (HK$) 每月就業收入(港元) < 3,000 1996 Q2 第二季 No. % 人數 百分比 (’000) 1997(1) Q1 第一季 No. % 人數 百分比 (’000) 1997 Q2 第二季 No. % 人數 百分比 (’000) 73.6 2.5 61.8 2.0 59.6 1.9 3,000 - 3,999 169.4 5.6 155.2 5.0 154.2 5.0 4,000 - 4,999 111.6 3.7 95.0 3.1 91.9 3.0 5,000 - 5,999 168.1 5.6 146.7 4.7 135.1 4.3 6,000 - 6,999 241.0 8.0 210.8 6.8 204.0 6.6 7,000 - 7,999 262.8 8.8 239.8 7.8 246.2 7.9 8,000 - 8,999 364.2 12.1 332.7 10.8 333.5 10.7 9,000 - 9,999 210.6 7.0 237.9 7.7 256.9 8.3 10,000 - 14,999 671.9 22.4 751.6 24.3 771.6 24.8 15,000 - 19,999 287.3 9.6 332.8 10.8 327.9 10.5 20,000 - 29,999 238.7 8.0 284.7 9.2 275.8 8.9 > 30,000 200.5 6.7 241.0 7.8 256.2 8.2 2,999.6 100.0 3,090.2 100.0 3,112.8 100.0 Total 總計 Median (HK$) 中位數(港元) 9,000 10,000 Note : (1) Earnings exclude Chinese New Year bonus/double pay. 註釋: (1) / 雙糧。 10,000 Industry Textile an Garment 6.1% Manufacturing 8.6% Import and Export 13.3% Wholesale and Retail 14.6% Hotels and Catering 7.5% Transport, Storage and Communication 8.0% Finance, Insurance, Real Estate and Business Service 10.5% Community, Social and Personal Service 26.1% Others 5.3% Job Mode Full Time 60.4% Part Time 35.4% Temporary 4.2% Salary (Full Time Monthly) Below 5,000 13.8% 5,000 - 5,999 23.3% 6,000 - 6,999 24.8% 7,000 - 7,999 13.9% 8,000 - 8,999 12.6% 9,000 - 9,999 5.3% Above 10,000 6.3% Average Salary Full Time (Monthly) $6,624.60 Part Time (Monthly) $2,991.70 Daily $234.00 Hourly $61.10