Monday 11 November 2013

Welfare must not undermine value of hard work

Boost wages of poor to keep them in jobs, and to get the able-bodied to work
By Radha Basu, The Sunday Times, 10 Nov 2013

Just 37, Madam N already has eight children and a grandchild. Her third husband, a factory worker, earns $1,400.

The family receives close to $1,400 in monthly cash handouts and vouchers, the bulk of it from the Government.

Factor in medical and education subsidies, and what they get in state aid is considerably more than the money they make from work.

The handouts, the housewife acknowledged, have increased over the years. The state has also exercised flexibility in allowing the large family to live by themselves in a three-room Interim Rental Housing flat, whereas the temporary housing scheme usually requires two families to share a roof.

I chanced upon the former beautician after following her children home one afternoon last month, while wandering along the corridors of their Boon Lay housing block.

Chatting in their cluttered flat as her teenage daughter played on a Samsung tablet, I realised that this family was living proof of the rapid and relatively recent widening of Singapore's social safety nets.

Aid quantums have increased and eligibility criteria relaxed. More help has been targeted to larger families by introducing per capita income criteria to assess financial need.

Families are being judged "case by case" and sometimes, on appeal, rules are bent in their favour. Help has also become more accessible, with far more agencies and offices dispensing state aid than before.

All this is welcome news for the poor in a country long known for its prudent - some would call it tight-fisted - approach to welfare.

But welfare should never undermine the value and rewards of hard work. As social safety nets widen, there is an urgent need to boost the wages of the working poor and help them stay in the workforce and keep their families together as best as they can.

There are 105,000 families with average household incomes of $1,600 per month, including Central Provident Fund contributions.

But let's talk about the good news first. During recent visits to a dozen rental housing estates while working on a special report on the poor, I came across several families like Madam N's who said they were getting more help from the Government than they did before to combat the soaring costs of living.

In Buangkok, there was the mentally ill couple with a nine-year-old daughter who got $800 in cash handouts and vouchers plus food rations from the Government and two religious charities. In Boon Lay, there was the mother of four who had cash handouts and childcare subsidies. In addition, her children received free tuition five days a week and free bus rides to and from school.

Data bears this out too. Payouts from ComCare, the Government's main fund to help the needy, topped $100 million for the first time in the last financial year, more than double the $44.5 million given out just five years ago. The biggest jump was in short-term assistance.

A total of 33,266 individuals and families were helped overall in FY 2012, up from 19,072 just five years ago. Charities have also been doing more.

Indeed, some of what I saw on the ground recently is a far cry from just three to six years ago, when as a community reporter I routinely encountered and wrote about people who did not receive enough financial help because they were not eligible or unaware of where to get it.

Today, there are still some deep pockets of need. Some of the elderly poor - especially those estranged from their families - could do with more help.

Ironically, it's some of the working poor - who are so busy making ends meet that they just don't have the time to appeal for and follow up on available state help - who might be the most in need of help.

Take Madam L, for instance, a 34-year-old single mother from Whampoa who supports four children on her factory worker's take-home pay of $700 - or $140 per head per month.

That's around half the per capita income of Madam N's family, after their welfare payments. Yet, when Madam L applied for social assistance payments, she got only $200 per month.

Then there is Madam K, a 67-year-old school-canteen helper from Lengkok Bahru, who supports a mentally ill daughter on a monthly income of around $700. She is out working 12 hours a day and does not get paid on school holidays. She says she is too exhausted to seek state aid.

Worryingly, despite the tight labour market, the ranks of low-wage workers are on the rise. Last year, there were 114,000 local workers who earned less than $1,000 a month despite working full-time, up by 4,000 from a year earlier.

In fact, between 2007 and last year, real median gross wages declined in eight of the nine major occupational groups, including cleaners and labourers, service and sales workers and clerical support workers. Only plant and machine operators saw a rise in real wages.

Wages of the working poor need to be pushed up to keep them working, and to draw the able-bodied who are staying home to return to work too.

Transport operator SMRT took a bold step last week by announcing a new wage model that could see its local bus drivers earn up to $1,000 more per month. On their part, the People's Action Party town councils have announced a $200 increase in the starting pay of full-time cleaners.

Even more could be done to incentivise work. The Workfare Income Supplement - under which the Government tops up the wages of those earning less than $1,900 a month - is an excellent idea, but much of it is paid into the CPF account. Even after a big hike in the cash component this year, the maximum cash incentive a worker can get works out to less than $120 per month. The cash component could be increased further, especially for those who earn under $1,000 a month.

Better job matching services are also imperative, especially in the tight labour market. An entrepreneur friend who helps to run several restaurants wrote to me a few weeks ago, saying his company wanted to hire a dozen local cleaners at between $1,800 and $2,000 per month for a five-day week and an eight-hour shift. That's more than double the $850 gross median pay of cleaners.

I forwarded the e-mail to a Community Development Council and a voluntary welfare organisation where the needy go to seek job assistance. Both acknowledged my e-mail. The company also advertised for workers but there have not been enough takers so far.

The businessman is beginning to think that some of Singapore's poor, while quick to welcome handouts, have become choosy about jobs.

There is a need to wean young and physically able Singaporeans - including mothers like Madam N - off dependence on welfare and get them back to work.

Childcare subsidies have risen dramatically in recent years. Mothers from low-income families can pay as little as $5 per child in monthly childcare fees. Giving single mothers or those from needy families priority in childcare placements could help them get back to work quickly.

Wider safety nets are a good thing, and they do ease the plight of the poor who struggle daily to make ends meet.

But the hard part, as more is done to help those most in need, is to ensure that access to aid does not dissuade them from making their way back onto the road to self-reliance.

For the young and able in particular, welfare should never be allowed to undermine the rewards of hard work.

Too poor, too busy working to seek help

Today, there still are some deep pockets of need. Some of the elderly poor - especially those estranged from their families - could do with more help. Ironically, it's some of the working poor - who are so busy making ends meet that they just don't have the time to appeal for and follow up on available state help - who might be the most in need of help.

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