Poverty and Social Security
APSS451 Social Policy Week 4
7 Feb 2023
Learning objectives
2
At the end of this lesson, you are expected to be able to

understand the meaning of poverty
identify vulnerable groups in Hong Kong and their
challenges


explore policies to alleviate poverty in Hong Kong
What is poverty?
3

Absolute poverty (subsistence)
o Lack of money to meet basic needs
o Not subject to economic growth

Relative poverty (Townsend, 1979)
o Below 50% of the national median household income
• Wages, pension payouts, investments, money transfers from
family members living elsewhere, welfare benefits
o Subject to national economic performance
What is poverty?
4

Income inequality
o Differences between the tops and bottoms
o Income ↑ ≠ economic inequality ↓
What is poverty?
5

Material deprivation
o Income-based indicators unable to capture multidimensional
nature of poverty (e.g. asset-rich, cash-poor older persons; data
inaccuracy)
o Measuring one’s standard of living directly
• Accommodation, food, clothing, medical care, social
connections, energy (air conditioning, hot shower)
(Cheung & Chou, 2019)
What is poverty?
6

Social exclusion
o Lack of opportunities; being excluded from some social
activities and social participation
The [World Development]
o Key dimensions
• Economic capability
• Cultural acceptance
• Political engagement
• Social interaction
report
[2000/01] accepts the now
established view of poverty as
encompassing not only low income
and consumption but also low
achievement in education, health,
nutrition, and other areas of
human development. And based on
what people say poverty means to
them, it expands this definition
to include powerlessness and
voicelessness, and vulnerability
and fear.
Sen’s capability theory of poverty
(1980)
7

Commodities
o Resources (income, health care, education, housing)

Capabilities
o Necessary conditions human beings need to
enable to function fully
o Freedom; empowerment

Functioning
o Achievement
Poverty and wellbeing
8

Income inequality  lower child wellbeing

Intergenerational poverty
o A strong association between
grandparental education/
earnings and grandchildren’s
education/earnings
 “grandparents effect in
social mobility”
Pickett & Wilkinson (2007)
Poverty and wellbeing
9

Poverty as a key determinant of poor health

Poor health restricts economic activities (job loss)
 financial difficulties
The worse-off more likely to have poorer mental and
physical health, compared to the better-off

Lower social status associated with higher chance of
suffering from diabetes and with less healthy behaviors


Income disparity  health disparity
Relative poverty in HK
10

Poverty rate 23.6% in 2020
Social group
Poverty rate
(%) in 2020
CSSA recipients
96.1
Elderly
70.4
Single-parent
49.2
New-arrival
37.9
With-children
24.8
Youth
9.7
(pre-intervention)
Housing characteristics
Public rental housing
Private rental housing
Owner-occupiers
Poverty rate
(%) in 2020
35.7
16.0
18.9
-with mortgage or
loans
8.7
-without mortgage
loans
24.2
Social patterns of poverty in HK
11

Underemployment: Working poor
o Globalization and casualization of workforce among lowincome class; flexible labour
o Lack of labour legislation and protection: over-exploitation of
manual workers & part-time worker
o Under-valuation of manual work
o Individual problem or structural
problem?
Social patterns of poverty in HK
12
Casualization of workforce
1997-2014
Source: Li (2016)
Social patterns of poverty in HK
13

Increasing income inequality
Gini Coefficient (original monthly household income)
HK$
400,000
%
0.539
350,000
300,000
339,454
0.43
0.6
0.5
0.4
250,000
200,000
0.3
150,000
0.2
100,000
50,000
Per capita GDP
Gini Coefficient
0.1
6,596
-
0
1971
1976
1981
1986
1991
1996
2001
2006
2011
2016
Social patterns of poverty in HK
14

Feminization of poverty
Number of poor
population by sex
(Women’s commission, 2019)
Social patterns of poverty in HK
15

Child poverty
o 21% of HK children aged 3 to 6 living in poverty
o Intergenerational poverty
o Covid-19 outbreak: Inequality in learning outcomes
Social patterns of poverty in HK
16

Poverty among older persons
o 41% of household with elderly head aged 65 or above in
poverty (28% in 1991)
o Median monthly household income of families with older
persons: HK$15,500 (average HK$25,000)
• Current cash income just enough to cover daily expenses
o Social participation restricted by limited financial resources
Ideological perspectives on poverty
17

New Right; Neo-liberalism; Third way
o Personal responsibility; the undeserving poor; underclass
o Cutting welfare; force to work; minimal welfare

Fabianism; Marxism; structuralism
o Poverty as a result of capitalist exploitation
o Universal welfare; changes in political & social structure

Post-structuralism; post-modernism
o Social discourse; social construction of poverty
o Deconstructing the myth of poverty & reconstructing alternatives
Policy directions for poverty reduction
18

Economic growth
o ‘Horses-and-sparrows’ theory
• Incentives for capitalist firms, not the poor
• Emphasis on employment
• The myth of ‘trickle down’ economy in the 1960s & 70s
o Increased income inequality

Redistribution of social benefits
o Income redistribution
o Social safety net vs. equal distribution

Inclusive social and economic development
Workfare as welfare
19

Direct employment or help to get into workforce

Nurturing human capital through job training & education

Objectives
o Poverty reduction among able-bodied adults
o Social mobility & social advancement
o Self-efficacy & empowerment  Self-reliance
Origin of workfare
20

Poor Relief Act (1576) in UK
o “If a person is able and willing, they need to work in order to receive
support.”

Old Poor Law (1601)
o Idle poor in the “house of correction (i.e. workhouse)”

Poor Law Amendment Act (New Poor Law) (1834)
o Tightened eligibility for relief → reduced costs
o No outdoor relief: A punitive approach
o “Workhouse is worse than working outside.” (stigmatization)
Origin of workfare
21

Workhouse
From welfare state to workfare
22
1930s-1970s
Policy direction for poverty reduction in HK
23

Residual welfare regime
o Means-tested social assistance

Priority on workfare
o Support for Self-reliance Scheme (SFS)
o Working Family Allowance Scheme
o Employment Support Supplement

Time-limited job creation under the Job Creation Scheme

Reinforcing job (re)training programs
Categorization of poor households in HK
24
HKSAR (2021)
Policy measures for poverty reduction in HK
25

First poverty line set in 2012
o 50% of the median monthly household income
• Single $4,400; 4-person $20,800 in 2021
o To assess policy effectiveness for poverty alleviation
• Pre-intervention vs post-intervention
o Intervention: recurrent cash, non-recurrent cash, means-tested
in-kind benefits (non-means-tested in-kind benefits excluded)
Social assistance programs in HK
26

Recurrent cash measures
oCSSA, OALA, Working Family Allowance, Disability Allowance,
Student Grant, non-means-tested Public Transport Fare Subsidy
Scheme, Work Incentive Transport subsidy

Non-recurrent cash measures
oSalaries tax rebates, Caring and Sharing Scheme, one-off cash
measures

Means-tested in-kind benefit
oPRH, Kindergarten & Child Care Centre Fee Remission Scheme
Comprehensive Social Security Assistance
27

Public Assistance Scheme (1971)  renamed as CSSA (1993)
 review (1998)

Budget standards method
o Minimum subsistence + basic minimums for social lives
CSSA cases and average monthly payments
CSSA
Number of cases
Average monthly payment
(two persons) (HK$)
2001
2006
2013
2020
247,192
294,204
259,422
222,086
6,319
5,786
7,645
9,957
Support for Self-reliance Scheme
28

Introduced in 1999; intensified in 2003

To assist able-bodied CSSA recipients’ employability
o The unemployed aged 15 to 64; single parents and child carers
with their youngest child aged 12 to 14
o To reduce work disincentives and CSSA fraud/abuse
o Integrated Employment Assistance Program for Self-reliance (IEAPS)
operated by NGOs since 2013
o Disregarded Earnings

A typical example of ‘workfare’ policy in HK
CSSA unemployment cases
29
Most of laid-off persons do not apply for CSSA.
Sources: GovHK (2021b) and Census and Statistics Department.
Policy measures for poverty reduction in HK
30
Time-limited relaxation of CSSA asset limits for able-bodied
persons


Temporary Unemployment Support Programme (2022)
o One-off lump sum of HK$10,000 for those temporarily lost
their jobs amid the pandemic

Employment Protection Scheme (2022)
o Three-month wage subsidies for eligible employers
Casualization of social welfare (Ad hoc flexible welfare strategy)
Policy measures for poverty reduction in HK
31
Neither contributory unemployment insurance, nor meanstested unemployment assistance available

“From last year, we saw many people losing their employment… the government should set
up a short-term unemployment or low-income assistance scheme to help people when they
lose their jobs or income… We’ve talking about it for two years and nothing has happened.”
Sze Lai-shan (Commission for Poverty) HKFP 11 November 2021
“…CSSA Scheme has all along served its function as a safety net effectively. …the CSSA
Scheme as well as the aforesaid short-term measures with wide coverage have assisted
unemployed persons … during the epidemic and economic downturn. Therefore, the
temporary unemployment assistance, if provided, will overlap with these existing measures.
Secretary for Labour and Welfare, 2021
Statutory minimum wage
32

Lowest remuneration legally entitled for labor

Advantages
o Strengthened purchasing power; reduced working hours  improved
quality of life; effective redistribution tool

Disadvantages
o Price mechanism of labor market likely distorted; financial burden on
employers  decreased employment opportunities; minimal effect on
poverty alleviation

$28/hr (2011) → $37.5/hr (2019) → $40/hr (2023)
Recurrent expenditure on welfare
33
HK Poverty Situation (2021)
Policy effectiveness in poverty alleviation
34
HK Poverty Situation (2021)
Universal basic income
35

Non-means-tested recurrent cash benefits for ALL, regardless
of other income sources, financed by government expenditure

Increasing job insecurity in the highly automated society;
growing inequality & rising unemployment

Discussions and experiments in advanced economies
(e.g., US, Canada)