Wednesday, July 28, 2010

Public Assistance in Singapore

CPF BuildingImage via Wikipedia
CPF Building, Singapore
There will be a million reasons why the public assistance model in East Asia is not applicable, unworkable, ridiculous, impossible, or politically dead in the water for the United States. I do not care. Their system is worth a look: a successful model, surely imperfect, but worth describing. 

The argument along economic lines will be circular: Singapore has a growing economy, low unemployment--they can afford to have less expenditures in public assistance. Yet the cost of U.S. public assistance and two wars (let's don't leave that out; however you may feel about them, they are expensive) has caused the U.S. to swim in debt. We are a sluggish, water-logged ship on turbulent economic waters. Let's see what Singapore does for Welfare. Maybe they know something we don't.

Most of my info and quotes come from:

David Seth Jones (June, 2002)
Welfare and Public Management in Singapore: A Study of State and Voluntary Sector Partnership. Asian Journal of Public Administration, 24:1, pp. 57-85. HERE. (Download; pdf)

Jones states that East Asia follows a Confucianist model of public assistance rather than a Western model. As such, it privileges "correct behavior" in regard to public assistance rather than what I think we do, which is "redress of wrongs, forgiveness, and mercy, to apathy and despair". The "correct behavior" applies to every individual in society, on public assistance or not. Those who have money have duties; those who accept assistance also have requirements. The level of conformity is high.

The following comes from one long paragraph that I separated for easier reading. All emphases are mine:
"Although the classic model of state welfarism has been eschewed, the Singapore government has sought to ensure that certain basic needs are met. This has been done in three ways.
The first is by subsidization.  Services such as education and health care are provided by the state with the consumer required to pay a proportion, sometimes a quite small proportion, of the cost. In this way the consumer assumes a shared responsibility in financing the services from which he or she benefits.
The second is through state-administered asset acquisition. The cornerstone of this is the Central Provident Fund scheme. Under the scheme, each employee is required to set aside 20% of his or her income every month, with 16% contributed by the employer. This amount of money is lodged in the employee's own personal account in the CPF--essentially a form of compulory savings. The employee can invest ...a certain proportion of the savings, or may use it to purchase a residence or to pay for costly medical treatment. The primary objective of the scheme, though, is to provide finance for retirement.
The third way by which social needs are met is by voluntary involvement. This relates to welfare provision and personal social services for the most needy and vulnerable in the community, which will be discussed below. (pp.61-62)
Jones says (p. 62) "At the heart of the model is the primary role of the volunatary sector and the community--welfare organizations, community associations, charities, religious bodies and even businesses, as well as the family--in the management and delivery of welfare services. The government is considered essentially a regulator and a facilitator, rather than a deliverer."

1. So Singapore does have public health care. They also require a co-pay.
2. Singapore has public education. That also requires a co-pay, and probably other steps such as entrance exams.

3. Singapore has a kind of Social Security, a little more direct than our Social Security. They have an Ordinary Account, a Medisave Account, and in some years a Special Account was also used. The government allocates, say 24% to the Ordinary and 6% to the Medisave. In times of economic downturn, they lower percentages in order to stimulate the economy. (Vandine, p.2).

II. Voluntary Welfare Organizations
Paraphrasing Jones: VWO's include: charitable organizations, community associations, ethnic self-help groups, religious groups (Christian, Taoist, Buddhist, and Muslim).  The volunteer aspect is that a (church) might agree to fill a particular need and become a VWO. Volunteerism comes from their membership, although a lot of people do seem to get paid. It's subcontracting with citizen participation. The government pays about 25% of the Total spending on Public Assistance.

As a group, VWOs do the following:
1. provide care for elderly and disabled
2. individual and family counseling (either in need or under stress)
3. accommodations and 'support in kind' for the destitute
4. assistance to needy families.
5. preschool education
6. supervising children before and/or after school
7. child and adolescent counseling
8. therapy and rehab for drug addicts
9. home health care
10. their version of "Meals on Wheels"
11. operate residential institutions for addicts in rehab, abused children or children 'out of control'; elderly; disabled, and destitute.

In many of these activities, day-care centers for children provide the locus also for child or adolescent counseling; other centers will do elder counseling, socializing, or care during the day.

Jones does not specify what number of these people are paid. I suspect  most of them. But they are hired through a VWO organization, not civil service. The VWO might also seek informal, free consultancy: a food kitchen might benefit from a (ethic association member's) grocery store acumen, or "Meals on Wheels" might get its restaurant layout looked at by a (neighborhood association member) who owns a restaurant. This help would be graciously accepted but is also part of one's civic duty.

III. Funding
Singapore's citizens may donate directly to a VWO or to Singapore's state-run Community Chest, which allocates funds for VWOs. This is also voluntary giving, frequently through regular paycheck donation. The donated C.C. funds are apportioned according to governmental criteria by the National Council of Social Service. This Council is quasi-governmental and works closely with the Ministry of Community Development and Sports. There is also a fund for Corporate Giving. Corporations can choose broad areas of concern, or specific charities, or the general welfare. Then the NCSS takes that into account.
Last of all, the Government of Singapore also chips in, up to 50% of of what it considers an appropriate operating cost for an approved VWO. Many times this is done on a per-capita basis (by number of people served).

IV: The Government of Singapore Generally Pays for: 
1. Start-up grant, for first months of investment.
2. Building/remodelling costs for facilities (including furniture, transportation, all initial costs), up to 90%, based upon a budget submitted by the VWO and approved/checked beforehand. Therefore, the VWO is kicking in 10% or more of the cash, plus the sweat equity.
They also pay 'hidden costs':
3. Rents are high in Singapore. Part of the government funding is to arrange low rent in federal property, and then pay that rent. The lease generally must be renewed every year or some agreed period of time. It is not automatic.
4. Auto licenses are expensive in Singapore. The government pays that.
5. If there are many voluntary donors for a particular Local project, sometimes the government matches funds. In that case, locals get a little more say in what is put into their area. Otherwise it follows the federal formula. In other words, citizens have to put their $$ where their commitment or perceived need is, not wait for a Congressman to pork it up for them.

V. The Ministry of Community Development and Sports is responsible for:
1. Training and advising paid staff of volunteers, occupational therapists, aides, etc.
2. Training in motivation, administrative, and career skills for VWO managers.
3. Consulting for continual training and advisement.
4. Manuals and guidelines to set standard best practice. Every VWO operates from a standing government-determined framework. Frequently there are targets and quotas.
5. Expects quarterly reports from each VWO
6. Expects conformation with guidelines/manuals--everything from how much space to staff/service ratios, hygiene, safety
7. Measures performance and holds VWOs accountable for government guidelines.

Thus Singapore has a public/private partnership that "avoids dependency on direct state welfare". The government supplies funding, regulations, guidelines, and limits duplicate efforts in the same region. The private sector is the partner who delivers the care. It is perhaps paternalistic--it requires conformation to societal norms by all parties--and it requires a significant amount of private donations.

Okay, So--?
What do you think? Consider my first example, a "disadvantaged youth in trouble."  He would go to school, be supervised before and after, his parents would be counseled or he would be housed in a charity arrangement. The difference is perhaps that he might be expected to conform against inner inclinations (to violence, good; but to a certain profession, maybe that's un-American?).  The standard set before him would be the only one to attain. On the other hand, encouragement and attention would be given when he made those steps.

or take my second example, the temporary food stamps. A person in crisis might have gotten a little financial counseling, or, a follow-up to be sure they no longer required assistance. That follow-up may have been an appointment that I would be duty-bound to make.  They also may have been making sure I DID spend those food stamps on staples or canned goods, rather than Kool-Aid or candy bars.

That's what I'm seeing, though I could be wrong in details. I don't think one paper is enough to know how Singapore and East Asia's social contract works--but I do think this gives us plenty to think about.

Another question: are we too corrupt/special-interest driven to implement this system fairly?
Is our land-mass too widespread to implement a standard system?
Another question: despite our opinion of ourselves, the U.S. is not by per capita measure or % of GDP the most charitable nation in the world. Could we get into the culture of giving?

Further References:
Government of Singapore, Central Provident Fund Web site. in English
Vandine, Comparing U.S. Social Security to Singapore's Central Provident Fund
Wikipedia, Central Provident Fund, linked above.
Hat tip to Inspector Gadget at Police Inspector blog. He wrote that Blair was interested in Singapore for UK welfare reform, and then never reformed UK public assistance. That got me started.
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sparkcheck said...

Fascinating comparisons.

Going on a tangent here, I think one form of punishment we ought to borrow from the Singaporeans is caning. I'm sure crime will go way down if assholes knew they were gonna get caned.

Bob G. said...

Oh, we definitely see some "re-tooling" in order, when it comes to public-assistance.

Our problem, which I'm sure is NOT endemic to Singapore, is HOW (in America) do you REVERSE or otherwise disrupt this generational dependency aspect to those seeking such aid from their government?

And HOW do you tell the government that THEY have to get their heads out of their alimentary canal and get their collective "stuff" in gear, and not chronically reward "bad behavior" by fostering this "poor me" mindset?

I think when THOSE two items are addressed, we can look deeper into the system that Singapore has and perhaps mimic it, or at least tweak it to fit the NEEDS of those in America who are considered truly poor.

As a side note, the median income for a family of four that is considered at the poverty level in our country is NOW $21K (and change)

Hell, I used to make that a year in wages!

Our very first step MUST be education of these people (like it or not) them HOW to mmanage finances, HOW to prioritize, HOW to run a household, and most importantly, HOW to be accountable and personally responsible for what they do...or do not do.

If it's good enough for those drawing a salary, it's good enough for those (temporarily) on the dole.

Let's not make being ON that dole a terminal condition,as we have been doing for decades though, right?

Excellent presentation of something very much worth exploring.

Kudos to you!

The Bug said...

The biggest problem (well, probably not BIGGEST - but the one that I'm obsessed about currently) is that despite their so-called Christian beliefs so many Americans really could not care less about their neighbors. They might not mind spending some time & money to help people like themselves, but the "disadvantaged youth" would be SOL. Maybe (I HOPE) I'm too cynical. I like the idea of this system though...

Ann T. said...

Dear Spark Check,
Yes, I also thought fascinating! And caning, wow, that would be a revolution! I would think the humiliation factor would be quite the deterrent. Especially since Gommorrah doesn't seem to be humiliated by prison time any longer.

However, I can here the screaming of the anti-spanking mothers and the po-po haters, the new slavery comments already.

Still, the object and the change is definitely worth a consideration.

Thanks for writing in!
Ann T.

Ann T. said...

Dear Bob,
You're right about the generational dependency. It may be the biggest fight we have.

Singapore became a (poor) state in 1959. In its first years, no one was on public assistance b/c they couldn't afford it. They gradually and very slowly added some social services, and remain wary of huge interventions. Their budget for S.S. like all of them have gone up.

They do not think income equalization is as important as prosperity. I do think income equalization is frequently (but not always) the sign of a bad government. In short, if the deals are only for the guys on top, then income inequality is bad. But if most of society is moving on up, then the inequality is not the same kind of indicator.

But in Singapore, the trend up has helped most people. The Provident Fund was loosened when real estate went astronomical, so that people could buy homes. In short, they do adjust for growing a Middle Class, not growing a Poor Class.

I agree that counseling is going to have to be part of the mix. Most of all, I'm glad this post has something to offer in the way of What To Do!

We surely can't keep on keeping on.

Thanks for a wonderful comment,

Ann T. said...

Dear The Bug,
I agreed with Bob above that multi-generational aid is the biggest problem. In a way, I think this apathy you describe is the flip side of multi-generational non-involved aid.

special interests: we have them. Good public schools in satellite cities have every possible amenity, including laptop computers and organic salad. Inner-city schools might get computers, but nobody knows how to read. They have rodent problems which make the noodle casserole totally unsanitary.

So, yes. In a sense I think all of society is sitting on its butt waiting for somebody to make a move and hoping nobody will look at them to do something.

How to fix this? I am not sure. In a way, the Feds are the only ones that can fix that. Singapore not only provides services, it limits them. So if you want your kid to eat organic salad, then he has to pack a lunch. if the school building has rats, then the exterminator has to fix it. That is the sense I'm getting.

Really great, and very important comment.
Thank you!
Ann T.

El Lobo Loco said...

Dear Ann,

I am amazed and humbled whenever I hear that people in other countries find the Singapore solution to be interesting, and possibly informative.

Recently, there have been some discussion here about whether there is a need for a minimum wage to help the lowest wage earners. I've provided a link on our approach, if you think it might be interesting.

In the article, you can see that the argument against a minimum wage is that it puts the onus on the employer to pay the minimum wage. This may disincentivise the employment of low wage workers. The Workfare solution is a payment by the govt to low wage workers above 35 years old and this takes the burden off employers, lowering their cost of doing business. This payment consists of cash, as well as a top-up to the employees' CPF account which could be used to help them with their housing loans or medical bills.

Of course there are criticism - that Workfare subsidises employers. It sounds a little Republican, but the focus is employment for the low wage worker which is the right target of this policy.

Ann T. said...

Dear Lobo Loco,
There are already programs in the U.S. that subsidize workers getting low wages, but they don't get the same play.

I think one of the things that amazes me is that Singapore does seem to have targets--and sticks to them.

Thanks for a great comment!
Ann T.

Stacy said...

Interesting Information.

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