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Ethos Issue 3, Oct 2007
Aid for Work: The Singapore and
US Models in Context
Theresa W. Devasahayam
Theresa W. Devasahayam examines Singapore’s
workfare strategy in light of the US model on which it is
based, and finds key points of departure that could inform
policy development in future.
The past year has seen the implementation
of Workfare in Singapore. Battered by globalisation and rapid
economic restructuring over the last decade, lower-income
groups in Singapore have seen their real wages stagnate and
even decline. Recognising that this group requires more help
to remain engaged in work, the Singapore Government embarked
on its Workfare strategy, where aid is provided on the condition
of work.
The idea of having individuals work in exchange
for the aid they receive is not unique to Singapore. In developing
its own responses to the phenomenon of low-wage stagnation,
Singapore’s policy - makers looked to welfare reform
in other parts of the world. The creation of the Workfare
initiative in Singapore was to some extent inspired by the
US Bill of welfare reforms designed to encourage economic
self-sufficiency.
WORKFARE IN THE US AND SINGAPORE:
VIVE LA DIFFÉRENCE?
Enacted in 1996, welfare reform in the US involved far-reaching
amendments to public assistance. Encompassing a broad set
of policy changes, welfare reforms include welfare-to-work
efforts, state waivers to achieve state-driven programmes,
the Earned Income Tax Credit (EITC)1
expansions in Medicaid, as well as expansions in childcare
subsidies and child support requirements.2
Welfare reform in the US is expressed in numerous models,
with each state evolving its own system of welfare provision
based on the general stipulations outlined in the Bill.
It was the system developed by the state
of Wisconsin that served as a model for Singapore because
of its numerous successes. First, a dramatic drop in the number
of recipients on welfare was recorded in Wisconsin. This was
made possible by the new requirement that made aid conditional
on work. Substantial numbers of welfare recipients left the
welfare rolls and took on jobs. Those that remained on welfare
were required to fulfil work obligations designed to mimic
the demands of regular jobs. Many of these jobs were generated
by the state government3
and while they cost the state government more, it was considered
necessary to induct long-term welfare recipients, many of
whom lack working experience, into work. Second, former welfare
recipients, if they had worked, were found to have earned
an average annual income of US$5,0004
more than what they would have received if they had relied
on welfare benefits.5
Third, it was found that a boost in the incomes of former
welfare recipients had a positive effect on self-esteem.
While conditioning aid on work is a shared
feature of both the Singapore and Wisconsin models, the underlying
rationale for Workfare in the two places differs markedly.
Workfare in Singapore was introduced with the primary purpose
of helping low-wage workers increase their incomes. The plan
has a stronger emphasis on increasing the financial capacity
of low-wage workers through employment rather than to divert
individuals away from welfare.
Welfare reform legislation of the US was
aimed primarily at promoting work, which also reduced welfare
dependence. To this end, workfare policies in the US were
aimed at enabling the unemployed to take on wage employment.
Stiff work requirements were imposed on those who remained
in welfare. While in New York and Wisconsin, state governments
took on the task of creating community jobs so that welfare
recipients could fulfil work conditions to qualify for aid,
in most states welfare recipients relied on jobs created by
the private sector.
In contrast, Singapore does not have an
extensive welfare system to begin with. Reducing welfare dependency
is therefore not the main objective of Singapore’s workfare,
although the spectre of rising welfare costs and a weakening
work ethic are seen as unintended consequences that could
materialise if the Government allowed welfare programmes to
expand over time. The dilemma that the Government grappled
with in devising a sustainable workfare programme was how
to provide aid without undermining work incentives.
A second point of departure is that welfare
reform in the US was also aimed at strengthening marriage,
and reducing child illegitimacy and child poverty.6
There was growing evidence pointing to the fact that children
raised by single mothers sustaining themselves on welfare
were more likely to be trapped in a culture of poverty. This
meant that children developed behavioural problems and low
performance levels at school.7
The promotion of marriage was seen as the solution since it
would give the child a stable home. Welfare in the US gave
little incentive for the majority of recipients, consisting
mostly of single mothers, to get married since being a single
mother was one of the eligibility criterion used for determining
welfare status. The aim that welfare reform would promote
marriage however was mostly rhetoric, as in practical terms
welfare reform focused mainly on raising work levels. States
were explicitly mandated to put in place measures to encourage
work; in contrast, there was little pressure put on states
to create initiatives to promote marriage. Hence, it remains
to be seen whether welfare reforms in the US will solidify
marriages and promote more stable families in the long term.
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