The positive function and negative function of the social policy in Hong Kong society Essay Example for Free

The positive function and negative function of the companion fit policy in Hong Kong society raiseIntroductionRecently, starting from May 1, 2013, Hong Kong had issued an increment of the Statutory Minimum occupy (SMW) from $28 to $30. Setting SMW at an appropriate level is vital to striking the balance between the objectives of forestalling excessively low advantage and minimising the loss of low-paid jobs, while sustaining Hong Kongs economic growth and competitiveness (2012 overcompensate of the tokenish absorb commission, 2012). To save this aim, the political science befool decided to subjoin the negligible wage rate in order for the bulk receiving the low-paid jobs to collapse a much fair salary. This paper ordain first discuss about the s crawfish outholders that get out be moved(p) by the extend of the wage rates namely the workers earning the SMW rates, the employees earning above the nominal wage, the firms, the organisation and the society as a hale. All of the effects of this neighborly policy, two positive and negative that allow be implied to these stakeholders will be discussed. Then, the effects of this cordial policy will be comp ard with R. Titmuss teachings in the objectives of a social policy. Finally, an evaluative comment of what the government should have done to maximise the benefits of this policy and minimising its drawbacks will be given as a conclusion.Effects on StakeholdersWorkersThe first stakeholder that will be close to impact by this social policy is the workers brisk by the SMW rate. These workers ar usually blue-collared workers whose jobs require tokenish requirements and manual labor. The minimum wage is practiced to provide a wage floor for them non to be victimized by the firms, but these workers are usually still the lowest paid amongst the society. They are referred to as the on the job(p) measly in which the workers are still nourishment below the poverty line of Hong Kong e ven when they already have a job. As shown by Lam (2013) At the article which has been released by the Commission of Poverty, Hong Kong had fitting implemented the poverty line in which a one-person household is living at below HK$3,600, two-personhouseholds living below HK$7,700, and four-person households living below HK$14,300 monthly. In Hong Kong, around 19.6 percent of the population were living with little than the poverty line at the twelvemonth 2012.By the add-on of the minimum wage by virtually 7%, the government deficiencyed to trucking rig the problem of the working poor especially with the rising cost due to pretentiousness and rapid growing in the price of land. concord to the Trading Economics (2013), from the course of study 1981-2013, Hong Kongs inflation rate have averaged at 4.6 percent while the Global Property need (2013) showed that the price of properties in Hong Kong had skyrocketed by 73% over the past 3 years. These rising costs had brought proble ms to the workers living in the SMW as they usually do not experience an increment in their salaries if the government does not intervene. Their living standards will constantly fall every year and in order to prevent that from happening, the Hong Kong government implemented the increase in the SMW at May 1, 2013.The first period Hong Kong had provided the Statutory Minimum enlist of $28 is at 2011. According to Oxfams report on April 17, 2012, 59.5 per cent reported no overture with the introduction of the Ordinance. Oxfam (2012) explained that even when 70 per cent of the low income workers experienced increased wage rates, the employers lessen the remuneration packages, paid rest days, and working hours. Overall, it entices to similar income when the Ordinance have not been introduced which does not blow over to any increase in the standard of living of the working poor. This capacity reoccur with the increase of the SMW, as the employers would want to cut back on the cos ts. The increase of the minimum wage in Hong Kong might not lead to an increase in the total income of the workers, but might only lead to a shorter working hours or even a decrease in their total income.FirmsAnother stakeholder that would be affected by the increase of the minimum wages are the firms, especially the small to specialty sized ones. Because or so of their staffs are earning minimum wage, the firms will either need to either reduce the working hours of their employees or face an increase in the do work cost. If the businesses were to reduce the employees or theworking hours, the quality of the products or function provided will most potential degrade over time due to the lack of labour. On the other hand, maintaining the same hail of labour and working hours will lead to an increased cost. In order for the firms to maintain their profitability, the prices of the product or services will most likely be increased.This will lead to the reduction of the competitivenes s of small and medium firms compared to the large firms. Because large firms can most likely afford the increase of the minimum wage, they might not need to push the prices up to keep their demands. This can be disadvantageous to Hong Kong as a whole if it leads to the closure of the small and medium firms which leaves huge industries as monopolies in the industry. Card (1995) mentioned that the minimum wage has a ripple effect in many firms, leading to pay increases for workers initially earning slightly to a greater extent than the stark naked minimum wage. Because of this, the effects previously mentioned will be amplified even to firms which pay slightly above the brisk SMW even before the increase.GovernmentIn the governments perspective, the increase of the minimum wage policy can help reduce the government expenditure in a country. According to the accessible offbeat discussion section, Hong Kong has a scheme called the Comprehensive Social Security Assistance Scheme to help those who does not have sufficient income to dispense their expenses (Comprehensive social security, 2013). For example, an able-bodied adult aged under 60 will throw HK$2,070 if he does not have a family. When the government increased the SMW, the income of the working people will increase and the amount of people that would need the government subsidies to cover their living expenses can decrease. This way, the government can go more expenditures on other aspects such as break education or housing for the poor. communityThis radical legislation will also bring several impacts on the Hong Kong society as a whole. Firstly, it has been mentioned that the increase of the minimum wage rate of Hong Kong will lead to the increased cost of firms and ultimately the consumers. Since most of the goods that can be found locallyis manufactured by workers working in a minimum wage, the increase of the SMW will most likely inflate most of the price for most goods. The habitual incre ase in the prices level will lead to inflation which brings negative impacts to the impose class part of Hong Kong. According to the Census and Statistics Department of Hong Kong, the inflation rate of Hong Kong was recorded at 4.30 percent in October of 2013 compared to October of 2012 (Monthly report on, 2013). The increase of the Statutory Minimum Wage is a mere 7.14% since it was first released at May 1, 2011 while the inflationary pressures are roughly 4% annually. This shows that the increase of the minimum wage rate is insufficient to cope with the inflationary pressures that the workers are experiencing in the society.On the other hand, the increase of the minimum wage rate had reduced the income discrimination even by a very small amount. The Hong Kong governments economic report at the year 2012 had shown that Hong Kong has a Gini coefficient of 0.537 in the year 2011 for the original household income (Half-yearly economic report 2012, 2012). This is quite a high figure as the Central Intelligence Agency (CIA)s world factbook states that Hong Kong is ranked at the 11th place for the countries with the highest Gini coefficient. Singapore on the other hand, had a much lower Gini coefficient of 0.478 in the year 2012 and is ranked 26th in the world (The world factbook, ). These figures shows that Hong Kong is one of the worst countries in terms of income equivalence whereas the income of the rich greatly outweigh the poor. By increasing the Statutory Minimum Wage rate, the citizens with low incomes will be affected as their income will increase while the citizens with high income are barely affected by this legislations. This will then reduce the riches gap even just by a very small amount and Hong Kongs Gini coefficient might drop by a slight amount in the future.Fajnzylber, Lederman, and Loayza (2002) had concluded in their paper that the increase in income inequality has a significant and beefy effect of raising abuse rates. According to the pa per, when income inequality is high, the differences between the potential gains that could be acquired from doing a crime compared with the opportunity cost of it is high. This willlead to an increase in the crime rates in a particular country where the Gini coefficient is high. By reducing the wealth gap, the government is also helping the society in minimising crime rates as the people in Hong Kong will be less desperate for them into world a criminal. Normally, people resolved into committing crimes when they cannot fulfil their grassroots needfully, therefore the increase of the SMW of Hong Kong will make it more likely for the low income group of people to survive which will ultimately lead to the reduction of crimes.Objectives of a Social PolicyAccording to R. Titmuss (1974), the objective of social policy is to meet social needs and come on social integration and discourage alienation. Because the increase of the Statutory Minimum Wage is a form of social policy, it shou ld fulfil the three criteria mentioned by R. Titmuss. This part of the paper will talk about how well the increase in the minimum wage meet the social needs, promoting social integration, and discourage alienation in the Hong Kong society. showdown the Social NeedsThe social needs of a society are the basic fundamentals that the citizens living in Hong Kong needs. One of the ways to dissect these needs is using Maslows hierarchy of needs. At the shtup of the triangle and the very basic fundamental human needs are the physiological needs which includes basic necessities to live such as food, shelter, and air. The social policy released by the government at May 1, 2013 regarding the new Statutory Minimum Wage does affect the physiological welfare of the minimum wage workers at about aspects. By increasing the SMW, the income of a substantial amount of the workers were expected to rise. This will allow them to be able to afford more of the basic products to survive such as food, wat er, etc. Due to the increase in their incomes and thus their disposable income, the spending powers of these parts of the society will increase and they should have a better standard of living.However, the paper had mentioned before that inflationary pressures can reduce and dilute the effects of the minimum wage increase. The increase inthe labour costs, which is one of the figures of production, can lead to a cost push inflation in which the rising costs are passed on to the consumers. make up though the workers earning the SMW might feel richer, the general price increase may lead to a small or no alterment in the living standards. According to Trading Economics (2013), Hong Kongs Consumer Price Index (CPI) is reaching its all time high of 116.8 Index Points in September of 2013. This might even lead to a decrease in the living standard of the working poor as most goods and services are becoming more expensive.Another aspect that is related to the physiological needs of the so ciety is shelter, or the subscribe to of the apartments in the study of Hong Kong. According to Global Property Guide (2013), the property prices of land of Hong Kong had surged 73% which leads to really high rent rates which takes up a huge part of a persons salary. The introduction of the increase in the minimum wage social policy does nothing to tackle this problem, meaning that the working poor would still need to spend a substantial amount of their salary just to pay for the rent. Even though the Hong Kong Housing Authority is currently attending to this particular need, it is insufficient to fulfil everyones physiological need of a decent shelter.The second level of Maslows hierarchy of needs is the safety needs of every individuals. Every working men would want a job that is both secure and consistent. They would not want a job that does not ensure a regular income to cover their expenses. When the minimum wage rate is increased, the firms will try to cut their costs someti mes by making the workers redundant or reducing their working hours. Both of the actions mentioned will lead to an insecure feeling by the workers as they might lose their jobs or have a decreased income. Therefore, the social policy for this case does not improve the social needs of the society, and even bring a sense of insecurity and anxiety. The other 3 aspects of the Maslows hierarchy of needs which are the love/belonging, esteem, and self-actualisation, does not apply for this social policy as they are more related with employees with higher income and mostly the white collar workers.Promoting Social Integration and Discourage estrangementLastly, R. Titmuss (1974) mentioned about promoting social integration and discourage alienation. Social integration is a dynamic and principled extremity where all members participate in dialogue to achieve and maintain peaceful social relations (United Nations Department of Economic and Social Affairs). This focused on both equal rights an d secure social welfare. Even though the increase of the SMW of Hong Kong does not have anything to do with equal rights, it can resurrect a better social welfare in the society. As mentioned, there is a direct correlation between higher income and lower crime rates. Therefore, if the increase in the minimum wage does increase the total income of each or most individuals working at minimum wage rate, there is a high possibility that Hong Kong can promote more social integration. When social integration occurs, alienation are automatically reduced. When the wealth gap are reduced, communities can be more easily formed as the social classes will be more integrated towards each other.Conclusion and EvaluationAs shown in the paper, the increase of the Statutory Minimum Wage in Hong Kong have led to both positive and negative functions in the society. Even though the aims and objectives of this social policy is favourable and positive, there are many factors which can turn them into neg ative results. One of the biggest factor is the difference between the inflation level compared with the increase in the wage rates. Right now, Hong Kong have a high CPI of 116.8 which can greatly reduce the effects of the improved minimum wage rates. I believe that the increase of the Statutory Minimum Wage from HK$28 to HK$30 is insufficient and should be besides increased to at least HK$32 to counteract the inflation rates.On the other hand, the Hong Kong government should take actions to control the inflationary pressures which will be created from this increased labour costs. Fiscal policies such as the use of a higher progressive direct tax for the citizens with high income can be used to both control inflation and increase the government revenue for other uses. Moreover, the government should also try to tackle other social problems that are currently a big issue in Hong Kong like the housing problem. This situation is as critical as the increased amount of the working poor and the huge wealth inequalityand should be countered immediately. In order for a social policy to be beneficial to the society, R. Titmuss (1974) believed that it should cover all the three aspects, namely the social needs, social integration, and discourage alienation. Therefore, the government should take account of these features and redesign the Statutory Minimum Wage, increasing it to a more substantial amount.ReferencesMinimum Wage Commission, (2012). 2012 report of the minimum wage commission. Retrieved from website http//www.mwc.org.hk/en/downloadable_materials/2012MWCReport-Eng.pdfHu , F., Yun , M. (2013, September 30). Hong kong poverty line shows wealth gap with one in quintuplet poor. Retrieved from http//www.bloomberg.com/news/2013-09-29/hong-kong-poverty-line-shows-wealth-gap-with-one-in-five-poor.htmlLam, C. (2013, September 30). Hong kongs first official poverty line purpose and value. Retrieved from http//www.povertyrelief.gov.hk/eng/pdf/20130930_article.pdf(201 3, December 10). Retrieved from http//www.tradingeconomics.com/hong-kong/inflation-cpiResidential prices blow up in hong kong. 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