[2014]

How can social reforms resolve the grievances at the root of the protests?

        Occupy protesters should realize that political solutions would not necessarily help to cure the social and economic ills that bred their discontent.  Globalization, a continuing trend, has caused high income disparity in various developed economies as well as here, and scarcity of land, high local property prices.  Neither outdated laissez-fairism nor traditional liberal largesse offers adequate solutions.

Society should and can provide the remedy.  Three current schemes – Comprehensive Social Security Assistance, subsidized housing and minimum wage – should be remodelled into an expanded system of payments of income supplements, so as to maintain a socially protected, minimum standard of living.  The standard incorporates a housing standard valued at market prices; hence, with the supplements, all will be able to afford buying their home. 

The socially protected standard of living will be expressed as a percentage of the median household income.  The percentage applicable to each household would depend on the number, ages, disabilities etc., as well as earned incomes, of the household’s members.  Low-income working and elderly households will especially gain in living standard.  Yet incentive for self-advancement is maintained.  For every $100 increase in earned income, the supplement might reduce by only, say, $40, so that the household’s protected standard of living rises by $60. 

The amount of supplement is the shortfall of the household’s earned income from its socially protected living standard.  As subsidies to individual households will exactly match their needs (i.e. income shortfalls), replacing subsidized housing with income supplements would save public funds.  Moreover, the government will no longer build housing, but will sell more land; it will also sell or let existing public rental housing units at market prices/rents.  Thus, despite the increase in subsidies for the most needy, a substantial net surplus would accrue to the Treasury

The Occupy movement shows that the above reforms are needed urgently.  Later, the government can focus on economic development, so that young people have better job prospects.  An economic solution, however, may prove more elusive than the political and social ones.

See also the full article, Post-Occupy political and socual solutions


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