Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Social protection pays off

Shahra Razavi 25th March 2020

Governments must use the momentum created by the COVID-19 pandemic to make rapid progress toward collectively financed, comprehensive social-protection systems.

social protection
Shahra Razavi

If the COVID-19 pandemic has sent the world one message, it is that we are only as safe as the most vulnerable among us. Those who are unable to quarantine themselves or to get treatment endanger their own lives and the lives of others, and if one country cannot contain the virus, others are bound to be infected, or even re-infected. And yet, around the world, social-protection systems are failing miserably at safeguarding the lives and livelihoods of vulnerable groups.

Nearly 40 per cent of the world’s population has no health insurance or access to national health services. Some 800 million people spend at least 10 per cent of their household budget on health care each year, and 100 million people fall into poverty because of medical expenses. This means that many simply lack the means to seek treatment when they are sick—including when they have highly contagious diseases like COVID-19.

Compounding the problem, an overwhelming majority of workers lack the economic security to take sick leave or cope with an unexpected emergency. Because fewer than two-thirds of countries have a social insurance and/or social assistance scheme in place to provide sickness benefits, the ill are often forced to choose between endangering personal and public health and paying their bills.

Not surprisingly, unemployment protections are also severely inadequate, despite their critical role in supporting household incomes and stabilising aggregate demand. Already, enterprises that depend on suppliers in outbreak-affected regions or that face reduced demand due to lockdowns and other containment measures have come under immense pressure. Hundreds of thousands of jobs are now in peril. And yet only one in five unemployed people worldwide can count on unemployment benefits.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

In fact, as it stands, 55 per cent of the world’s population—about four billion people—do not benefit from any form of social protection whatsoever, with many countries relying on market-based solutions (which only some can afford) to fill the gaps. As the COVID-19 pandemic starkly demonstrates, this not only hurts the poorest and most vulnerable; it threatens the wellbeing of entire societies and of the entire global community.

Minimum levels

This is not news to world leaders. After the last global catastrophe—the 2008 financial crisis—the international community unanimously adopted the International Labour Organization (ILO) Social Protection Floors Recommendation (no. 202), thereby committing to establish minimal levels of protection that would form the basis of comprehensive social security systems.

In 2015, world leaders took another promising step forward when they agreed to the 2030 Agenda for Sustainable Development. Many of the Sustainable Development Goals advance the social-protection imperative. For example, target 3.8 aims to ‘achieve universal health coverage, including financial risk protection, access to quality essential health-care services, and access to safe, effective, quality and affordable essential medicines and vaccines for all’. Target 10.4 calls for countries to ‘adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality’.

But, as the COVID-19 crisis makes clear, not nearly enough progress has been made. If the pandemic has a silver lining, one hopes that it spurs governments to expand access to health services, sickness benefits and unemployment protection. After all, evidence shows that such spending has a larger positive multiplier effect on the economy than other measures (such as tax reductions for higher-income earners, extension of credit to first-time homebuyers, and some corporate tax provisions) and can support social and political stability.

How to pay

Of course, there is still the question of how to pay for it. The ILO estimates that, for developing economies, the average financing gap for implementing an adequate social-protection floor is equivalent to 1.6 per cent of national gross domestic product. For low-income countries, that gap is much larger—around 5.6 per cent of GDP. They are unlikely to have enough fiscal space to close that gap on their own.

Yet the world has never been as wealthy as it is today. Pandemic-induced recession or not, we can mobilise the necessary resources. To this end, countries should implement corporate-tax reforms aimed at ensuring that multinationals contribute their fair share to public coffers. Progressive income and wealth taxes, as well as policies to reduce illicit financial flows, would also help.

But these measures would take time to have an effect and, with the pandemic already disrupting economic activity and decimating incomes and demand, speed is crucial. In the immediate term, both developed and developing countries need more flexibility for deficit financing and concessional international borrowing to support investments in social-protection systems.

Increasing spending

Many governments—particularly in countries with health-care systems funded by social contributions or taxes—are already increasing spending, in order to ensure access to necessary services during the COVID-19 crisis, including by integrating prevention, testing and treatment measures into benefit packages. South Korea, for example, conducts thousands of COVID-19 tests each day in government-funded drive-through testing centres.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

Moreover, a number of governments have ramped up economic support to households and businesses. France, Hong Kong, Ireland and the United Kingdom have extended sickness benefits to quarantined or self-quarantined workers. Germany and the Netherlands are offering partial unemployment benefits to workers whose hours have been cut due to plummeting demand.

Similarly, China, France, Portugal and Switzerland have broadened eligibility for unemployment benefits to include workers at businesses that have been ordered to close temporarily, while Australia, China and Portugal have expanded social assistance for vulnerable populations. And many countries—such as China, France and Thailand—have delayed deadlines for social-security and tax payments.

But these measures are just a first step. Governments must use the momentum created by the current crisis to make rapid progress toward collectively financed, comprehensive and universal social-protection systems. Only then will our societies and economies be able to weather the COVID-19 pandemic—and the other crises to come.

Republication forbidden: copyright Project Syndicate 2020, ‘Social protection pays off’

Shahra Razavi

Shahra Razavi is director of the Social Protection Department at the International Labour Organization.

You are here: Home / Politics / Social protection pays off

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic

Most Recent Posts

transition,deindustrialisation,degradation,environment Europe’s industry and the ecological transitionCharlotte Bez and Lorenzo Feltrin
central and eastern Europe,unions,recognition Social dialogue in central and eastern EuropeMartin Myant
women soldiers,Ukraine Ukraine war: attitudes changing to women soldiersJennifer Mathers and Anna Kvit
military secrets,World Trade Organization,WTO,NATO,intellectual-property rights Military secrets and the World Trade OrganizationUgo Pagano
energy transition,Europe,wind and solar Europe’s energy transition starts to speed upDave Jones

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

Social policy in the European Union: state of play 2022

Since 2000, the annual Bilan social volume has been analysing the state of play of social policy in the European Union during the preceding year, the better to forecast developments in the new one. Co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), the new edition is no exception. In the context of multiple crises, the authors find that social policies gained in ambition in 2022. At the same time, the new EU economic framework, expected for 2023, should be made compatible with achieving the EU’s social and ‘green’ objectives. Finally, they raise the question whether the EU Social Imbalances Procedure and Open Strategic Autonomy paradigm could provide windows of opportunity to sustain the EU’s social ambition in the long run.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

Discover the new FEPS Progressive Yearbook and what 2023 has in store for us!

The Progressive Yearbook focuses on transversal European issues that have left a mark on 2022, delivering insightful future-oriented analysis for the new year. It counts on renowned authors' contributions, including academics, politicians and analysts. This fourth edition is published in a time of war and, therefore, it mostly looks at the conflict itself, the actors involved and the implications for Europe.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube