By Mira Bierbaum, Veronika Wodsak and Christina Behrendt | International Labour Organization (ILO)

 

The multiple crises we are currently confronted with, including the COVID-19 pandemic, violent conflicts, climate change and environmental degradation, painfully remind us of everyone’s vulnerability to shocks and lifecycle risks. Workers in the informal economy and their families are particularly vulnerable, not least because of their lack of access to social protection. Investing in social protection and employment policies is critical for a more inclusive recovery, decent work and a just transition to environmentally sustainable economies and societies.

 

The World Employment and Social Outlook 2022 of the International Labour Organization (ILO) – just published before the onset of the war in Ukraine – highlights inequalities in countries’ capacities to respond to the current social and economic challenges, which jeopardizes the prospect for a return to pre-pandemic performance for much of the world over the coming years. Global employment still has not recovered to pre-pandemic levels, leaving a deficit of 52 million full-time equivalent jobs. Particularly concerning are surges in unemployment and poverty rates among working people. The share of workers living in extreme poverty increased from 6.7 per cent in 2019 to 7.2 per cent in 2020, affecting 150 million workers in Africa alone. In addition, losses in employment were particularly concentrated among low-income households. These developments are further increasing pressures on social protection systems in a context of already high fiscal pressures.

In addition, two-thirds of the global labour force remains in the informal economy, meaning that they are — in law or in practice — not covered, or insufficiently covered, by formal arrangements through their employment or social protection systems, such as paid annual or sick leave, maternity or unemployment protection. The COVID-19 pandemic starkly highlighted their vulnerability in the absence of social protection. They faced existential struggles to make a living and feed their families while at the same time being among the worst hit by the lockdown measures and often working in the most hard-hit sectors.

 

Social protection as an integral part of decent work

In this way, the pandemic underscored the vital importance of investing in social protection systems as an integral part of promoting decent work that meets people’s aspirations for their working lives, in conditions of freedom, equity, security and human dignity. Decent work is work that pays a fair income and guarantees security in the workplace, social protection for workers in all types of employment and their families, as well as prospects for personal development and social integration – be it in the digital economy, in agriculture, or any other sector.

The four pillars of decent work — employment creation, social protection, rights at work and social dialogue — are thereby interdependent and mutually reinforcing. Social protection, for example, promotes better health and education outcomes, which contribute to a productive and employable workforce that is aware of its rights at work and in a position to make their voices heard. At the same time, by providing an adequate income level, effective labour market, employment and wage policies can reduce to some extent the “pressure” that is put on social protection systems, especially on social assistance benefits. Similarly, the extension of social insurance to previously unprotected workers can facilitate more adequate levels of protection, so as to ensure that workers in all types of employment, including self-employment, are adequately covered.

 

Harnessing an integrated approach

An integrated approach that considers employment and social protection policies as two sides of the same coin is therefore particularly effective in addressing the current economic, social and financial challenges: in addition to reducing demands on social protection systems, more individuals in decent work also means that more workers and employers contribute to the financing of social protection through social security contributions and taxes, making it more sustainable and equitable. Such an integrated approach is also essential for promoting gender equality, as even highly gender-responsive social protection systems cannot fully offset the gender inequalities that lie at the root of women’s income insecurity, including gender inequalities in labour markets as well as women’s disproportionate responsibility for unpaid care and domestic work. Similarly, social protection systems can promote the full participation of people with disabilities in all aspects of the economic and social life by providing benefits to offset disability-related costs for those who are in employment, supplemented by income replacement for people with disabilities who are not in a position to work. An integrated approach that simultaneously invests in jobs and social protection is key for accelerating progress on achieving the Sustainable Development Agenda by 2030 and hence a cornerstone of the United Nations Secretary General’s Common Agenda,

In addition, social protection is a crucial element of policies that can support the structural transformation of economies towards higher-productivity activities and good-quality employment, and a just transition towards environmentally sustainable economies and societies for all. How so? In addition to promoting better health outcomes by ensuring access to healthcare, children and adults also need to develop or update their knowledge, skills and know-how to access decent, productive and freely chosen employment. They can do so more easily when social protection ensures at least a basic level of income security. Social protection also allows people to take more risks, thereby facilitating innovation and entrepreneurship. At the same time, social protection supports employment in the care sector, which accounts for a sizeable sector of the economy and provides substantial employment opportunities, especially for women. Increased investments in a care policy package, contributing to the targets set by the Sustainable Development Goals (SDGs) and the ILO’s Decent Work Agenda, could generate 280 million additional jobs by 2030 (compared to a status quo scenario).

 

Reducing vulnerability of workers and enabling their transition to the formal economy

The structural transformation of the economy also hinges on, and contributes to, fostering the progressive transition of enterprises and workers from the informal to the formal economy. The extension of social protection to those currently in the informal economy is one of key ingredients of a comprehensive strategy to reduce the vulnerability of workers and facilitate their transition to the formal economy. Notwithstanding the enormous challenge ahead, country experience has shown that it is possible to extend social protection to workers in the informal economy. Innovative solutions have been developed to address multiple barriers, including by adapting social security legislation; compliance and enforcement mechanisms; administrative procedures; the design of benefits; financing mechanisms and contribution schedules; and service delivery and monitoring mechanisms.

Social protection is also crucial for combating the most exploitative forms of work, such as child and forced labour, which is particularly critical in view of the projected rise in child labour due to the COVID-19 pandemic — from 160 million in 2020 to 168.9 million by the end of 2022. By providing a stable and predictable income and effective access to healthcare, social protection can prevent households from engaging in harmful coping strategies in the face of individual or economic shocks, such as pulling children out of school and sending them to work or cutting spending on food. Promoting decent work that delivers a fair income not only supports parents and caregivers in keeping children out of child labour but is essential in reducing vulnerabilities more generally. Workers need access to decent and productive employment to make ends meet for themselves and their families — this is essential for preventing working poverty. The upcoming 5th Global Conference on the Elimination of Child Labour in South Africa (15-20 May 2022) will discuss, among other aspects, the central role of social protection in tackling child labour.

 

Accelerating progress towards universal social protection

Progress towards universal social protection requires a concerted effort to ensure that workers in all types of employment, including part-time, temporary or self-employed workers, are adequately covered by rights-based social protection systems. This is not a pipe dream, but a clear political commitment agreed by governments, workers and employers at the International Labour Conference in 2021. This strong commitment is an integral part of a human-centred recovery that is inclusive, sustainable and resilient, as reflected in the Global Call to Action for a Human-centred Recovery from the COVID-19 Crisis and in the UN Global Accelerator for Jobs and Social Protection for Just Transitions.

 

Social Protection Programmes: 
  • Social insurance
Social Protection Building Blocks: 
  • Policy
    • Coverage
    • Expenditure and financing
    • Governance and coordination
Social Protection Approaches: 
  • Universal Social Protection
Cross-Cutting Areas: 
  • Environment
  • Health
    • COVID-19
  • Labour market / employment
    • Informality
    • Unemployment
Regions: 
  • Global
The views presented here are the author's and not socialprotection.org's