World Labour Report Preface - Social Security

World Labour Report 2000

 

Preface

 


The most widespread demand of people today is for security. In a world characterized by continual and increasing change, anxiety and uncertainty have grown. Globalization has created extraordinary new opportunities, which have been a major driving force behind recent growth in the world economy. But the inequality of opportunity has been just as extraordinary, both within and between countries. The advantages of open economies and open societies are an accepted reality for most. What is now becoming increasingly evident is that the benefits are not reaching enough people. Uncertainty is no longer the sole preserve of the socially excluded. Today, it reaches deep into middle class attitudes and reactions, with many parents fearing that their children may not have a better life than their own. In many countries increased global competition has led to job losses, or to flexible employment arrangements that are often less secure and provide fewer social benefits than regular jobs. Short-term capital movements have made econ­omies more volatile, resulting in more frequent and more severe financial and economic crises, which have led to sharp rises in unemployment and poverty. All these developments have contributed to a growing sense of insecurity among workers, which goes a long way towards explaining the resistance that can be observed in many quarters to globalization — resistance which might in the end jeopardize the process of international integration and bring to a halt the benefits which it is bringing to people throughout the world.

In my report to the ILO Conference last year, Decent work, I highlighted the importance of security for all workers. Security is a many-faceted notion. It encompasses safety and health at work, jobs which are stable, skills and abilities which can be applied productively, guarantees for income and access to public services, adequate incomes in old age or in ill-health and protection against contingencies of many sorts. It also embraces the right to organize and defend one’s rights, the right to freedom from violence and oppression. I believe that addressing this set of concerns is not merely one goal among many others. It is the very bedrock of a decent society, and the basis for dynamic economies because it is a primary source of social legitimacy. Alarmist rhetoric notwithstanding, social protection, even in the supposedly expensive forms to be found in most advanced countries, is affordable in the long term. It is affordable because it is essential for people, but also because it is productive in the longer term. Societies which do not pay enough attention to security, especially the security of their weaker members, eventually suffer a destructive backlash.


And yet the paradox is that the majority of people in the world do not have adequate security. The systems of social protection which have been developed in industrialized countries in the course of the last century cover only a fraction of the population in low-income settings and informal work. In many developing countries no more than 20 per cent of the active population is included in regular social security systems, in much of sub-Saharan Africa no more than 10 per cent. It is an affront to all human values that, in many of these countries, most working people and their families have no access whatsoever to social protection, sometimes not even to rudimentary health care. Even in industrialized countries cover­age is far from complete. There is much to be done. Ways must be found to extend social protection to the millions who have none. In the search for workable solutions, new priorities will have to be established and new techniques tried out. At the same time greater efforts must be made to apply more widely the methods which past experience has shown to be effective. Above all, we must not fall into the trap of thinking that it is possible to extend social protection by spreading it more thinly. It is unthinkable that the hard-won gains of working people now covered by social security should be reversed. It is not by undermining social protection for one part of the workforce that we will succeed in improving it for another.

This report offers a snapshot, a review of where we stand globally on income security and social protection — the main problems which are being tackled, the instruments which are being used, their successes and failures, the challenges for the future. It looks at how changing demographics and social patterns are changing needs for security, at trends in social security expenditures, at the specific problems of pensions, health care, disability, unemployment and other benefits. And it discusses how systems of protection might be extended to reach the population as a whole, and restructured to meet new needs.

One of my top priorities is achieving gender equality across the whole range of ILO activities and concerns. This report gives concrete expression to that objective. Many people assume that social protection is mostly gender neutral. But the facts are different. Social protection schemes not only reflect existing inequalities between women and men in the labour market; they also, in some cases, reinforce them. By delineating what kind of schemes perform badly in this respect, the report casts new light on issues — such as the respective roles of mandatory and voluntary pension schemes — which are too often the subject of abstract, ideological debate. In its conclusions, the report gives priority to a set of measures that will serve to address the unacceptable bias that still leaves women with substantially lower levels of social protection.

This report is about income security, and in particular about the forms of social protection which can provide it. That means that it pays relatively less attention to employment, to the enterprises where jobs are created, and to the labour market institutions and policies which create or deny access to income-earning opportunities. These too are sources of income security, indeed they are the primary sources of income security. As is said in Chapter 1, “social protection


can cope with fluctuations in employment within certain bounds, but chronic employment problems are sure to undermine any social protection system”. In reality, these are different aspects of the same problem, which ultimately need to be considered together because they are mutually reinforcing. Achieving decent work for all women and men will be the key to security, if by decent work we mean work which provides not only a decent income today but also longterm income security against the economic uncertainties and risks that workers face in their jobs and after retirement, and a working environment which respects rights and aspirations, which offers solidarity and participation.

This is the next challenge. To meet it, a new programme has been launched in the ILO, the InFocus Programme on Socio-economic Security. This major new initiative will investigate how economic, labour and social policies can be combined to promote socio-economic security for all women and men as the basis of social justice and economically dynamic societies. To do so it will take a fresh look at different dimensions of security in labour markets and enterprises, in work and in jobs, and at how they interact with other forms of social protection and income security, including those which are analysed in this report. It will look at the primary causes of insecurity in different economic contexts, what impact social and labour policies have had on socio-economic security in various parts of the world and for various groups, and what policy options exist to improve it.

This will require new research and new data. The pages that follow demonstrate that there is no substitute for sound analytical and empirical research if economic and social policy is to have a solid foundation. A careful reading of the evidence is the best riposte to polemics against the sustainability of social protection. It will be important to extend and systematize our knowledge, identify best practice and develop benchmarks by which we can judge whether progress is being made. The key to progress is finding solutions, practical ways of solving difficult problems.

 
Finally, it can never be overstressed that freedom and democracy provide the context for workers’ participation in the decisions that affect them. For social protection schemes to reflect workers’ legitimate aspirations accurately, democratic institutions must be in place and functioning. Amartya Sen — the 1998 Nobel Prize laureate in economics — reminded us, when he addressed the 1999 session of the International Labour Conference, that no democratic country has ever suffered a famine. It is my intention to work unstintingly for a world in which all workers benefit from a decent minimum level of security. To that end, it is vital that representative institutions, representing workers and employers, the State and other interests in civil society join forces in order to build this goal into the very fabric of economy and society.

April 2000                        Juan Somavia

The English version of the report was edited by Geraldeen Fitzgerald.

View some of the statistical tables included in the Report.


ISBN: 92-2-110831-7

45 Swiss francs

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Updated by JD. Approved by ER. Last update: 1 July 2000