Making the Right to Social Security a Reality for All Workers

The Indian Journal of Labour Economics https://doi.org/10.1007/s41027-022-00378-6 ARTICLE Making the Right to Social Security a Reality for All Workers Shahra Razavi1 Accepted: 21 June 2022 © The Author(s), under exclusive licence to Indian Society of Labour Economics 2022 Abstract The right to social security has strong anchoring in international human rights law and forms a critical component of international labour standards. While social security has sometimes been portrayed as inimical to economic dynamism, there is a much larger body of work that posits a positive relationship between social welfare and economic progress. The COVID-19 crisis has revealed stark gaps in social protection. Workers in the informal economy have been particularly hard hit, as they were excluded from formal work-related protections and were not eligible for social assistance that often targets the very poor and those outside the labour force. Social assistance schemes with flat-rate benefits can be an element of a rights-based national social protection system if their eligibility criteria, benefit levels and modalities are set out in the national legislation, to ensure transparency and accountability. However, social assistance schemes should be part of a broader social protection system, which usually combines tax-financed schemes and social insurance to guarantee a social protection floor and provide higher-level benefits in line with international social security principles. Inspired by a vision that seeks to formalize all economic units, especially micro-, small- and medium-sized enterprises, and make the right to social protection a reality for workers in all types of employment, the paper points to a number of country examples that have extended social protection by combining contributory and non-contributory elements. This vision is particularly needed at a time when climate change adaptation, digital transition, and other drivers of transformative change call for the formalization of jobs and enterprises, while making it possible for states to mobilize the maximum available resources to build universal, comprehensive and adequate social protection systems that can facilitate inclusive transitions. Keywords Social security · Social protection · Social insurance · Social assistance · Rights · Financing * Shahra Razavi 1 Social Protection Department, International Labour Organisation, Route des Morillons 4, 1211 Geneva 22, Switzerland 13 Vol.:(0123456789) ISLE The Indian Journal of Labour Economics 1 Introduction The right to social security has strong anchoring in international human rights law, most notably the Universal Declaration of Human Rights (UDHR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR). It also forms a critical component of international labour standards, having been developed by ILO constituents to substantiate and give effect to the human right to social security (as elaborated in Section 2). This includes the need for medical care and income security in the event of various life-cycle risks. While social security has sometimes been portrayed as inimical to economic dynamism and development, there is a much larger body of work that posits a positive relationship between social welfare and sustained economic progress and prosperity. These positive synergies have been rediscovered more recently by the proponents of the social investment state. The confluence of ideas recognizing the social, economic and political necessity of social protection resonated strongly with the international community, giving social protection a prominent place in the 2030 Agenda for Sustainable Development (2030 Agenda). Despite the overall positive historical trend in the development of social protection schemes, many structural constraints stand in the way of making the right to social protection a reality for all, including all workers, as Section 3 elaborates. The COVID-19 crisis has revealed stark gaps in social protection, with more than half of the world’s population having no social protection cash benefit to fall back on, and only 30.6 per cent of the world’s working-age population being legally covered by comprehensive social protection systems that include the full range of benefits. Workers in the informal economy have been particularly hard hit, with little or no recourse to social protection, as prior to the pandemic they were excluded from formal work-related protection as well as from state-provided social assistance that often targets the very poor and those outside the formal labour force. The proliferation of social assistance schemes in recent decades represents an important advance and can be an essential element of rights-based national social protection systems providing coverage for some of the most vulnerable groups. However, narrowly targeted social assistance will not provide adequate social protection for the workingage population when they need it. It will leave the majority of workers stranded, left to fend for themselves, while only a privileged few will be able to afford the privatized and individualized market-based solutions such as private health insurance or pensions. Inspired by a different vision, one that seeks to formalize all economic units, especially micro-, small- and medium-sized enterprises and make the right to social protection a reality for workers in all types of employment, Section 4 show-cases policy reforms in several countries that have extended social protection to large groups of workers in the informal economy, combining contributory and non-contributory elements. This vision is particularly needed at a time when climate change adaptation, digital transition, and other drivers of change call for the formalization of jobs and enterprises, while allowing governments to 13 ISLE The Indian Journal of Labour Economics mobilize resources to build universal, comprehensive and adequate social protection systems to facilitate inclusive transitions. The COVID-19 crisis has entailed important and ongoing changes, both enabling and disabling, as Section 4 elaborates. The pivotal question is if this crisis will mark a turning point towards a more equitable and robust world capable of withstanding shocks and transformations while ensuring social justice, or if countries will succumb to fiscal austerity and piece-meal solutions that leave workers, enterprises and vulnerable populations defenceless, having to re-live the tragedy of the past two years. 2 Social protection as a human right and a worker’s right The right to social security is firmly anchored in international human rights instruments, with articles 22 and 25 of the Universal Declaration of Human Rights (UDHR) boldly stating that everyone, as a member of society, has the right to social security as well as to a standard of living adequate for their health and well-being. The subsequent adoption in 1966 of the International Covenant o (...truncated)