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Putting social protection at the centre of pandemic recovery

Employees working at a shoe factory in Nepal. Informal workers in the garment industry have been hit hard by job losses due to the pandemic. Credit: ILO / Crozet M.

The pandemic has not only widened the gap between rich and poor further than ever before, but it has also pushed millions of people who were previously managing into crisis. If governments hope to ‘build back better’, countries must build strong safety nets to help their populations survive future shocks, experts warn.

Nearly a year on since Covid-19 was declared a public health emergency on 31 January, it’s clear that the pandemic has exposed drastic inequalities among the world’s workers, and the need for greater social protection programmes to prevent people hitting rock bottom.

Although many countries have rolled out measures such as unemployment benefits, furlough schemes and cash handouts to help populations take the income-hit, billions of people have not received any financial protection, with major gaps in the countries most susceptible to shocks. If governments hope to build resilience against future crises, experts warn these gaps must be closed.

“We know that those with secure employment and adequate health coverage and social protection coverage have been able to weather the storm relatively well,” said Shahra Razavi, director of the social protection department at the International Labour Organisation (ILO), speaking at a conference hosted by the Overseas Development Institute (ODI) earlier this month. “Then we have 61 per cent of the global workforce - two billion workers - who have been affected by this crisis who are informal workers, and they are in the hardest hit sector and remain uncovered by social protection systems, and this is making them vulnerable to poverty.”

The social protection gap. Even before Covid-19, 69 per cent of the global population was either not covered or only partially covered by social protection, including two-thirds of the world’s children. Only 22 per cent of unemployed people received unemployment cash benefits, and only 28 per cent of people with severe disabilities received disability cash benefits.

Events of the past year have highlighted just how fragile this leaves populations around the world, with as many as 150 million people predicted to be facing extreme poverty by the end of 2021. A report released yesterday by the ILO revealed that some 8.8 per cent of global working hours were lost last year as a result of the Covid-19 crisis - approximately four times greater than those wiped out during the financial crisis.

Women, young people and minority communities have borne the brunt of job losses, with the ILO warning the bulk of these losses are concentrated in lower and middle-income countries. As Razavi warned, people working in informal sectors - who make up vast swathes of the workforce in these countries - are particularly vulnerable to falling through the cracks when it comes to social protection. Millions working in typically informal professions such as domestic workers, street vendors, smallholder farmers and many jobs in the garment sector have been laid off or had their hours drastically reduced, without any support for this loss of income.

Short term support and long term protection. Although the social protection gap is a global problem, high-income and more developed countries not only tend to have stronger social protection systems but have also been able to roll out comprehensive crisis response measures to help their populations weather the storm. This in itself is widening the divide between countries. According to the UN, of the $11 trillion that had been spent globally to respond to the financial impact of the pandemic by September 2020, 88 per cent was disbursed by high-income countries compared to only 2.5 per cent in emerging and developing economies.

“In many high income countries the stimulus measures have been much more effective and much more significant in terms of compensating people for loss of income,” said Razavi, speaking to Geneva Solutions following the ODI event. “In developing countries we know that the stimulus measures have been a tiny drop in the ocean and a small fraction of the stimulus measures globally that have been put in place.”

A universal solution to a global problem. Razavi explained that the pandemic should act as a wake up call for governments around the world to strengthen social protection systems, both in their own countries and elsewhere.

“When there is a systemic shock like this it affects billions of people who are hovering around the poverty line,” said Razavi. “It's often not only the poorest of the poor but also many people who seem to be getting by relatively well, but who are actually very vulnerable.”

Developing countries in particular need support to move beyond short-term emergency measures to build durable systems that meet the needs of everyone, not just the most vulnerable in society. If governments are really serious about 'building back better' and more resilient to future shocks, universal social protection is key to ensure the task isn't quite as momentous next time.

“We are at a fork in the road,” said the ILO's director general Guy Ryder following the release of yesterday's Covid-19 and the world of work report. “One path leads to an uneven, unsustainable, recovery with growing inequality and instability, and the prospect of more crises. The other focuses on a human-centred recovery for building back better, prioritising employment, income and social protection, workers' rights and social dialogue. If we want a lasting, sustainable and inclusive recovery, this is the path policymakers must commit to.”

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