The COVID-19 pandemic has laid bare the profound insecurities and inequalities around the world, most immediately in terms of access to quality health care. A staggering 40 percent of the world’s population is not affiliated to a health coverage scheme, having to resort to regressive out-of-pocket payments to access health services, pushing many into poverty. 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.
Given the years of under-investment in public health services, staff shortages are endemic around the world, while wages and working conditions have been insufficient to guarantee quality care and public trust in the health system. Comprising 70 percent of the health workforce, women count among the workers now deemed essential, but many are over-worked and underpaid, working without adequate personal protective equipment, and at high risk of exposure to the virus. Globally, nearly 40 percent of the labour force has no legal entitlement to sickness benefits. The proportion with effective coverage may be even smaller, compelling many to choose between endangering personal and public health and going to work in order to pay their bills.
With the measures put in place to contain the spread of the virus, what began as a health pandemic has now morphed into an unprecedented economic recession, on a scale not seen since the Great Depression. According to the International Labour Organization (ILO), hundreds of thousands of jobs are now in peril. And yet only one in five unemployed people worldwide can count on unemployment benefits. Even in high-income countries that are able to provide sizeable stimulus measures, one-off payments not only provide less than a month’s living wage but also exclude millions of taxpaying undocumented immigrants.
As the crisis spreads to developing countries where the bulk of the working age population is in the informal economy without social protection coverage, guaranteeing income security and access to health care becomes a formidable challenge, both financially and administratively as most of the people in need are not part of any registry or database. Without pro-active government efforts to support self-employed workers and small and medium-sized enterprises in affected sectors to stay in business and retain their workers, there is a risk of massive lay-offs and social dislocation. One of the lessons of the crisis is that targeted cash transfers, while certainly part of the necessary response, are not sufficient when large segments of the population – beyond the so-called poor and vulnerable – are affected and at risk of poverty.
The loss of life, human suffering and the profound economic and social repercussions that societies are facing due to the pandemic, should spur governments to invest more in social protection systems, including floors, which they unanimously pledged to build in 2012 when they adopted the ILO’s Social Protection Floors Recommendation (No. 202) in a tripartite consensus. By expanding access to health services, sickness benefits, unemployment protection, social assistance and other social protection benefits, government action can not only save lives and livelihoods, but it can also generate large positive multiplier effects on the economy and support social and political stability.
Developed countries are in a relatively strong position to provide the fiscal outlays needed to respond to the crisis by investing in their health and social protection systems. Developing countries, however, have been seeing major capital outflows as well as sharp declines in revenues from exports and tourism. They could put in place a range of measures to facilitate domestic resource mobilization, through progressive wealth and income taxes, complemented by measures that require global coordination, such as corporate tax reforms aimed at ensuring that multinationals contribute their fair share to public coffers. However, some of these measures would take time to have an effect, and with the pandemic already decimating incomes and livelihoods, speed is of the essence.
Calls for a temporary moratorium on developing countries’ external debt and a massive increase in the issuance of Special Drawing Rights (SDRs) by the International Monetary Fund (IMF), are among the measures being proposed to increase developing countries’ fiscal space. Better coordination is also necessary to ensure that resources allocated to social protection are used equitably and efficiently and provide coverage for the so-called “missing middle” of workers and small businesses in the informal economy.
Evidence from previous crises shows that countries that have effective health and social protection systems in place that provide universal coverage are better placed to respond to sudden shocks and crises. The call to “build back better” means using the momentum created by the current crisis to make rapid progress toward collectively financed, comprehensive, and universal social protection systems, rather than market-based solutions for those who can afford it and porous safety nets for the poor. Furthermore, the COVID-19 crisis has highlighted the crucial need for societies to recognize and invest in the parts of economy that are “essential” to care for human beings, including universal health care, childcare and long-term care services.
Strengthening national social protection systems through a nationally defined social protection floor, that guarantees access to health care and at least a basic level of income security throughout the life course and is developed through inclusive social dialogue involving workers and employers' organisations is critical. By ensuring the right to social security for all, it can help us weather the current crisis and stand us in good stead when the next crisis comes.
Shahra Razavi is the Director of the Social Protection Department at the International Labour Organization (ILO). Before joining the ILO in February 2020 she was head of Research & Data at UN Women, and prior to that Senior Researcher at UNRISD.
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