Workers need universal social protection
Access to social protection, combined with decent jobs, is fundamental to unleash the full potential of the workforce in Asia and the Pacific. It is also a human right. Social protection can help ease disruptions to earning trajectories that are inherent to our lives, such as having children, losing a job or becoming old. It can help mitigate economic downturns and the impacts of megatrends such as climate change-related disasters, population ageing, digitalization and the changing world of work. It is key to worker productivity.
Source: ILO (2022), World Social Protection Database. Available at https://www.social-protection.org/. (Accessed on 6 April 2022).
Social protection is critical to shield households against economic and health shocks. But coverage levels remain very low in the region. In most countries, only a minority of workers contribute to a social protection scheme. Underinvestment, weak administrative capacity and high levels of job insecurity and informality mean few workers have the option to pay into a contributory scheme. The dominance of informal employment means that some 1.4 billion people withing the workforce are excluded from contributory social protection schemes, the majority are women. Where benefits exist, the levels are often insufficient to cover basic needs.
Investing in a package of universal child, disability and old-age benefit schemes at global average benefit levels would reduce poverty by 42 per cent on average across the 19 countries for which the ESCAP Social Protection Simulator provides results. In many countries, a substantial poverty reduction impact could be achieved by a modest child benefit of 4 per cent of GDP per capita. The same benefit package would also reduce income inequality.
Source: ESCAP elaboration using Social Protection Simulator based on Household Income and Expenditure Surveys (2015-2020).
Household wealth is the most important variable determining access to essential goods and services. By providing income security social protection safeguards access to these opportunities, while boosting workers’ productivity and overall economic growth. Social protection allows households to plan ahead and invest in clean energy, more nutritious food and their children’s education. A regular, predictable and adequate social protection benefit demonstrably increases households resilience and worker productivity.
Social protection is all the more important as our societies grow older. The proportion of persons 65 years and over in the region is set to double to one fifth of the population by 2050. But the adequacy of old age pensions remain woefully low. This is driving older persons to continue to work beyond retirement age, often informally and for decreasing wages. Those who cannot work mainly rely on their families, putting pressure on household finances and creating a care burden often shouldered by women.
To enable older persons to live independently and in dignity, the expansion of old age pensions, through a blend of contributory and non-contributory schemes, is the best way to ensure a basic level of income security for all. Adjustments to their design are needed to reach previously ineligible populations and recognize gender-specific work patterns, including career interruptions and time dedicated to unpaid care work.
To build resilience among population groups vulnerable to disasters and encourage the transition to greener societies, social protection schemes need to enable access to basic goods and services in the immediate aftermath of disasters. Non-contributory cash transfers can ensure food security, facilitate savings and help households diversify their sources of livelihoods.