Social security for informal sector is expanded

24/06/2024 02:45 PM


Occupation shortage is disparity between supply and demand in the labor market. Before Covid-19 pandemic, many high-income countries faced increased vacancy rates and labour shortages, which persisted into 2023. This analysis examines the dynamics underlying labour market fluctuations in advanced economies, such as cyclical movements, structural shifts and pandemic-induced trends.

The International Social Security Association (ISSA) held Technical Seminar with the title: Modern policy making to tackle shortage occupations, hosted by the Belgian National Employment Office (Office national de l’emploi – ONEM) on 15–16 May 2024, gathered around 80 participants from Africa, Asia and the Pacific, and Europe. The event was organized in collaboration with the ISSA Technical Commission on Employment Policies and Unemployment Insurance (TC Employment), which produced the comprehensive background report Policy trends for tackling shortage occupations that was presented and discussed during the event.

ISSA gathered members and experts from around the world in Brussels, Belgium to discuss responses to shortage occupations and their linkages to social security. Discussions were stimulated by a new ISSA technical report on the topic. 

The report provided new insights into key labour market trends and developments in shortage occupations which were deliberated in depth and complemented by perspectives from the Organization for Co-operation and Development (OECD). A further focus was on the intersection between informal work and common shortage occupations, and the lack of social security in the informal sector.

Examples based on sources from both the International Labour Organization (ILO) and the ISSA underscored the need for quality working conditions and comprehensive social security to attract workers to shortage occupations. Encouraging progress has been observed in the formalization of domestic workers in many countries, among which Belgium and France have developed sector-specific approaches, including the use of service vouchers, embedded within broader national strategies and institutional frameworks.

The technical seminar was complemented by a webinar as its final technical session, which featured both onsite and online presentations of good practices from Argentina, Canada, China and the Netherlands, and at the same time opened the discussion to the broader ISSA membership. It was the first time for the ISSA to organize such a hybrid event, which paved the way for a new era of experiential engagement among ISSA members that combines the advantages of real and virtual encounters.  

The technical seminar and its back-to-back webinar were highly appreciated by both physical and virtual audiences who could exchange views with colleagues and peers, keep abreast of the recent developments and trends worldwide, and showcase their national good practices in tackling shortage occupations. As a next step, the TC Employment plans to organize another technical seminar on promoting sustainable employment in the region of Asia and the Pacific in the first half of 2025.

For most workers in the informal economy, the lack of social protection is not only a challenge in their daily struggles to make ends meet, but it also holds them back in their aspirations for decent work, rights and dignity. For the societies in which they live, the lack of social protection coverage undermines inclusive growth, weakens social justice and undermines the realization of human rights. 

The term “informal economy” refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements (ILO Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204), para 2).

The COVID-19 crisis and its socio-economic impacts have exposed the vulnerabilities of workers in the informal economy who lack adequate social protection coverage. In the absence of income security and effective access to health care, many workers in the informal economy face existential struggles to make a living and feed their families. At the same time, they are among those worst hit by the lockdown measures taken to contain the virus and many of them work in the hardest-hit sectors. Many workers and economic units in the informal economy have lost most or all of their income and many workers in the informal economy, particularly those working in public spaces and domestic workers, face higher health risks.

The COVID-19 crisis has also highlighted the urgency and importance of ensuring that workers in all forms of employment have adequate social protection coverage, which should be adapted to their circumstances and in line with international labour standards. This was reflected in the Resolution concerning the second recurrent discussion on social protection, adopted by the International Labour Conference in June 2021, in which governments, workers and employers of the ILO’s 187 member States committed to working towards achieving universal access to comprehensive, adequate and sustainable social protection, including nationally defined social protection floors.  Although many governments have taken emergency measures by extending existing or establishing new social protection schemes and programmes, most crisis-related measures have been short-term in nature and in many cases not sufficient to meet the urgent needs of workers in the informal economy. As the crisis passes, such temporary measures should be transformed into sustainable mechanisms to close social protection gaps, guaranteeing the effective protection of workers in all types of employment. This will not only advance progress towards universal coverage but also ensure that all parties contribute their fair share to the social security system. It will also help countries to be better equipped to deal with future crises and to promote a human-centred future of work.
The 2030 Sustainable Development Agenda commits to nationally appropriate social protection systems and measures for all, including floors, and sets a clear target to achieve by 2030 substantial coverage of the poor and vulnerable (SDG target 1.3). In addition to SDG 1 on eradicating poverty, social protection also contributes to SDG goal 2 on eradicating hunger, SDG goal 3 on good health and well-being, SDG 5 on gender equality, SDG 8 on decent work and economic growth, SDG 10 on reduced inequalities and SDG 16 on peace, justice and strong institutions.

Moreover, extending protection to so far uncovered workers is also one of the recommendations of the Global Commission for the Future of Work (2019) as part of a human-centred approach to the future of work. Some countries have made impressive progress in covering larger groups of workers and the wider population. These experiences, together with a number of recent research, offer a growing knowledge base that can provide useful lessons learnt and inspiration for other countries. Moreover, the international normative framework has been enriched by the recent adoption of two important new international labour standards, the ILO Social Protection Floors Recommendation, 2012 (No. 202), and the ILO Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204).

PV