Social Protection and Decent Work: Commitments for Prosperity

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1 Social Protection and Decent Work: Commitments for Prosperity The General Secretariat of the Organization of American States (GS/OAS) and the International Labour Organization (ILO) Regional Office for Latin America and the Caribbean, are partners in using the tools of the Inter-American Social Protection Network (IASPN) to promote cooperation that secures Decent Work commitments throughout the region end ensures effective social protection for all. Decent Work and the Social Protection Floor At the Fifth Summit of the Americas in 2009, Heads of State and Government agreed to strengthen their efforts to reduce social disparities and inequality and to exchange information on policies, experiences, programmes and best practices through the establishment of the Inter-American Social Protection Network. Likewise, they reaffirmed their commitment to the ILO s Declaration on Fundamental Principles and Rights at Work and the promotion of decent work. i In 1999, the ILO introduced the concept of Decent Work which expresses the overarching objective that men and women have opportunities for productive employment in conditions of liberty, equity, security and dignity. There are five dimensions to the rights enshrined in the concept of Decent Work. Opportunities for work that is productive refers to people s need to find employment that is productive at a fair income which ensures that they and their families enjoy a decent quality of life. Work in conditions of freedom guarantees that people should freely choose their work and that participation in union activities is an inalienable right. Work in conditions of equity refers to the fact that workers should be treated in a fair and equal manner without discrimination and that they are able to reconcile both work and family responsibilities. Work in conditions of security means that all workers should work in conditions where their safety and health is protected and that they have access to pensions and appropriate social protection. Finally, work in conditions of human dignity requires that all workers be treated with respect and be allowed to participate in decisions about their working conditions. Decent work commitments contribute to promoting employment, reducing poverty and guaranteeing human rights. ii In Latin America, where more than 80% of household income derives from employment, protecting and expanding worker rights is essential for guaranteeing the wellbeing of approximately 250 million workers throughout the region. Ensuring integrated and universal social protection as part of this commitment will also protect the rights of those who are not working, who have yet to enter the labor force, or who are unable to work because they are elderly, sick or injured. In 2009, the United Nations System Chief Executives Board adopted the Social Protection Floor Initiative (SPF). The SPF Initiative recognizes the strategic importance of universal social protection. It is one of nine global initiatives set in motion in response to the economic and financial crisis. iii The idea was born of the conviction that guaranteeing access to essential services and social transfers for all, particularly for the poor and most vulnerable, is both feasible and indispensable. The initiative promotes an integral

2 approach to social protection, strengthening both the supply and the demand for social protection, in two dimensions: 1. Guaranteeing a range of essential social rights and transfers, in cash and in kind, to ensure a minimum income and a secure livelihood for all, thus facilitating access to essential goods and services. 2. Ensuring the supply of a minimum level of essential goods and services, such as health, water and sanitation, education, housing, and basic survival information that is accessible to all. The Social Protection Floor Initiative (SPF-I) emphasizes the need to guarantee transfers and services throughout the life cycle, ensuring the well-being of children, low-income workers, and the elderly, with specific attention to vulnerable groups (based on gender, socioeconomic status, ethnicity, disability, individuals living with HIV/AIDS, migrants, and persons exposed to adverse situations such as natural disasters). The SPF initiative is flexible, since it does not establish universal minimum levels for such services, leaving each State or nation to decide what is feasible and to define the essential services that they will provide within their borders. iv Effective national strategies to extend social security in line with national priorities that are designed to ensure administrative feasibility and affordability will contribute to closing existing gaps in coverage, promoting more equitable economic growth, and ensuring Decent Work commitments for women and men. These national strategies should aim at achieving universal coverage of the population with at least minimum levels of protection as well as ensuring progressively higher levels of protection in line with ILO standards and conventions on social security. v Integrated and Coordinated Social Protection Countries in the Americas have a comparatively long history of developing social protection schemes, in many cases dating back to the early 20 th century. Over this time, the institutions that provide social protection have been strengthened, their coverage expanded, and programs have been linked to provide more extensive access to income support, health care and basic services for the poor, sick and unemployed. The current challenge in the region is to take advantage of the existing social protection structures and policies and guide them in the creation of more coherent and integrated Social Protection systems. The SPF concept has a crucial role to play in providing such guidance and ensuring policy coherence, extending both the horizontal dimension of social protection that comprises the set of social guarantees for all and committing to the expansion of the vertical dimension through the gradual implementation of higher standards in line with Convention 102. Without a doubt, more policy coherence would result in higher coverage, improved efficiency, and have a greater impact on poverty reduction. The many dimensions of poverty and economic vulnerability have spurred the development of systems that seek to provide comprehensive social protection. Fundamental to the success of this type of system is the coordination among different government offices and entities. The recent report of the 2

3 advisory group on the Social Protection Floor chaired by Michelle Bachelet and convened by the ILO in collaboration with the WHO underscores that: The social protection floor calls for policy coherence and coordination among different social policies to prevent individuals and their families from falling into poverty and deprivation and remaining stuck there. It also aims to protect those who are unable to earn a decent income through employment and to empower workers to seize economic opportunities and work their way out of poverty. vi The SPF is neither a prescription nor a universal standard but an adaptable policy approach that should be country-led and responsive to national needs, priorities and resources. The SPF guarantee can be achieved by a combination of contributory and non-contributory instruments, including social insurance, social assistance, universal benefits, in kind benefits, and private schemes in a wide array of possible combinations. The choice of these combinations should be the outcome of social dialogue and democratic decision-making. For example, in Argentina a key component of the SPF is the universal child allowance (Asignación Universal por Hijo) which combines cash transfers with access to essential services for children and adolescents of unemployed and informal economy workers as well as for parents who were previously beneficiaries of other non-contributory programs. There is also a non-contributory pension for elderly people living in poverty and for those who have not been able to meet the minimum number of contributions for a state pension. By 2009, 75% of children and adolescents were receiving family allowances and 90 % of the elderly received a pension. vii In Brazil the SPF includes a rural pension scheme, the Bolsa Familia conditional cash transfer, a universal health system and a non-contributory social assistance pension for the elderly and disabled. Bolsa Familia currently covers about 13 million families providing income support in return for their fulfilling certain human development requirements such as ensuring that children attend school and health-care check-ups, ensuring that children are vaccinated and that pregnant and lactating women receive prenatal and postnatal care. In 2011, Brazil launched its flagship programme Brazil without Poverty (Brasil Sem Miséria) which aims to reach about 16 million people living on less than US$45 a month and eradicate extreme poverty by The programme expands coverage and provides improved access to public services such as education basic health-care, water and sanitation, electricity and sewerage for those most in need. Poverty is complex and involves multiple deprivations. How the SPF articulates with contributory social insurance is equally complex. Careful attention should be paid in order not to create disincentives that inhibit the transition from non-contributory to contributory systems. Poverty traps should be avoided, and these are created when individuals lose their non-contributory benefits upon joining the labour market as waged workers. This implies the universality of certain benefits must be ensured, while other benefits are adjusted according to income or to the duration of employment. Another recommendation emerging from the 2011 report of the advisory group on the Social Protection Floor emphasizes that social protection systems should also be gender aware. Strong gender divisions of work within the household can prevent women s participation in the labour market. If joining the labour market entails replacing certain tasks, like caring for children or dependants, and if this responsibility for care continues to disproportionately fall on families and on women, the level of compensation for 3

4 women should therefore consider covering for the cost of replacing this type of care service. If the wages available to women are not a fair exchange for the care they usually provide, it is highly improbable they will join the labour market. It is not surprising, then, that labour participation rates for women with small children tend to be quite low in the region. In order to reduce and redistribute care related expenses it would help to implement conciliatory policies such as improving access to nurseries or care services, enacting legislation on maternity or paternity leave and benefits, and ensuring that working mothers can breast feed. viii These policies will facilitate the more equitable participation of women in the labour market and guarantee their rights and those of their families. Moreover, a properly constructed SPF can facilitate access to care benefits as well as reduce the costs of entering the labour market, particularly if these benefits are universal. Finally, an integrated SPF that is well designed can facilitate the participation of vulnerable groups, such as youth, the long-term unemployed, and the disabled. The incorporation of active labour market policies, such as training and labour market intermediation services, in combination with incentives to recruit and retain these workers can help these groups with their transition to decent work. A key role for international cooperation in the promotion of the SPF The Report of the Advisory Group, Social Protection Floor: for a fair and inclusive globalization, recommends an intensification of South-South, triangular and North-South cooperation in order to strengthen social protection, particularly in low-income countries. Specifically, it encourages regional organizations, such as the Organization of American States, to promote knowledge sharing and support for the implementation of SPF. In response, the GS/OAS and the ILO have partnered in order to use the Inter-American Social Protection Network as a knowledge and learning tool to advance the social protection floor initiative in the Americas. International Labour Organisation General Secretariat of the OAS Regional Office for Latin America and the Caribbean Executive Secretariat for Integral Development Las Flores 275 San Isidro F St NW Apartado postal Washington DC Lima, Peru socialprotection@oas.org oit@oit.org.pe i Summit of the Americas (2009), Declaration of Commitment of Port of Spain, paragraphs 9 & 15. 4

5 ii ILO (2011) Promoting policy coherence for decent work and full, productive employment, A policy note for the G20 Meeting of Labour and Employment Ministers, Paris, September iii ILO (2010) The Social Protection Floor Initiative, ILO/WHO, Geneva, June iv ILO (2012) 2Social protection floors for social justice and a fair globalization, International Labour Conference, 101st Session, 2012, ILO, Geneva. v In particular, Convention 102. Social Security Minimum Standards Convention, Convention 102 is the flagship of all ILO social security Conventions, as it is the only international instrument, based on basic social security principles, that establishes worldwide-agreed minimum standards for all nine branches of social security which include medical care; sickness benefit; unemployment benefit; old-age benefit; employment injury benefit; family benefit; maternity benefit; invalidity benefit; and survivors' benefit. vi ILO. (2011) Social Protection Floor for a Fair and Inclusive Globalization, Report of the Advisory Group chaired by Michelle Bachelet convened by the ILO in collaboration with the Who, Geneva. Pp 10 and 97. vii ILO (2001) op cit. viii In line with commitments in the various Conventions on the Protection of Maternity, Convention 3 (1919) and 103 (1952) and 183 (2000). 5

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