Dealing with insecurity

Published : Nov 05, 2004 00:00 IST

THE International Labour Organisation (ILO) has brought out a report on the various social insecurities that characterise the current era. The report, "Economic Security for a Better World", goes beyond a mere identification of insecurities and deals with their probable causes. It is unique in that it places the question of economic insecurity at the centre of all other kinds of insecurities and suggests ways, some of them debatable, to tackle it. One idea that dominates the 450-page report is the role of the state as a nodal agent in providing basic security.

The introduction declares that it is not a conventional "report". Written by the ILO's Socio-Economic Security Programme, it collates material of the past four years and provides statistical data to corroborate the premise that in recent years, economic, social, political and technological developments have accentuated the insecurities experienced by people across the world. In recent decades, while ordinary workers and societies on the edge of the capitalist economy have been forced to bear the worst forms of insecurity, the rich have been relatively well-shielded. The 21st century is witnessing more and more groups being exposed to risk. In fact, the report posits that in some countries the elite may well have accepted formal political democracy in return for the preservation of a considerable extent of inequalities of income, wealth, status and power.

Basic security matters and real freedom cannot exist unless there is a certain level of economic security. There is hardly anything new in this assertion, but important is the fact that the report reaffirms the validity of an important principle of socio-economic analysis. Economic security is about income security coupled with sustainable voice representation security. (Voice representation is a mechanism to ensure that workers' views are expressed and heard by those in authority. It may take different forms, including trade unions.)

Economic security has to be valued as one of the several forms of security that make up society, along with security against civil or international conflict. In fact, the report acknowledges that economic insecurity contributes to such conflict, inducing, in turn, other insecurities. Economic security cannot be divorced from the notion of work; in fact, it is linked to a rich concept of work, says the report. Work, as defined in the report, goes beyond the narrow notion of labour associated with wages and a subordinate position in the productive system. It defines seven forms of desirable securities - those related to labour market, employment, job, work, skill reproduction, income and representation. (The report defines employment security as "protection against arbitrary dismissal". While job security is explained as "a niche designated as an occupation or [a] `career'", work security is "protection against accidents and illness at work through safety and health regulations".) Yet, above all these forms of desirable security, the report asserts, is basic security. It says: "Our fundamental position is that basic security underpins real freedom; basic security is desirable, it is feasible and should be equalised in the Good Society of the 21st century."

THE report takes a hard look at the Washington Consensus, comprising 11 key policy commitments. It notes that despite the unprecedented commitment made by world leaders to promote economic and social security, especially after the Second World War, the current orthodox model of growth presupposes that labour insecurity is a desirable, if not an essential, engine of economic growth. In the chapter, "The Liberalisation Context of Insecurity", the report states: "It seems that not only is social and economic security a barrier to growth, but also that there is no reason to believe it should be a major development goal at all. People are expected to adapt to a world of insecurity." The policy package of the Washington Consensus presupposes that national governments must exercise less "discretionary" power over policymaking and adapt themselves to the dictates of a global model promoted by the Washington-based international financial institutions. These institutions, says the report, are the midwives of globalisation and economic liberalisation. Providing a cross-country analyses of growth rates, the report suggests that in the era of globalisation, most countries have experienced lower growth.

Income security is weakened by high levels of income inequality. The report rejects the pessimistic claim of the privileged that one has to live with inequality. And inequality has been institutionalised with the gradual withdrawal of the state from the social sector. Income security is derived not only from a wide range of sources of income, but also from the ability to rely on support in times of need. It is evident that the latter has become almost negligible. The concept of labour citizenship, that is, the performance of labour entitled citizens to many social benefits and services, has gradually been whittled away. The report points out that the burden of costs has shifted from employers to workers. Means-tested social assistance, a scheme of targeting benefits to the poor on the basis of their "means", has replaced insurance benefits. In fact, in the process of targeting, the scheme leaves out many people who would otherwise be eligible for state support.

As income inequality grows, social policy is likely to be regressive. In the United States, for example, only 10 per cent of the work force expects "social security" to be the most important source of income in its post-retirement days. In Japan, as in several developing countries, many young people are opting out of the contributory pension scheme. The reality, the report says, is that in the early years of the 21st century powerful interests are pressuring governments all over the world to cut social spending, thereby reducing the income security provided by the state.

Health is one of the sectors in which public spending has been cut substantially. The absence of a universal health care system is probably the main source of insecurity in developing countries. Even in a developed country such as the U.S., over 42 million people lack health insurance and affordable health care. In a globalised world income insecurity has increased in affluent countries as well.

THE Security Surveys conducted by the ILO among 48,000 people found widespread support for redistribution of wealth, especially for fixing a ceiling on incomes. Unsurprisingly, the survey found that people living in rural areas and those who are economically insecure in various ways are more likely to be egalitarian in their outlook than those living in cities.

The report also has an economic security index, ranking countries according to their record in providing the seven forms of labour security identified in the report. The Scandinavian countries top the index, followed by the West European countries and the former Socialist countries such as Hungary, the Czech Republic and Slovakia. While the United States ranks 25th among the 90 countries listed, India ranks 74th.

Although the overall tenor of the report is positive, there are some problem areas. The report proceeds on the assumption that the future is going to be characterised by informal economic activities and flexible labour markets. It is within this framework that it considers the prospects to ensure adequate income.

The report criticises targeted welfare schemes wherein benefits and social services are made available only for groups identified by means tests and behavioural conditions. The report has contrasted such schemes with the Bolsa Familia programme in Brazil. As part of the programme women were given an income to encourage their children to go to school. As a result, the incidence of child labour came down and participation of women in the production process increased. Says Guy Standing, Director of the Socio-Economic Security Programme: "If people are given basic security, they become more productive." However, while the concept that income security should be construed as a right, rather than as an outcome of paternalism, makes sense, it should be noted that governments today are reluctant even to adhere to paternalistic notions of charity.

The concerns expressed in the report are genuine, stemming as they do from the ideological and structural changes that the world underwent in the 1980s and 1990s. While questioning the dominant ideology that makes insecurity almost desirable is correct, suggesting remedies within the same framework is not. However, the report is a step forward in that it accepts that economic insecurities cannot be allowed to go on.

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