Employment

Social security and the future world of work

The world of work is changing rapidly, with platform workers, non-standard contracts and self-employment becoming more and more common. This presents a challenge to social security systems to guarantee effective access to all branches of social security for all kinds of workers, without discrimination based on the type of contractual relationship.

The ISSA European Network discussed in depth these issues at a recent seminar held in Brussels. As Europe experiences a trend towards a wider variety of forms of work and with greater numbers of workers engaged in “atypical” work arrangements, policy-makers and social security administrations are looking into what this means not only for the protection of workers but for the financing of social security programmes. There is increasing urgency to address these new and emerging challenges. In most countries, self-employed and non-standard workers do not have the same degree of protection as workers with a conventional employer-employee relationship. This is especially so in the domains of unemployment, sickness and maternity benefits as well as for accident protection at the workplace.

The ISSA European Network seminar contributed to taking forward discussions on how social security systems should adapt to the evolving world of work. New ways of financing social security are being investigated by policy makers and experts, including taxation of machines or robots, increasing valued added tax, or introducing an “Eco tax”. Social security programmes and administrations are evolving. While responses must be country-specific, a common feature is for a holistic life-course approach, involving all branches of social security, as well as other sectors, such as the education and health systems.

The world of work is changing rapidly, with platform workers, non-standard contracts and self-employment becoming more and more common. This puts a challenge on social security systems to guarantee effective access to all branches of social security for all kinds of workers, without discriminating based on the type of contractual relationship. These issues were discussed in-depth within the ISSA European Network at a seminar in Brussels recently. As Europe experiences a trend towards a wider variety of forms of work, policy makers and social security administrations are looking into what this means and how to address new arising challenges.

On the one hand, a variety of employment and contract models can represent a positive opportunity for both employers and workers in terms of more flexibility, and for policy-makers it can mean more job creation and labour market integration. On the other hand, it can pose a challenge to social security schemes. In many countries, self-employed and non-standard workers are not offered the same protection as traditional employees, especially in the domain of unemployment, sickness or maternity benefits or for accident protection at the workplace. New ways of organizing work and production also represent a challenge for the sustainable and adequate financing of social security programmes. Income generated through online platforms may not be subject to contributions, the lower wages earned by many in non-standard work will elicit lower contributions and thus lower future benefits, the absence of employer contributions will heighten this challenge, and increasing automation and the development of robot technologies may lead to the replacement of some types of jobs, again reducing social security contributions.

Efforts are being made to see how social protection schemes can benefit all types of workers, and to suppress thresholds and barriers that prevent workers in precarious situations to adequately benefit from these very schemes. The European Union is active in addressing these issues. In April, the European Commission proposed measures encouraging EU countries to allow non-standard workers and the self-employed to adhere to social security schemes, build up and take up adequate social benefits, and facilitate the transfer of social security benefits between schemes. The proposal covers a broad range of social security benefits.

New ways of financing social security are also being investigated by policy makers and experts, including taxation of machines or robots, increasing valued added tax, or introducing an “Eco tax”. However, each one of these fiscal transfers poses new challenges that have to be considered carefully. Not least, they signal a reduced role for social insurance and a greater role for state financing. The EU has so far avoided the issue of taxing robots and technology, and has rather focused on driving forward innovation while ensuring a stronger focus on upskilling and reskilling of the workforce. The ILO recently published a research paper on the future of work and innovative approaches for social protection.

Some countries are piloting experimental projects. One policy option may be universal basic income (UBI). Paid unconditionally to all, this would help satisfy the human right to social security. The detail of the design of UBI is one key issue, not least how such a programme will operate alongside existing social security guarantees. The impact of labour market activity is another key issue. As a global first, a national pilot study is underway in Finland.

The seminar organized within the ISSA European Network, contributed to taking forward discussions on how to adapt social security in order to face this new world of work. Social security and its institutions will have to evolve, adapt to the variety of the forms of work, innovate and look for alternative solutions. The answer can only be holistic, involving all branches of social security, as well as other sectors, such as the education systems, and take into account cross-border and international realities.


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