Shocks are inevitable from disease, climate, resource depletion and political unrest---it’ll snowball into societal collapse unless fiscal levers are expanded to provide a backstop.

The COVID-19 pandemic has exposed the vulnerability of those who are inadequately covered by social protection in more and less developed countries alike, and has exacerbated the fragility of a social contract that was already under strain in many countries. A weak social contract in the context of an exceptional crisis poses a very real risk to social cohesion. Nevertheless, many States have reasserted themselves as the guarantor of rights by protecting public health and incomes. By sustaining these measures, economic recovery will be supported which will help minimize risks that may weaken social cohesion. However, this is a fast-moving, inherently unstable and protracted crisis. Social protection stands at a critical juncture. Decisive policy action will be required to strengthen social protection systems, including floors, as one of the cornerstones of a reinvigorated social contract.

Introduction

After the last global catastrophe – the 2008 financial crisis – the international community unanimously reaffirmed the human right to social security by adopting the International Labour Organization’s (ILO) Social Protection Floors Recommendation, 2012 (No. 202). In doing so, countries pledged to guarantee at least a basic level of social security, including access to health care and income security over the life cycle for all, as part of their national social protection systems, and to progressively ensure higher levels of social protection.

As the COVID-19 crisis makes clear, not nearly enough progress has been made with regard to this pledge. Quite the contrary, many countries entered the COVID-19 crisis with an eroded social contract (ILO, 2016b). Over the past three decades, global trends have witnessed persistent and deep poverty and growing levels of inequality and income insecurity that have destabilized trust in public institutions and weakened social cohesion. Understood as a multidimensional concept, social cohesion encompasses both distributional concerns (such as poverty; as well as class, gender and racial inequalities) as well as participation and representation (Babajanian, 2012).

Yet, though this has meant that many countries were ill-prepared to face a health, economic and social crisis of such an unparalleled scale, there has nonetheless been unprecedented government action, including social protection measures, that have aimed to protect individuals’ health and incomes against its negative consequences, while contributing to stabilizing the economy and employment (ILO, 2020a). The COVID-19 pandemic has served as a wake-up call, alerting the global community to the urgency of accelerating progress in building social protection systems, in particular social protection floors to guarantee at least a basic level of social security to all (ILO, forthcoming (d)). This is true to not only tackle the adverse social and economic consequences of the COVID-19 pandemic, but also to repair the fragile social contract, tackle the rise of poverty, inequality and economic insecurity, restore public trust in States, and prepare societies for future crises, most urgently the risks posed by climate change, natural resource depletion and environmental degradation.

<<TEXT CONDENSED, NONE OMITTED>>

A fragile social contract even before the crisis Rising levels of inequality have undermined the social contract The COVID-19 pandemic has put into stark relief the pre-crisis challenge of adapting an already fragile social contract to a changing world. The forces reconfiguring the global context are manifold, comprising globalization of trade and finance, the financialization of the economy, technological changes and new forms of work, pervasive informality and poor working conditions, and the privatization of public services. These forces, together with less income tax progressivity and the relative shifting of the tax burden from capital to labour, framed by a context of often fragmented social protection measures and weak labour market institutions, have contributed to rising levels of inequality, stagnating real wages and income insecurity (Berg, 2015; Global Commission on the Future of Work, 2019; ILO, 2016b). Economic gains have been disproportionately captured by the richest: for example, between 1980 and 2016, the richest 1 per cent of the global population captured around 27 per cent of income growth, while the share for the bottom 50 per cent was around 12 per cent (Alvaredo et al., 2017, p. 13). Furthermore, the share of global income earned by workers vis-à-vis the share gained by capital has declined, while disparities in workers’ earnings have also widened (ILO, 2019c). More than 60 per cent of the employed population work in the informal economy, most of them under difficult conditions and without social protection (ILO, 2018b). The promise of upward social mobility and equal opportunities has not been realized for a generation of youth who can no longer expect to enjoy higher living standards than their parents or find decent work. Gender inequality persists in households, labour markets and with regard to care work (ILO, 2018a and 2019a) and, on average, women enjoy less social protection coverage than men. In addition, deep inequalities shape access to quality health care, high-quality education and technologies, as well as resilience to unforeseen shocks (UNDP, 2019). Social protection’s capacity to contain and reduce inequality and poverty in diverse countries has been critical for fulfilling and renewing the social contract For Member countries of the Organisation for Economic Co-operation and Development (OECD), taxes and in particular social transfers reduce market inequality by approximately one quarter on average, although their equalizing effect varies widely across countries (OECD, 2015 and 2018). Historically, countries with a strong political focus on egalitarian social policies and comprehensive, universalistic and “decommodifying” social protection have tended to enjoy lower income inequality and higher social cohesion than others (Esping-Andersen, 1989; Green and Janmaat, 2011). Evidence indicates that there is much less income inequality in countries with high social expenditure than in countries with lower levels of social expenditure, and that the combined effects of taxes and transfers are critical in reaching a more equitable income distribution (Cantillon, 2009; ILO, 2014; UNDP, 2019). A rigorous review of 165 studies on the impact of non-contributory cash transfer programmes in low- and middle-income countries on a variety of outcomes showed that these transfers contribute to reduced poverty indicators; with overall positive effects on health, education and labour market outcomes (Bastagli et al., 2019). Studies also show that individual programmes can have a significant impact on reducing inequality. Brazil’s Bolsa Família transfer and other programmes under Brasil sem Miseria were responsible for 13 per cent of the decline in inequality in Brazil between 2001 and 2011 (OECD, 2013). In addition to these distributional aspects, social protection can have positive effects on social relations, reinforce relationships of trust and reciprocity, and promote voice, accountability and gender equality (Babajanian, 2012). While a “social turn” in the 1990s exhibited a renewed interest in social protection in the global South, it has not been sufficient to build a strong social contract Crises, regardless of causation, have sometimes triggered progressive social change. The creation of welfare states in Europe after the Second World War is a prominent example. This was an unprecedented leap forward for social protection, which contributed to social cohesion during the “golden years” of welfare capitalism (Esping-Andersen, 1989). However, with the emergence of the so-called high neoliberalism of the 1980s and 1990s and a suite of policies advanced by the “Washington Consensus”, many countries, with a few exceptions, drifted towards the privatization and liberalization of social policy in the late 1990s in the wake of structural adjustment policies (UNRISD, 2016). By the end of the twentieth century, concerns about poverty and to some extent inequality became more pronounced, and resulted in a further “social turn”, and a shift in ideas and policies. This turn reasserted the need to counteract the rationale of neoliberal and trickledown economics and its consequences and introduce policies that addressed the structural determinants of poverty and inequality (UNRISD, 2016). However, this shift was not accompanied by a commensurate transformation of macroeconomic and social policy. Instead, social policy was often palliative. It neglected to address structural and systemic hurdles and deficiencies linked to chronic underdevelopment and pervasive poverty. Instead of building universal and comprehensive social protection systems, many developing countries pursued limited “safety nets”. Typically, these have relied on conditional cash transfer (CCTs) programmes and other narrowly targeted cash transfers and public works programmes. CCTs have been critiqued for deepening social tensions, as behavioural conditions may place an additional burden on recipient households. Conditionality can be particularly onerous for women who are already time-pressed, and CCTs in the worst case reinforce traditional gender roles (Bastagli et al., 2019; Cookson, 2018; Fultz and Francis, 2013). Moreover, the deleterious impact on social cohesion of the narrow poverty targeting synonymous with “safety nets” is well documented (Brown et al., 2018; Kidd and Wylde, 2011). This provides strong evidence for more inclusive and universal social protection (ILO, 2017; ODI and UNICEF, 2020). Social cohesion may be at risk if social protection benefits fail to reach poor individuals, if those who receive benefits may be stigmatized and if eligibility conditions are not clear enough for people to understand why they do or do not receive benefits (Mkandawire, 2005). Policies of austerity since the 2008 global financial crisis have undermined the efficacy of the social turn leaving many countries ill-prepared for the COVID-19 pandemic Periodic financial and economic crises in recent decades have hampered social contracts (World Commission on the Social Dimension of Globalization, 2004). While crises can be transformative, the outcomes of recent crises are mixed in terms of progressive policy shifts. For example, the 1997 East Asian financial crisis ushered in significant positive transformations in the social protection systems of the affected countries, most notably in the Republic of Korea (Woo-Cumings, 2007). However, while the political underpinnings of policy change conducive to social reform – contestation, social mobilization and coalition politics – are energized in the context of crises, the nature of demands and the responsiveness of elites can vary considerably, rendering the outcome far from pre-determined (Utting et al., 2012). The policy response to the 2008 global financial crisis is a case in point. Some countries, such as China and Viet Nam, invested significantly in fortifying their social protection systems, which arguably boosted their resilience and enabled them to cope better with the current pandemic. However, many countries, after an initial short-lived period of fiscal expansion in 2008–09, adopted austerity policies, and approximately a quarter of developing countries reduced expenditures to below pre-crisis levels (Ortiz et al., 2015). This flies in the face of countries’ voiced political commitment to universal social protection, such as the adoption of ILO Recommendation No. 202 in 2012, and the recent UN Political Declaration on Universal Health Coverage (23 September 2019). These expressions of intent have not yet translated into solidarity-based financial commitments. Previous pandemic responses are also instructive: while some ushered profound reductions in inequality, these were often fleeting and the gains not sustained (Scheidel, 2018). Thus, there are reasons to presume that the COVID-19 pandemic responses may not be different. The developments outlined in this section reflect a profoundly changed relationship between States, markets and citizens. They have challenged a shared understanding of how power, opportunities, and resources should be distributed to achieve social justice, as well as a common understanding of which principles should guide economic and social arrangements to this end. The failure to distribute the gains of development equitably is dividing societies, and fuelling resentment and distrust. These developments have also undermined trust in public institutions – already eroded by the 2008 financial crisis (OECD, 2020a) – and, ultimately, act to weaken social cohesion. The ensuing social tensions and insecurities have provided fertile ground for the rise of exclusionary, xenophobic and misogynistic groups that are threatening democratic values and institutions (United Nations, 2019). The effects of the COVID-19 pandemic may further compound these pre-existing challenges, and do so in ways yet to be fully understood. The COVID-19 pandemic and its socioeconomic fallout The COVID-19 pandemic represents a major public health challenge generating serious economic and social impacts that are likely to persist for some time. It is the first time in modern economic history that governments have deliberately imposed restriction on economic activity to protect people’s health. This is explained in part by the exceptional nature of the crisis and because many national health systems were not prepared for a pandemic. By August 2020, over 24 million people had contracted COVID-19 and over 844,000 people had died as a result (WHO, 2020). Beyond those immediately affected, COVID-19 has resulted in full or partial lockdown measures affecting almost 2.7 billion workers – around 81 per cent of the world’s workforce – in early April 2020 (ILO, 2020c). The repercussions on the economy and employment have been significant. The International Monetary Fund (IMF) projected a sharp contraction of the global economy by 4.9 per cent in 2020 and estimated that global gross domestic product would be 6.5 percentage points lower in 2021 than in the pre-COVID-19 projections (IMF, 2020b). According to the latest global estimates, employment declined significantly, as measured by a 14 per cent decline in working hours for the second quarter of 2020 relative to the last quarter of 2019 (equivalent to 400 million full-time jobs) (ILO, 2020a). Furthermore, in 2020 alone, up to 100 million people may be pushed into extreme poverty, measured as living below $1.90 per day in 2011 PPP (World Bank, 2020), thereby reversing progress towards the Sustainable Development Goals. The World Food Programme has warned that heightened food insecurity will affect millions of more people in low- and middle-income countries, resulting in significantly increased morbidity (WFP, 2020). The effects of the pandemic have been highly uneven, reinforcing existing inequalities and social cleavages. Those who are better off are more likely to have secure employment and savings to draw on, access to social protection and health coverage, and are better able to quarantine themselves while continuing to work remotely (Oxfam, 2020; United Nations, 2020a). Evidence from previous crises suggests that these led to higher levels of income inequality as measured by the Gini coefficient, or larger income shares at the top of the distribution (Furceri et al., 2020). In Latin America, the most unequal continent, the Gini index is expected to increase as a result of the pandemic by between 1.1 and 7.8 per cent in several countries in the region (United Nations, 2020c). Furthermore, the limited progress achieved in gender equality over past decades is at risk of reversal. Seventy per cent of workers in the health and social work sector are women and in the absence of adequate occupational safety and health (OSH) management systems, including protective equipment, they face an elevated risk of infection, in many countries without access to paid sick leave (ILO, 2020d). Women also tend to work disproportionally in sectors that are severely affected by the crisis, such as domestic work, retail and cleaning, and face a significant risk of losing their jobs and incomes as a result of the lockdown and often lack effective social protection coverage (ILO, 2020a). In addition, the closure of childcare services, schools and long-term care homes has particularly adversely affected women, having shifted a greater share of the provision of care for young children and frail elderly persons onto families. Finally, confinement has seen emerging evidence of increased intimate partner violence and sexual abuse directed against women and girls (UN Women, 2020). COVID-19 also exposed major systemic weaknesses in the quality of long-term care provision. COVID-19 lockdowns and a prevailing environment of uncertainty have combined with existing social injustices to stimulate significant protests worldwide, including protests in Chile against lockdown-food shortages, high unemployment, and costly social services, and demonstrations in Ecuador against IMF-supported austerity cuts (Ortiz et al., 2020). Most indicators of the outlook for social peace look poised to deteriorate as a consequence of the pandemic, and some observers predict that Europe may experience an increase in political instability, possibly including riots and general strikes (Institute for Economics and Peace, 2020). Against the backdrop of an already fragile social contract, the next section examines how social protection has supported social cohesion, by helping to mitigate the adverse social and economic consequences of COVID-19. Shoring up the social contract: Social protection responses to COVID-19 Social protection systems have been an indispensable part of a coordinated policy response to the global pandemic and profound recessionary crisis. Many States have intervened decisively to ensure that people can effectively access health care, without creating additional hardship, while supporting job and income security for those most affected. 1 To protect lives and contain the spread of the virus, States have suspended economic activity, necessarily accepting the possibility of an economic recession of unprecedented magnitude. In the span of only a few months, many countries have enacted fiscal stimulus and social policy responses on a scale rarely seen. These policy responses, their unevenness across countries and shortcomings notwithstanding, have saved many lives and been critical for maintaining public confidence and social cohesion. Preliminary estimates suggest that in the absence of policy interventions, COVID-19 would have resulted in 7 billion infections and 40 million deaths globally in 2020 (Walker et al., 2020). It is reasonable to assume that without State action, mortality rates would have been much higher, health services may have been unable to cope, and social unrest and anomie would have been even greater. The lack of preparedness of many health systems worldwide has been a heated subject of debate, often owing to major under-investment. In response to the exceptional scale of this crisis, countries have put in place extraordinary fiscal responses, and in the G20 countries, at least, far greater than in 2008/9. Fiscal stimulus packages in G20 countries were equivalent, on average, to 4.5 per cent of GDP as of 17 April 2020, compared to 1.4 per cent of GDP in the 2008 financial crisis (Battersby et al., 2020; ILO and IILS, 2011). The social protection and employment policy response has also been significant. Countries that had comprehensive and adequate social protection systems for all in place prior to the crisis could quickly mobilize the needed support, and scale up and adapt operations. This was especially visible in the areas of sickness benefits, unemployment protection, benefits for families and older persons, as well as social assistance. In the absence of comprehensive measures, countries have sought to adopt emergency or ad-hoc measures. Between 1 February and 12 August 2020, nearly all countries and territories introduced – or announced their intention to do so – a combined total of 1,364 social protection measures to address the COVID-19 crisis (ILO, 2020k). These included a range of measures across different branches and for different population groups, drawing on a combination of resources from social insurance, the general government budget and other sources. The policy response has facilitated access to health care, protected jobs and mitigated income losses. Safeguarding and extending social health protection mechanisms during the crisis Many countries took measures to enhance effective access to health care, close gaps in social health protection and extend financial protection. This included channelling additional fiscal resources into the health system to enhance the availability, accessibility, acceptability and quality of health services for all (ILO, 2020d), for example in the Philippines and Thailand. To optimize institutional and staff capacity, Spain and the United Kingdom temporarily bolstered public provision by commandeering private health facilities and placing them under public regulation. In other countries, such as China, prevention, testing and treatment measures, including telemedicine, were integrated within healthcare benefit packages. Other measures have included enhancing financial protection against health-care expenses, safeguarding and extending coverage of existing social health protection mechanisms, and ensuring the universality and continuity of such coverage, such as guaranteeing treatment for foreign residents, as occurred in Thailand. Ensuring income security during sick leave through sickness benefits Sickness benefits allow workers to stay at home to recuperate until they recover – protecting their own health and, in the case of communicable diseases, the health of others (ILO, 2020g). Many countries also ensured the payment of sickness benefits in cases of quarantine or self-isolation, to help prevent the spread of the virus (Austria, France, Germany, United Kingdom, Viet Nam). Waiting periods for the payment of sickness benefits were eliminated in some countries (Australia, Canada, Portugal) and others waived the requirement to submit a sickness certificate (Austria, Japan). Many countries extended sickness benefits to workers who would not otherwise be entitled, financed from the general government budget (Germany, Ireland, Portugal, United Kingdom). One emerging challenge from COVID-19 is that symptoms may be chronic for some people (Rayner et al., 2020) and persist beyond the periods covered by sickness benefits. This underscores the importance of ensuring protection beyond the crisis period, with recourse even to long-term disability support for those most severely affected. Preventing job losses and providing unemployment protection to those who have lost their jobs Unemployment protection schemes have been used widely to cope with the devastating employment impact of the crisis (ILO, forthcoming (c)). This has included measures to support enterprises in retaining workers, with the accompanying aim of preventing unemployment, through employment retention benefits, such as short-time work benefits or partial unemployment benefits (Denmark, Dominican Republic, Germany, Italy, Japan, Malaysia, Netherlands and Thailand). Unemployment benefits have played an important role in ensuring income security for workers who have lost their jobs, in some cases this has also included self-employed workers (Australia, Ireland, Philippines). One-off emergency payments have been made to laid-off workers ineligible for unemployment insurance (Australia, Italy, Japan). Governments have also facilitated access to employment services, including job-matching, skills development and active labour market policies to support jobseekers in finding a new job (Hong Kong (China), Republic of Korea), including through online job counselling and job mediation (Belgium, Estonia and Malaysia) (ILO, 2020a and 2020f). Adapting public employment schemes Public employment programmes can act as functional equivalents of unemployment protection schemes by guaranteeing a minimum number of workdays and/or wages for equivalent days of work to support income security (ILO, 2017 and 2020i). Ethiopia amended its Productive Safety Net programme to allow participants to receive an advance three-month payment and at the same time waived work obligations for that period. Rwanda temporarily waived work requirements for participants in its main public work programme while continuing to pay the cash transfers, to respect physical distancing. The Philippines introduced a public employment programme that focuses on workers’ sanitizing and disinfecting their homes and the immediate vicinity. In addition, to mitigate the adverse impact of quarantine policy on certain workers, the programme has provided its 220,320 participants with the highest prevailing regional minimum wage for up to 10 days. Ensuring income security for old-age provision In view of the acute vulnerability of older persons to COVID-19, ensuring the continued adequacy as well as adjusting the delivery mechanisms of old-age benefits have been important policy responses. Some countries advanced the payment of old-age benefits (Argentina, Peru and Ukraine). This larger sum of money supported the satisfaction of urgent needs and reduced the upfront income shock. However, in order to prevent subsequent hardship, it may also be necessary to increase benefit levels to avoid a deferred income-security shock. Other measures have included ensuring effective access to health care and reducing the physical exposure of older persons when collecting benefit payments. To support the spatial distancing protocol and reduce older persons’ potential exposure to the virus, social pension recipients in Algeria were permitted to elect proxies to collect their entitlements. Providing income support and access to social services for persons with disabilities Many countries bolstered existing provisions for persons with disabilities. This was critical given the pre-existing barriers and inequalities that constrain persons with disabilities and which COVID-19 accentuates (ILO and IDA, 2019; OHCHR, 2020; UNPRPD, 2020). Countries provided income security by maintaining the adequacy of existing disability pensions (Argentina, Hong Kong (China), Peru, Singapore). Others introduced an emergency cash payment in addition to in-kind benefits and existing cash transfers (Bolivia and Egypt), temporarily increased benefit levels (Bahrain doubled the disability pension), and adapted access to social services including care and support for persons with disabilities (Australia, France). The United Kingdom suspended conditions and sanctions for a limited three-month period for the disability dimension of its main income support measure, Universal Credit. Some persons with disabilities also benefited from improved opportunities for telework and employment retention schemes. Providing family benefits and introducing exceptional family leave and care policies More than 100 countries have provided explicit support to address the socioeconomic impacts on children and their families. Key response measures have been universal child benefits and other child benefits, as well as utility cost waivers and food assistance. Mongolia and South Africa significantly increased the value of their main child benefit. Canada provided a one-off child bonus (CAD 300 (USD 225)) as did Germany (EUR 300 (USD 350)), both of which were paid in addition to their main child benefit. The conditionalities attached to family benefits were suspended in the Philippines and Guatemala. Uzbekistan temporarily extended the duration of eligibility for its social allowances for low-income families with children by an additional six months from June, by postponing the recertification process. With the closure of schools, universities and childcare services in more than 100 countries, impacting more than 800 million children and youth (UNESCO, 2020), family leave policies moved to the centre of attention (UNICEF, ILO and UN Women, 2020). Governments expanded special family leave to support working parents affected by school closures (France, Italy). They have also subsidized employers providing paid family leave (Japan) or provided cash transfers or vouchers for babysitting or other childcare services, especially for health-care workers (Italy, Poland, Portugal, Republic of Korea). Childcare facilities for the children of health-care workers (Austria, France, Netherlands) have been ensured, while those who provide long-term care for older family members, who are particularly vulnerable to COVID-19, have been supported (ILO, 2020k). Protecting workers in the informal economy by extending coverage Providing support to the 1.6 billion workers in the informal economy significantly affected by lockdown measures and/or working in the hardest-hit sectors has been challenging (ILO, 2020f). Policy-makers have had to pursue innovative policies to provide rapid support to affected workers in all forms of employment. Viet Nam’s crisis response included providing cash transfers to individuals who had lost their earnings but were ineligible for unemployment insurance, including categories of workers with typically high informality risks, such as street vendors and waste pickers. In addition, a cash transfer was provided to family businesses with tax declaration revenues of less than 100 million dong (USD 4,200) per year that suspended their activity. This measure should potentially reach both formal and informal workers in these small enterprises. Costa Rica introduced a new emergency benefit (Bono Proteger) that provided, for three months, a monthly benefit of 125,000 Costa Rican colones (CRC) (USD 220) to employees and independent workers (both formal and informal) who lost their jobs and livelihoods, and CRC 62,500 (USD 110) to those who were working reduced hours. Namibia’s Emergency Income Grant provided a one-off benefit of 750 Namibian dollars (USD 41) to support workers who had lost their jobs and did not benefit from any other grant. Brazil provided the possibility for those not yet registered in the national single social protection register to enrol through a website or phone application. This allowed access to a means-tested three-month emergency benefit for unemployed workers and micro-entrepreneurs (both formal and informal). Ecuador put in place a special COVID-19 “contingency benefit”, directed at both infected and otherwise affected workers in the informal economy and their families, to be distributed through the channels of existing social assistance programmes. Extending provision to migrants and the forcibly displaced Migrant workers face significant challenges in accessing social protection with respect to health care and income security in countries of origin, transit and destination. Consequently, the ILO has stressed that governments must give due consideration to the specific needs and acute challenges of migrants (ILO, 2020j) and the forcibly displaced (ILO, 2020b) in the context of COVID-19. Many migrant workers live in overcrowded environments, without access to basic sanitation and limited space to practice physical distancing and apply basic prevention measures. These conditions have increased the share of COVID-19 cases among the migrant population, as in the case of Singapore (Hah, 2020) – an example that illustrates how the vulnerability of one group heightens the vulnerability of all. Some countries have made efforts to extend health care and social protection benefits to migrants. Residence permits were extended for three additional months to ensure broad access to health care (France and Spain). Migrants were provided with medical services, including medical check-ups for COVID-19 and quarantine services, free of charge (Qatar). The status of non-nationals, including asylum-seekers with pending applications, were temporarily regularized giving them certain rights and support, including health care, social support, employment and housing (Portugal). Some countries extended existing or new benefits to those not yet covered, benefiting migrant workers. For example, Ireland’s new unemployment payment is paid to employees and self-employed workers for a maximum of 12 weeks, benefiting students, non-European Economic Area nationals and part-time workers aged 18–66 who have lost their employment due to the pandemic. Extending or introducing new social assistance benefits for vulnerable population groups In China, local governments were instructed to increase the benefit levels of their national social assistance scheme (Dibao) for either all beneficiaries or those who were infected, depending on the province. Indonesia increased the benefit amounts of its affordable food programme by one third for nine months. Ireland and the United Kingdom relaxed eligibility criteria to increase coverage of their main low-income support measures. Additional support for particularly vulnerable populations, such as homeless persons was provided in countries such as El Salvador, France and Spain. Cabo Verde extended for one month its poverty-targeted Social Income for Emergency Inclusion Programme (Rendimento Social de Inclusão Emergencial) from 4,500 households to an additional 2,788 extremely poor households with at least one child aged 15 or older, providing 5,500 Cabo Verde escudos (USD 54). The crisis has expedited much-needed reform in Spain (Alston, 2020), introducing a new Guaranteed Minimum Income (Ingreso Mínimo Vital) programme in May 2020 (Government of Spain, 2020). This marks an important extension of provision for 2.3 million people (Gómez, 2020) comprising low-income workers, the unemployed and other vulnerable groups. Where national social protection systems were inadequate, some humanitarian interventions attempted to fill urgent gaps during the COVID-19 crisis. Building government capacities to provide social protection to their populations is essential for long-term recovery strategies. For example, the Somalian Government launched the Baxnano programme to provide – for the first time – cash transfers to 1.3 million poor and vulnerable households. As part of the Government’s vision to move away from humanitarian interventions and provide social protection benefits, the programme is implemented by the Ministry of Labour and Social Affairs, in close collaboration with the World Food Programme and the United Nations Children’s Fund. Iraq also introduced a temporary monthly grant (USD 253) to support various groups that have been adversely affected by the nationwide curfew. Introducing social protection provisions can also be a means to signal the intention to commence and build elements of a social contract and support social cohesion. While several countries considered to be in conflict or fragile have introduced new measures, it is of concern that some highly fragile humanitarian settings such as the Central African Republic and Yemen still lack any COVID-19 social protection measures. Exceptional, society-wide generalized one-off universal payments and emergency universal basic income Universal one-off payments to whole populations were disbursed in Hong Kong (China), Serbia, Singapore and the United States to support aggregate demand and mitigate the economic shock. There has also been much debate on the need for an emergency-universal basic income. To date, only Tuvalu has implemented such a response (RNZ, 2020). Temporarily waiving the payment of social security contributions In order to alleviate the liquidity constraints that enterprises face, many governments have temporarily waived or suspended the payment of social security contributions and taxes, or taken other measures to allow greater flexibility in this regard (ILO, 2020e; OECD, 2020b). Measures taken, included allowing enterprises, and in some instances employees, to postpone the payment of social insurance contributions and taxes (China, France, Hungary, Thailand, Viet Nam). The loss of contribution revenues can represent a challenge for social insurance administrations in periods of increased demand for benefits and commensurate higher expenditure. Unless compensated by transfers from the general government budget in the short or medium term, there is a risk of a post-crisis increase in contribution rates or a reduction in benefits, or both. Can the crisis-induced social protection response repair the social contract? The COVID-19 pandemic has provided a strong push for more inclusive social protection in a situation where narrow targeting and tightly monitored conditionalities were not practicable and where it was necessary to urgently bridge coverage gaps, especially for informal workers. The scale and ubiquitous deployment of social protection as a response are unparalleled. This has helped to attenuate rises in poverty and income insecurity that otherwise would have put social cohesion under greater stress. However, the majority of social protection measures that governments have implemented are temporary, typically intended to last for three months (Gentilini et al., 2020b). This is of concern, given the continued propagation of the pandemic and the likelihood of a protracted crisis. If multiple waves of virus breakout occur and if further lockdowns are unavoidable, then it is conceivable that countries will have to prolong, extend, increase or introduce new benefits to protect their populations against health and income shocks.

<<PARAGRAPH BREAKS RESUME>>

From a bird’s eye view, arguably, COVID-19 has propelled social protection towards an important juncture. Will governments pursue a “high road” strategy that deepens the expansion and institutionalization of the temporary social protection measures they have adopted, while building participatory mechanisms for programme design and accountability, as part of a broader effort to promote decent work, human rights and social justice? Taking this road could build public trust in State institutions and reinvigorate the social contract. Alternatively, will countries pursue a “low road” strategy and limit their efforts to minimalist “safety nets” and stopgap measures, leaving large gaps in protection, shoehorned into macroeconomic policies that favour fiscal austerity at the expense of counter-cyclical measures needed to resuscitate decent work?

The COVID-19 crisis has exhibited tentative evidence that a high-road strategy is possible

The crisis has shown that States are capable of acting in the interest of all their citizens, and they can meaningfully fulfil their role as duty bearers. While civil society has mobilized extensively to practice mutual aid in many countries, the crisis has underscored the primacy and legitimacy of the State. Only the State could act decisively to protect health, income and jobs on the scale that has been required, and ensure macro-economic and social stability. Moreover, some States have acted with determination to assert their authority over practices of private enterprise and finance viewed to be not in the public interest, reaffirming norms underpinning the social contract. For example, Denmark barred companies operating in tax havens from access to employment retention benefits, and prohibited the use of its stimulus to fund the payment of dividends or share buybacks in 2020–21 (The Australia Institute, Nordic Policy Centre, 2020). In a similar spirit, the French government made a USD 11 billion bailout to Air France conditional on reducing domestic CO2 emissions by 50 per cent by 2024 (Jaeger, 2020). However, many countries have introduced stimulus measures that were not explicitly pro-social in conditioning how such support for enterprises should to be utilized.

The crisis has impelled a push for more universal approaches. The pandemic has clearly demonstrated that only universal access to health coverage can guarantee access to health care and effectively contain COVID-19. Those countries relying on individual schemes rather than solidarity-based generalized social health protection schemes have experienced tremendous difficulties coping with the crisis. Moreover, narrow targeting and problematic proxy-means tests in income-support programmes have shown to be clearly inappropriate in a context where large parts of the population are vulnerable and administrative capacity is constrained, even more so than in non-crisis times (Brown et al., 2018). The examples of modest temporary extension towards more universalistic provision during this crisis support this observation (i.e. as occurred in Cabo Verde and Uzbekistan). Conditionality, strongly advocated by some actors prior to the crisis, has had some of its critical shortcomings illustrated, and the widespread suspension of benefit conditionality during the crisis was a prudent policy approach. The income security of those covered by these programmes was maintained, but without the need to fulfil conditionality requirements that could risk exclusion, virus contraction or propagation to others.

There are also some signs that the crisis may have reinforced discursive shifts, already underway before the crisis, within the international financial institutions (IFIs) towards universal approaches to social protection. Emblematic of this shift is the World Bank’s engagement in the Global Partnership for Universal Social Protection to Achieve the Sustainable Development Goals (USP2030), its growing interest in universal basic income (UBI) (Gentilini et al., 2020c), and the IMF’s guidance on safeguarding social expenditure (IMF, 2019). The World Bank has spoken of the merits of “universal entitlements to health care and income support” and the need to reach the “missing middle” (Rutkowski, 2020), i.e. those not covered by social insurance or social assistance. The IMF has recognized the logic of universal responses, at least in the short term (IMF, 2020a). The extent to which the shift in rhetoric has any bearing on IFI operations on the ground – in particular, the macroeconomic policy advice accompanying loans offered to borrowing countries and the promotion of a limited “safety nets” approach – remains to be seen.

Observable also is a strengthened revalorisation of the important role of social protection, as well as of redistribution and social contracts more generally (Zamore and Phillips, 2020). Renewed public and political awareness of the importance of social protection emphasizes that adequate social protection and health care should be available to all, throughout their lives, in order to manage labour market and life-cycle risks as well as shocks, such as health pandemics. This should include workers in all forms of employment, including the self-employed and those in “new” forms of employment (ILO, forthcoming (a); Behrendt et al., 2019). In a similar fashion to the revalorisation of social protection, there have been positive perception shifts in the world of work too. A case in point is the recognition of “essential workers”, which includes a large percentage of women working in care services whose work is often under-valued and subject to a financial penalty, a “care penalty” (England and Folbre, 1999). The crisis has exposed “decent work” deficits, and underscored the need for essential workers to not only receive higher remuneration and social recognition, but also to enjoy better employment conditions and social protection. This would allow care workers to more fully lead dignified lives while helping to deliver essential services.

There has been growing interest in UBI as an emergency stability measure during the crisis (Cooke and De Wispelaere, 2020; ECLAC, 2020; Gray Molina and Ortiz-Juarez, 2020). These proposals indicate a desire for a remodelled social contract and for income security to be the bedrock of such a contract. However, there is uncertainty about the contribution of these proposals to building long-term comprehensive social protection systems. The principles embodied in the ILO Social Protection Floors Recommendation, 2012 (No. 202) provide a useful tool to evaluate their potential with regard to the adequacy of provision, equitable and sustainable financing, and policy processes (Ortiz et al., 2018) to ensure that they are anchored in human rights and international social security standards, rather than providing a “safety net”. These principles are also useful in providing a platform for the coordination of social policy sectors (health, social security, social care), which is indispensable for tackling multi-dimensional crises and ensuring social cohesion.

However, policy trend lines indicate a low-road exit is also possible

Evidence of a “low road” option unfolding is visible in the failure, to date, of calls for solidarity at the global level to translate into concrete action. Current financial pledges and actual commitments to lower-income countries are woefully inadequate. IFIs and development partners have announced various financial packages to help low- and lower-middle income countries tackle the socioeconomic fallout of the crisis, amounting to USD 1.3 trillion as of 1 June 2020. However, only a small share (USD 46.9 billion) of the total pledges has been effectively approved and allocated to support countries in the areas of social protection and health (ILO, forthcoming (b)).

Current COVID-19 responses are delicately balanced, and without a continuation of support for social protection expenditure and a prolongation of emergency measures, many countries face the possibility of a “cliff fall” scenario, whereby emergency social protection support ends prematurely and abruptly before the crisis is exited. This would leave many people highly vulnerable to a loss of income security, as well as creating negative effects for social cohesion and the social contract. For instance, the exceptional additional USD 600 a week emergency unemployment benefit provided in the United States (US), which provided vital income support to 25 million US citizens, ended on 31 July 2020 (Politi and Williams, 2020). After a period of delay and uncertainty, on 12 August, a presidential executive order (United States Department of Labor, 2020) enabled a new, albeit less generous measure, of an additional USD 400 a week payable to a smaller number of recipients. Overall, federal expenditure on unemployment benefits in August fell by nearly half compared to July (Politi, 2020).

More generally, ILO analysis indicates that social protection contraction measures have occurred already across a range of different countries irrespective of their income levels (ILO, 2020k). This trend resonates with the broader experience of previous crises, the first signs of recovery from which prompted calls for fiscal consolidation and, in some cases, austerity.

Policy considerations and recommendations to pave a high-road recovery strategy from the COVID-19 crisis

With the aim of promoting a human-centred recovery that contributes to social cohesion and inclusive growth, and which reinvigorates the social contract, the following policy observations and recommendations are proposed.

Accelerate progress towards universal social protection

A rights-based approach that is anchored in human rights and international social security standards, with the State as the guarantor of these rights, is essential to reinforce national social protection systems (ILO, 2020e; United Nations, 2020a and 2020b). The coordination of social protection policies with health and employment policies, including employment promotion and active labour market policies, should support and help sustain economic recovery. Inclusive social dialogue at the country level will be essential for informing policy decisions and resource allocation geared to extending social protection. The COVID-19 crisis has confirmed that the need for social protection is universal, reinforcing the call for universal social protection systems, including floors. The crisis has shown that accelerated effort is required in particular to extend social protection to those who are not yet or inadequately covered, including workers (and their dependants) in “non-standard” forms of employment, self-employment and “new” forms of employment (Behrendt et al., 2019; ILO, 2016a and 2019b; OECD and ILO, 2019). Enshrining programmes in national legislation can overcome the limitations of ad hoc and fragmented approaches, and ensure their sustainability and inclusiveness.

Ensuring the sustainable and equitable financing of social protection in times of crisis and beyond

It is imperative that countries sustain their social protection measures and levels of social spending when the immediate health crisis subsides, to ensure that people are protected against subsequent adverse economic and social consequences that may materialize. Equitable financing also implies that revenues must be raised in a progressive manner, to avoid, for example, increased value added taxes on basic consumption items, and by reducing possibilities for tax avoidance as well as preventing tax evasion. Furthermore, because crisis response measures have included the temporary suspension or reduction of social insurance contributions and taxes, appropriate measures will have to be taken to ensure the financial sustainability of social protection systems, while guaranteeing the adequacy of the benefits they provide.

Preparing for future crises

It is critical that social protection systems are well prepared to respond to crises, whether these relate to epidemics, economic shocks or climate change. This requires continuous investments in expanding the reach and adequacy of universal social protection systems.