A New Social Contract can rebuild our workplaces and economies after COVID-19
Our world is in crisis with many faces of devastation: the devastation of inequality, climate devastation with extreme weather events and changing seasons, and now the devastation of a pandemic with no known end date.
Immediate protection for workers, families, communities and real economy businesses with guarantees for paid sick leave, for wages protection and for public health and other areas of vital care for all are essential as the first step to stabilising the fallout from the pandemic.
After the early 20th century turmoil of two world wars and the Great Depression, world leaders understood that it was important to build a social floor of democratic rights and freedoms and systems of social protection. This was a social contract with the world’s people.
The ILO was established in 1919 with a tripartite governing structure where workers, employers and governance negotiated fundamental rights such as freedom of association and collective bargaining rights and the right to be free of discrimination and free of forced labour and child labour. These were followed by other standards including occupational health and safety, minimum wages and over the years a body of standards to ensure decent work. And a supervisory system to hold governments to account was developed.
Every struggle for better working lives or social protection or education, health, childcare or other public services at national level added to the social contract.
And these guarantees along with negotiated or statutory wage commitments that came with a job offer — in other words, a contract of employment — became the basis of economies and societies protecting workers from economic, political and environmental shocks.
The social contract was understood by all parties as the foundation of a stable society, but as the world became richer and the rise of the global corporations began to dominate our economies, the attacks on the social contract escalated.
Labour arbitrage became the basis of profit growth with offshoring production to maximise low wages and reduce employment responsibilities underpinning both global trade and competition. Globalisation massively increased global wealth, but it was not equally shared. Labour income share has steadily declined since the 1980s.
And the denial of fundamental labour rights has been allowed by governments putting corporate interests above the dignity of decent work and the livelihoods of their people.
Those same governments have failed to build systems of universal social protection, leaving no safety net in times of crisis for more than 70% of the world’s people.
The promise of development has been further constrained by the illicit flows of income and tax evasion suffered by poorer countries that have watched their natural resources and the talents of their people appropriated by wealthy Western corporations.
But sadly, the financial crisis of the 2008–09 taught us little as stimulus spending designed initially to protect jobs, people and the real economy morphed into bailouts for banks and financial institutions while austerity measures attacked minimum wages, collective bargaining and social protection.
These attacks tore through the last threads of the social contract, which has been under increasing attack since the 1980s.
Today the health and economic impact of the COVID-19 pandemic has put a spotlight on employment relationships which are deficient of paid sick leave, guaranteed hours of work or even a contract of work.
Freelancers, gig economy workers and hidden workers in global supply chains — all strangled by the lockdowns required to contain the spread of the coronavirus — are the people feeling the first shockwaves of this crisis.
As many governments scramble to pay for sick leave, provide income support or other measures, they have found themselves putting in place the building blocks of a social contract. Let’s keep these in place.
A new social contract is vital to set the world back on a sustainable and just path. The terms of this contract must include a labour protection floor for all workers with:
- fundamental rights;
- adequate minimum wage;
- maximum working hours; and
- health and safety.
Through legislative guarantee or collective bargaining, paid sick leave, carer’s leave and other entitlements should be guaranteed.
And universal social protection, including income protection for periods of underemployment, is a societal guarantee for working families and the foundations of a more equal society and a secure economy.
Just Transition measures for climate action and technological changes, and a transformative agenda for women’s economic participation, can ensure we leave no one behind.
Taxation must be fair and redistributed to social justice measures including vital public services in health, education and other sectors of care and opportunity.
The post-pandemic world could give us a new model for the global economy, a new commitment to sharing the world’s wealth and a renewed investment in compliance and the rule of law.
Out of the health and economic devastation of COVID-19, let’s rebuild with a new or renewed social contract.