Friday, April 10
18:15 - 19:15
Participants are going to discuss transformations in labour relations and the relevant social protection system in post-pandemic reality.
Outbreaks and the wide spread of coronavirus, as well as the inability of intergovernmental and national bodies to curb the pandemic have produced a clear demand for social solidarity, demonstrating the inconsistency of individualism, egoism, hedonism, and the state’s role of service provider (country of services), that were helpless in the face of such major and dangerous challenge.
Amid robotization/digitalization, the coronavirus epidemic has hit the transforming labour market with dramatic force. This pressure is bound to significantly fuel massive transformation of labour area.
Will these settings blur the distinction between full-time, contract, and part-time jobs?
Will working remotely become a priority as pandemic-stricken companies have to set up remote work from home or on-line out of office and may turn it into routine practice tempted by significant reduction of costs (rent of office, maintenance and travel expenses, etc.) and scope of monitoring (internal workplace schedule, dress code, etc.)?
Some experts claim that the coronavirus crisis will force entrepreneurs to consider payment by results, rather than hours of work which resembles one-time contract and part-time jobs, rather than permanent employment.
Permanent employment is going to stay relevant as a tool to retain top-quality staff who will enjoy the privilege of having a permanent (secured) job. Other citizens will have to content themselves with contract work (for a specific project) or part-time employment.
Such concepts as work week or workday will become obsolete. It is eventually the end product that everyone cares – not the manufacturing process, time and location of production. Giving birth and upbringing children will no longer be an excuse to make a break in professional career as workers are able to smoothly combine these activities with work.
Cloud technologies, focus on the result instead of the process, and expansion of simple recruitment should make overstaffed back offices irrelevant. These transformations will end up in a one-third reduction of office staff in specific areas. Employers will prefer keeping permanent jobs for high performing staff.
Therefore, the issue is what to do with those who are not demanded. It is feasible that despite measures to prevent high unemployment, Russian economy will have to face this challenge.
It is the surplus of human workforce and social welfare burden, rather than lack of knowledge, skills or savviness, that leads to low demand of human workforce in the new post-epidemic labor market.
Experts believe that this phenomenon is very much alike the unemployment of workers across industries in the first half of the 20th century – the time when losing job was perceived as a social challenge that promoted a new public agreement between the state, businesses, and labour force.
Social protection might be eventually dominated by the well-known concept of guaranteed unconditional (universal) basic income.
Currently national social protection is based on mandatory social insurance; however, financial and legal mechanism, as well as the public solidarity model of insurance against social risks is efficient for labour markets where workforce employment prevails. There were long-standing attempts to artificially implement this mechanism to contracted jobs as well, thus neglecting numerous social discrepancies in terms of rights and obligations. For example, although subject to insurance, contracted workers are not eligible for temporary unemployment protection for the reason that a worker can independently decide when to complete the order. Part-time jobs do not fit within the social protection paradigm at all.
Considering that according to expert forecasts, the pandemic is going to fuel dismissals without offering prospects for reemployment, mandatory social insurance as the foundation of social protection will be substituted by unconditional basic income. However, mandatory social insurance won’t be entirely done away with; it will significantly shrink in scope in terms of the number of insured individuals (top quality experts), as well as types of insurance (if an individual works remotely, the sick leave is not needed; likewise, the employer is exempt of any responsibility in case of accidents at home or outdoors).
Therefore, the public agreement is bound to undergo transformations where it refers to social and labour issues. Today this unwritten agreement assumes that every individual has to work to feed their families and themselves, as well as to support (reproduce) their ability to perform their job that feeds them and sustains their livelihood.
When individuals are unable to work due to sickness or absence of work, it is either their employer who secures their income (with feasible efforts on behalf of individual workers) through mediation by the state (mandatory social insurance schemes) or the state that protects individuals directly through taxation (on-budget social protection). If individuals find it difficult to work or are overburdened with family commitments, or are dealing with challenging life circumstances, the state assists and sustains them through the on-budget social welfare schemes, among other tools.
In post-pandemic time these traditional pillars of social protection will require reconsideration and revision.
The paradigm of unconditional basic income suggests that individuals work in order to deal with an occupation that fits their own inclinations or interests and allows to avoid social degrading and idleness, rather than in order to earn a livelihood for themselves and their families. In case this occupation fails to ensure essential wellbeing for individuals and their family, such individuals are eligible for the unconditioned basic income paid by the government in the amount no less than specific social standard, regardless of individuals’ capability to work or difficult circumstances they are facing
Thus, the pandemic is not affecting the development of social insurance schemes, but rather promotes trends associated with digitalization/robotization.
Numerous businesses are pleading the government to reduce the so-called ‘fiscal burden’; to business community, this includes insurance premiums paid for mandatory social insurance, as well as taxes. In that case social protection incomes are bound to shrink, regardless of the scope of reduction and despite initial social protection deficit due to the lack of pre-crisis growth in payroll.
In turn, we will be compelled to reconsider formats, types, and financial mechanisms behind social protection. To formulate a new public agreement on national social protection jointly with state, civil institutions – trade unions and employer associations, first and foremost – have to decide (considering particular types of social protection) which social protection types and formats remain as they are and which have to be developed and implemented anew, as well as which resources to allocate to finance them most efficiently.
Participants will discuss what types of mandatory social protection shall reasonably stay unchanged.
It is believed that in this format there is every reason to develop social securities that aim to reimburse workers in case of lost job income or significantly diminished earning capacity (old age, disability, illness, pregnancy and childbirth, baby-sitting, loss of breadwinner). These types of social protection entail reimbursement, i.e. the amount to be paid to workers depends on the amount of payroll deductions for insurance coverage.
As for risks related to social emergency expenses (e.g. medical care, including medication, home care by caregivers, childbirth or death of a relative), there is every reason for the state to assume direct responsibility of these risks and finance them from the budget amid shrinking allocations for the mandatory social insurance.
Over the globe insurance medicine has been unable to pass the crash test of the coronavirus pandemic. Medical care system has failed dramatically as a provider of competitive commercial services. The battle with the virus and the danger of regular recurrence has demonstrated that centralized public healthcare is an only system to enable effective counteraction. Russian Federation has an extensive long-standing tradition of fostering such medical care system; some components of this system (e.g. the sanitary epidemiological services) have survived till present. More so, under the Russian Federation Constitution, medical care is provided free of charge, whereas most doctors in the country are employed by public healthcare hospitals – not private clinics. Most healthcare institutions are public or municipal. Public healthcare insurance is available to both working and non-working citizens; provided an individual does not belong to any insurance company, as is the latter case; then it is the domicile constituent of the Russian Federation that assumes responsibilities of the insurer. In such settings, it is reasonable to finance medical institutions directly from the budget, depending on the local or federal status of an institution; this shall largely simplify financial procedures and bring down irrelevant transaction costs (e.g. agency fees of medical insurance companies that can somewhat affect the quality of medical care). Medical care based on such insurance paradigm has natural limitations in terms of categories of individuals and the amount of reimbursement; these constraints do not exist in case of public funded health care. This is a critical advantage amid persistently recurrent pandemics and epidemics.
The participants will discuss exciting international experience (PRC) of a social digital ranking that allows to digitally monitor national livelihood of citizens and offers a framework to measure required incentives (support) and the scope of social protection or to restrict rights and freedoms of an individual citizen.
Social protection compels us to assume a predominantly proactive digital procedure to provide social welfare payments in cash (allowances, payments, reimbursement, monetary certificates), as well as digital oversight over the insurers and the insured; such should be the basis for stimulation (incentives) and destimulation (punishment) measures of the insurers and the insured to resolve legal disputes (online) (‘social digital lawyer’ service). Thus, an integral digital environment of trust is going to emerge that brings together policyholders, the insured, insurers, courts, and bailiffs.
Will the virus pandemic have temporary or long-term effects?
Will both processes impact transforming labor relations and thus initiate changes of the social protection system (demand for a new public agreement)?
How is it going to occur?
These are the most crucial issues to be considered by discussion participants.
Chief Financial Ombudsman
Chairman, Social Insurance Fund of the Russian Federation
* The Programme may be subject to change
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