We held another OECD Forum virtual event, “A New Societal Contract for the Recovery”, on Monday, 14 December as part of a series of events to mark the 60th anniversary of the OECD.
This event has ended and registration has now closed. But don't worry—you can watch the replay below and join the Forum Network to be kept up-to-date on all our upcoming events!
Ryan Heath, Senior Editor, Politico (moderator)
Jean Accius, Senior Vice President of Global Thought Leadership, AARP
John Damonti, President, Bristol Myers Squibb Foundation; President, BMS Patient Assistance Foundation
James Manyika, Senior Partner, McKinsey & Company; Chairman, MGI
Annemarie Muntz, Managing Director Global Public Affairs, Randstad N.V.
Frances O'Grady, General Secretary, TUC
Stefano Scarpetta, Director, Employment, Labour and Social Affairs, OECD
The financial crisis in 2008 was a shock to the system. We had missed or ignored the warning signs and this was the supposed wake-up call that we needed to address the sharp rise in inequalities in our societies and to re-think outdated mantras about economic growth and trickledown economics. While the 2008 crisis did spark change, including at the OECD, which has transformed in the last decade, the legacies have lived on.
The reality is that our societies have since become even more divided. The trust bonds, which are the very lynchpin of a well-functioning society, have been seriously damaged, leaving us vulnerable to various political upheavals since 2016.
The accelerating pace of digitalisation has further fanned the flames. We are seeing big shifts in the world of work brought about by increasing automation and the burgeoning “gig” economy, in some cases challenging the notion of what "having a job" means, and blurring the lines between employer and employee.
Many have seen their life prospects – and those of their children – radically affected. Costs for housing, healthcare, and education are absorbing an ever-larger proportion of incomes, while wages have stagnated since the financial crisis. Young people between 15 and 30 years old have less access to well-paid, stable employment, affordable housing, and decent savings, compared to previous generations. While women have made strides in the labour market, they continue to lag behind men in terms of employment, wages, savings, and overall wealth. Similarly, the wealth gap experienced by minorities is both persistent and growing.
These shifts point to an evolution in the “social contract”: the arrangements and expectations, often implicit that govern the exchanges between individuals and institutions. Broadly, people have had to assume greater responsibility to ensure access to education, health care and to sufficient funds as they age. These changes have led to uncertainty, precocity, pessimism, a general loss of trust in institutions, and even attraction to more extreme political views.
COVID-19 now comes on top of these challenges. Millions have lost their jobs, and many more have fallen into inactivity. Young people, minorities and women have been particularly affected. This is devastating on an individual level but also has broader societal and economic impacts, affecting social cohesion, access to opportunity, labour market participation, productivity and, down the line, the growth potential of our economies.
But it has also been an important wake-up call. Many countries have taken unprecedented measures to extend social safety nets, especially for vulnerable groups such as low-income households, children and young people, women, low-skilled workers, part-time or temporary workers, and the self-employed. Countries with well-developed social protection systems have been able to provide a degree of income security for many, through paid sick-leave schemes, unemployment insurance, and short-time work schemes. Nevertheless, even in these countries, many workers in non-standard forms of work have found themselves without adequate levels of social protection.
The situation is worse in countries with large informal economies and less developed welfare systems. Lack of coverage for most workers in the informal economy is one reason that 55% of the world’s population, or more than 4 billion people, is not or is only partially covered by social protection.
But countries across the globe have introduced a raft of emergency policies and cash transfers to support people through the crisis. Even poorer countries in situations of fragility and conflict have been able to flex and increase coverage. However, we need to take it a step further. As we work towards a recovery that is more resilient, inclusive and sustainable, we must patch the gaps in the safety net, while ensuring sustainable financing.
Also on the Forum Network: Rethinking the Economy post-COVID: Time for a Revolutionary Reset by Anne-Birgitte Albrectsen, CEO, Plan International
Other societal actors have also taken on unexpected levels of responsibility to help ensure that people could continue to have access to jobs, education, finance and the healthcare that was urgently needed. This has been powerfully illustrated as hotels rooms were provided for the homeless, medicine for those that could no longer afford it, food parcels appeared on doorsteps, people checked in on their vulnerable and lonely neighbours, and communities came together.
A crisis like COVID-19 can focus our energy; unite us to advance the common good; generate cooperative partnerships among diverse stakeholders; and accelerate the transformative power of innovation to address urgent human needs.
We have seen all these creative forces at work in the global response to COVID-19. Although the crisis has not yet passed, it is not too early to start identifying some of the lessons we have learned so we are better prepared for the future, to defeat new public health threats, as well as rising challenges that are already on our doorstep.
These lessons should guide public policy reforms, align business practices and provide us a roadmap for decades to come.
How can we ensure that the lessons we are learning about the importance of addressing the vulnerabilities of our societies – referred to as a “broken social contract” –now really do generate significant and lasting change, making us more resilient to face up better to future challenges, but also less divided, with more trust in our governments and each other? How do we co-operate and co-create our future to make this work, and ensure that we each take on our role to renew the societal contract?
Some have been saying this is not an opportunity we can afford to waste. The need for resilience in our systems, from health care and global supply chains to environmental quality, and the need to build the post COVID 19 world in an inclusive and sustainable manner, will be overarching OECD priorities for the future.
|Tackling COVID-19||New Societal Contract||International Co-operation|
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