As emerging countries continue to undergo complex, multidimensional transitions, the need to update how employment is governed becomes an increasingly pressing issue. The characteristics of the social contract, the vulnerabilities and opportunities that arise from informality, the new patterns of social protection and the adequacy of existing institutional frameworks are key questions that were explored at the conference organized by the French Development Agency (AFD) on April 3rd, 2019. Members of academia and of international organizations gathered to discuss what countries from the Global South can teach on how work, within all its forms and complexities, is to be conceived in the 21st century.
The welcome speech reminded of the challenges of new pressures on job access and quality
In the welcome speech, Thomas Melonio, Executive Director of AFD IRS Research Department, reminded the impact of demographic growth on unemployment and decent work, particularly for the youth, despite political advances that have been achieved in emerging countries. Although the policies to deal with this issue will vary across continents, education quality – in opposition to mere access – is likely to play a central role in building capacities and skills needed for the 40 million people who enter the job market each year. However, the issue of decent jobs, which encompasses the quality, sustainability, and rights associate with work, is also gaining increasing attention.
The first session tackled how a new social contract should look like in emerging countries.
The World Bank Federica Saliola first introduced some results from the World Development Report 2019, on the changing nature of work (i.e. less long-term and more short-term contracts found via online work platforms, but these contracts represent less than 3% of the global labor force). These transformations bring as many pressures (e.g. automation) as opportunities (e.g. innovation which creates new jobs). She also argues that “A new social contract needs to be centered and focused on expanding human capital and universal social protection”, as this allows for adaptative capacities to deal with changes in the market, and to provide equality of opportunity. Christina Behrendt, from the International Labor Organization (ILO), then addressed how to extend social protection to informal workers – an urgent matter, since 55% of the global population (4 billion people), mainly from the informal sector, does not have access to social protection at all, calling upon human-centered social protection systems. Kate Philip reflected on the historical approaches to the social contract and the role of the state in providing full employment.
The session on informality was aimed at understanding the complex patterns of informal employment and the vulnerabilities and opportunities that arise from such.
Alexandre Kolev, head of the Social Cohesion Unit at the OECD Development Centre, shared the results of the OECD and the ILO’s joint research on informality. He demystified the view that informality and development are causally related despite a correlation. In this complex relation, sector (e.g. services are linked to lower informality), labor surplus (affected by education and youth) and difficulty of doing business all play a key role. Although there is no straightforward relationship between informality and tax revenue neither, informality affects social protection, which in turns affects inclusive growth through micro, meso and macro level effects. Adopting a more country-centered view, Shanthi Nataraj from the RAND Corporation presented her study on employer-employee relations in the informal sector in Bangladesh. Reminding that the share of informal employment has not decreased despite rapid GDP growth, she presented informality as a continuum that neither monolithic nor black and white, and of which employees constantly transit into and out of. By conducting a survey for 2000 workers, she could shed light on the stated preferences of both employers (how to convince them to provide social protection to their workers?) and employees (how much monetary income are they willing to give up to achieve more benefits and/or protection?). Moving West, Francisca Pereyra from the Universidad Nacional de General Sarmiento analyzed the impact of national policies aimed at promoting the formalization of workers in Argentina, a representative case study for Latin America as a whole. The weight of informal domestic workers remains high as a result of employers’ advantages of hiring non-officially and of disparity between registering costs and social security contributions. However, the Argentinian experience suggests that a multidimensional approach to labor policy is needed, for instance by providing tax incentives for households who pay income taxes, by scaling up existing rights, by setting up a multi-actor social dialogue, and by running awareness campaigns. Indeed, registered domestic workers increased from 5% to 26% from 2004 to 2014, reflecting the modest but significant progress it has made in formalizing domestic work in recent years.
The last session addressed the innovative initiatives of work support and social protection in emerging countries.
Ileana Grandelis from the Food and Agriculture Organization of the United Nations (FAO) called for an increased attention to rural economy in the renewed social contract, since the majority of the extreme poor live in rural areas and more than 80% of the labor force in Sub-Saharan Africa works in the informal sector, of which 90% work in agriculture. The youth, as numerous today as they never were (1.8 billion), is also particularly at risk, albeit highly informal (99% in developing countries) and overrepresented among the poor (70% in Sub-Saharan Africa, for instance). Young people should be perceived as enablers in work transformation and active government efforts should be made to engage them in policy making, notably through the use of TICs and by acting in the demand side and in the connectivity of labor – not only supply, as many startups are attempting to do. Benjamin Lamberet (Angkor Research) shared his experience in the Cambodian garment sector. Although workers are highly formalized – factories are mostly foreign-owned and therefore significantly monitored by government, levels of non-compliance in other areas remain significant (discrimination, pregnancy, union membership, equipment, labelling of chemicals, medical services, etc.). The advance of labor-related human rights remains a priority for the Cambodian government, as reflected by its potential exclusion from the EU’s “Everything But Arms” deal which offers duty free access to its market. Finally, Fatoumata Hane (University Assane Seck de Ziguinchor) and Paul Bossyns (Enabel) both analyzed the structural limits of community-based health insurance in Senegal (the main pillar for health coverage – 80% of those who have health insurance) coupled with the government’s difficulty to finance extended health insurance. To address this situation, Enabel ran an experiment at the regional level of a Departmental Health Insurance Unit which increased health insurance coverage from 2.5% to a third of the population.
New forms of employment in the spotlight
By reflecting on emerging countries’ experiences, sharing the latest research on work, and furthering dialogue between academia and practitioners, the AFD’s conference is deeply entrenched in the contemporary recognition of the need to update traditional forms of employment. The demographic, institutional, and technological transitions which affect working patterns across the world are gaining attention, along with the challenges, but also the opportunities, that they bring.