Social problems

Social protection scheme around the world in covid-19 and actions for uncertain future

Globally, social protection is not agreed on one definition and clear on its coverage, while the common type of protections includes: old-age income protection AKA pensions, unemployment support, health-care protection, and other schemes that include maternity protection and employment injury (WHO, 2010). Regrading to WHO, they reported that only about 20 percent of the global working-age population and their families have access to some range of social protections. During the time of Covid-19, social protections are brought to the front-line while undergoing an unprecedented trial.

In the early stage of Covid-19, 45 countries have launched social protection programmes in response to Covid-19 in March 2020, later increasing to 84 countries, with a total of 283 programs currently in place, 21 of which programs are unemployment benefits (Ugo Gentilini, Mohamed Almenfi and Ian Orton, 2020). Even before some countries began their social protection schemes, job loss is already a common scenario worldwide no matter it’s a poor or rich country. Losing a job in a pandemic is scrying without knowing what could happen afterward, enough saving could help but it is uncertain for how long it could sustain. Moreover, it is more frightening when there’s only one earner to feed the family, and in the long run, it will become a matter of social stability. Up to date, the International Labour Organization expected 195 million job losses worldwide due to the Covid-19. So how many of them are eligible for the unemployment benefits and how much support they can receive and to what extent?

OECD unemployment rate falls to 7.4% in August 2020 but remains 2.2 percentage points above February 2020

According to the Investopedia that the world’s highest unemployment rates at the end of 2019 were in Sub-Saharan Africa and occupied Palestine: Lesotho: 28.2%; Eswatini: 26.5%; South Africa: 28.5%; Occupied Palestinian Territories: 26.4%; Mozambique: 24.8%, and the lowerest are: Qatar: 0.1%; Cambodia: 0.3%; Belarus: 0.5%; Lao People’s Democratic Republic: 0.7% and Myanmar: 0.8%. It is interesting to note that the lowerest unemployment rate does not represent a strong economy because some of the economies rely heavily on subsistence farming, which is labor-intensive but seasonal. Except for Qatar, the country is driven by oil and natural gas. More or less, the world is suffering from unemployment and the economic downturn. So how does the current government social protection scheme can help? Below I will list some countries around the world and give you a glimpse into the unemployment situation and the related policy in Covid-19.

CountryUnemployment rateUnemployment benefits or related in Covid-19CoverageVirus case
Lesotho28.2%1.2 billion for emergency assistance and expanding social protection.N/A6,371
South Africa28.5%Issued Unemployment Insurance Fund (UIF) and workers with an income below a certain threshold received a small tax subsidy for four months.N/A1,346,936
Niger7.8% (2017)Approved a supplementary budget with 1.3 percent of GDP toward health, security and social assistance.N/A4,204
Egypt9.8% (2018)Initiative for irregular workers in most severely hit sectors, which will entail EGP 500 in monthly grants for 3 months.1.6 million157,275
Brazil11.9%Employment support (partial compensation to workers which are temporarily suspended or have a cut in working hours, as well as temporary tax breaks).1 million 8,488,099
Argentina9.8%Totaling about 6.0 percent of GDP, 3.9 percent in the budget and 2 percent off-budget on various protection.N/A1,799,243
Peru3.0%The government authorized withdrawals of up to S/2,000 from private pension fund accounts by members who had not contributed for six consecutive months or employees on furlough in April under emergency decrees.N/A1,064,909
Mexico3.5%Provid subsidized  unemployment insurance for 3 months to workers that hold a mortgage with the Housing Institute (5.9 billion pesos).N/A1,641,428
USA3.7%Signed a US $ 877bn (about 4½ percent of GDP) funding bill which includes enhanced unemployment benefits of US $ 300 weekly federal enhancement in benefits; Using $44 billion from the Disaster Relief Fund to provide extra unemployment benefits; US $ 268 billion to expand unemployment benefits.N/A23,556,676
Canada5.7%Around $249 billion (11.6 percent of GDP) in direct aid to employment insurance and others.N/A708,619
Austraila5.2%The stimulus includes the multiyear JobMaker program(A$73 billion) and overall stimulus includes other announced JobKeeperwage subsidies(4.6 percent of GDP).N/A28,721
Sweden6.8%Guarantees amount to SEK 803 billion (16.0 percent of 2019 GDP depending on uptake.N/A523,486
U.K3.7%£8 billion on social security and others, also subsidy for self-employed and paying the minimum wage for 25 hours per week for six month for young worlers of unemployment.N/A3,433,498
France8.4%Public guarantees of €327 billion (close to 15 percent of GDP), including €315 billion in guarantees for bank loans and credit reinsurance schemes.N/A2,866,665
Italy10.0%Measures to preserve jobs and support income of laid-off workers and self-employed (Aroud €22.3 billion).N/A2,390,102
Turkey13.7%Issued a short-term work scheme (0.4 percent of GDP), and a nationwide ban on employee layoffs is in force until January 2021.N/A1,578,625
Ukraine8.2%UAH 10.7 billion has been disbursed to fund unemployment and furlough benefits as of the end of 2020.N/A1,167,655
Israel3.8%Supports the social safety net (NIS 20bn), funding a relaxation in the requirements for unemployment benefits and grants for self-employed workers.N/A550,465
Iran11.1%Support to the unemployment insurance fund (0.3 percent of GDP).N/A1,336,217
Afghan11.2% (2017)Social package, including the now concluded bread distribution program of Af 2.8 billion and the World Bank-supported social distribution program in the amount of Af 20.8 billion. 1.5 million54,141
India5.3% (2018)Wage support and employment provision to low-wage workers (0.5 percent of GDP).N/A10,581,837
Russia4.5%Standard unemployment benefit to equal the minimum wage for five months; the minimum unemployment benefit to be tripled until end-August; and eligibility to be extended by 3 months.N/A3,612,800
Kazakhstan4.8%KZT 1.8 trillion is allocated to support employment under an “Employment Roadmap” program.N/A215,947
China5.2%An estimated RMB 4.8 trillion (or 4.7 percent of GDP) of discretionary fiscal measures have been announced for all.N/A99,026
Thailand0.7%At least 9.6 percent of GDP or THB 1.5 trillion approved for all effected party.N/A12,594
Singapore3.1%Amount of about $100 billion issued for all and The support of up to $700 per month for three months in2021 will be provided to individuals who lost jobs.N/A59,127
Qatar0.1% (2018)The fiscal support package for all is expected to reach QR2.1billion (0.4 percent of GDP) in 2020. N/A147,504
Philippines2.2%PHP 205 billion cash aid program (1.1 percent of 2019 GDP) for low-income households and almost PHP 57 billion social protection measures for vulnerable workers (0.3 percent of 2019 GDP).More than 18 million502,736
South Korea3.7%Employment support (1.5 trillion), support for low income households (0.4 trillion).N/A73,115
Japan2.4%Protect employment and businesses (15.8 percent of 2019 GDP) and later expaned the work subsidies.N/A334,328
New zealand4.1%Announced income relief payments to support people who lost their jobs (NZ$0.6 billion or 0.2 percent of GDP).N/A1,906
Hong Kong3.0%Employment subsidy scheme (HK$80 billion or 2.9 percent of GDP) and temporary job creation (HK$6 billion or 0.2 percent of GDP).N/A9,721

In total, about 5.7% of the total workers have access to unemployment insurance during this pandemic across those countries. Based on the analysis, cash aid is the direct method of supporting the unemployed, while simple, flexible incentives for the employer to keep its employees seems to be the best way to prevent mass unemployment according to Jonathan Rothwell.

So we wondering that is there a better way to prevent such mass disaster in the next round (and I wish the next round will never come)? From the government side, it needs to build a more resilient system to overcome such situations that it is not only acted upon timely but also allocates resources strategically. First, the government should be open and transparent to build trust with its own people, so that people can cooperate with the government and achieve the maximum impact. Monetary and non-monetary support is necessary to reach the needy people and businesses so that resources are aligned with the needs. On the other hand, industry, business and company should build their ability to adapt to changes quickly and the employee should alter their attitudes toward employment and also have a sense of self-protection in terms of losing jobs.

Ideal advice could sum up above, but what if we could set up a ‘Universal Fund’ for emergencies worldwide, each country would contribute their certain amount of GDP based on their economy, and the citizens of any country could apply for the subsidy according to the state of emergency. Does this ‘Universal Fund’ feel more like WHO or UN? Yes, but both of them are not inclusive enough for all countries on the earth because of certain politics. In a nutshell, this pandemic has hit so many places in our human history and it will never recover easily, so we should be prepared and alert in the future.

This article was edited by the original author without their consent, and should not be reproduced.

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