Why We Need A Reinvigorated Social Contract

Guy Ryder, Director General, ILO
People are asking fundamental questions about the legitimacy and relevance of institutions and systems. The cause, I believe, is a lack of social justice. There is a sense that the rules of the game have become skewed against ordinary people and the formula of education and dedication no longer brings just rewards. Data shows us that these fears are not just subjective. Economic benefits and the labour market are out of sync and for many wage growth has not kept pace with economic or productivity improvements. Rewards are not trickling down as they should. And many people don’t have regular wages at all. More than two billion people work in the informal economy, where contracts, benefits and rights are compromised. We might associate informal work with developing countries but it is now an everyday part of some of our richest societies.  The rise of the ‘gig’ economy, facilitated by new technology, could lead to even more informal work.

This is not the kind of world I want, in the present let alone the future. We need to pro-actively re-engineer our systems and mould these trends to create a future of work that is stable and equitable. The ILO is already deeply engaged in these issues. Two years ago I instigated an independent, high-level Global Commission on the Future of Work. Its report is already generating vigorous global debate, which will culminate in a high-level session at the Centenary International Labour Conference, in Geneva in June. From a personal perspective, I would like to highlight a few points. Currently, 55 per cent of the global population – four billion people – have no social protection at all. Without a social protection floor they are more likely to fall into working poverty and less likely to invest in- education for their children, retraining for themselves, starting businesses. The whole economy will suffer as a result.

We are not powerless against this situation. Some of the same technology that the ‘gig’ economy uses to allocate and record work can also be used for social benefits. Labour laws can be updated to cover new kinds of work. Cross-border co-operation on tax and regulation can ensure bricks-and-mortar employers are not unfairly undercut by their virtual competitors.

We can embrace the opportunities of a greener future. The ILO estimates that, with a supported, just, transition, 18 million decent jobs could be created by a shift to more sustainable economic practices. We can prepare for demographic changes by making it easier for those who are marginalized or restricted – women, youth, the elderly and differently abled, minority and indigenous groups – to participate in the workforce fully and equally.

A pre-requisite for all this must be real social dialogue. If governments, workers and employers engage this creates the foundations for a renewed social contract that addresses current concerns and paves the way for a future of work that is more equitable.