The ‘Inequality Reduction Through Social Protection - Webinar in preparation of the UN Commission for Social Development’ webinar took place on 29 January 2019. The webinar aimed to introduce and discuss the UN Secretary General’s reports to the ECOSOC Commissions Commission for Social Development (CSocD) and the Commission on the Status of Women (CSW), entitled ‘Addressing inequalities and challenges to social inclusion through fiscal, wage and social protection policies’ and ‘Social protection systems, access to public services and sustainable infrastructure for gender equality and the empowerment of women and girls’.
The webinar was organised by the United Nations Department of Economic and Social Affairs (UNDESA), Finland’s National Institute for Health and Welfare, and the EU Social Protection Systems Programme. It was moderated by Timo Voipio (Chief Expert, THL-Finland, EU-SPS), who was joined by speakers Amson Sibanda (Chief, Social Policy Analysis Section, UNDESA), Dr. Shahra Ravazi (Chief of Research and Data, UN Women), and Stanfield Michelo (Consultant, TRANSFORM Zambia).
1. A gendered approach to inequality reduction: Informality, public services and resources
Shahra Ravazi kicked off the webinar by introducing the UN Women’s approach to inequality reduction, through a gendered lens. Women are at an elevated risk of extreme poverty compared to men, particularly during their reproductive years, and are more likely than men to be working informally. In the informal economy, women often occupy the least secure and lowest-paid positions. One of the factors that drives these labour-market disadvantages is that globally, women and girls shoulder about three quarters of unpaid care and domestic work.
The Commission on the Status of Women 2019 (CSW63) will highlight gender-responsive social protection, public services and sustainable infrastructure – one of the opportunities the event presents is addressing the synergies existing between these themes. Gender gaps an biases are noticeable: for instance, the global gender gap in access to old-age pensions is 11% between men and women.
Non-contributory social protection, such as universal social pensions, can play an important role in addressing these issues, closing these gender gaps. However, there are concerns that benefits are often too low, being insufficient to allow women and their families to be lifted out of poverty.
Gender-responsive public services also play an important role in reducing poverty and addressing gender gaps, such as public health services, education and care services. Larger investments in affordable child- and long-term care services can be very effective, having a positive effect on women’s employment options, closing the gender gap in the labour market.
Greater coordination is needed to avoid trade-offs and harness synergies between social protection transfers and public services and infrastructure. As important as social transfers are, on their own, they cannot achieve their transformative potential if designed in parallel to investments in public services and infrastructure. Investments in public services and sustainable infrastructure provide opportunities for advancing gender equality in employment, and care services, can be an engine for employment.
Finance has a critical role to play in enabling all these investments, as progress across the three areas will require a significant injection of resources, especially using progressive income and wealth taxes. Domestic resource mobilisation needs an enabling global financial architecture to combat illicit financial flows, tax evasion, and heavy debt burdens that rob developing countries of their resources.
2. Fiscal, wage and social protection policies
Amoson Sibanda then presented the main findings of the, ‘Addressing inequalities and challenges to social inclusion through fiscal, wage and social protection policies’ report, developed for the Commission for Social Development (CSoCD). During the 57th CSoCD in 2018, it was decided to highlight SDG Goal 10, to reduce inequality within and amongst countries, and specifically target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality.
- Global inequality
Income inequality is harmful to the pace and sustainability of growth, undermining the productivity and dynamism of the economy. Furthermore, high inequality diminishes intergenerational mobility, simultaneously reducing the impact of growth in poverty reduction, possibly leading to social tensions.
Global inequality levels remain very high despite sharp falls in the recent past. However, average within-country inequality has been rising in many regions of the world, increasing in almost all regions since the 1980s:
- The period from 1980 to 2016 saw the richest 1% of the world’s population capture 27% of income growth;
- The poorest 50% received only 12%;
- The wealth share of the world’s top 1% increased to 33% in 2016, from 28% in 1980.
Wealth and income concentration, coupled with the impacts of globalisation and rapid technological change, has led to economic anxiety, alienation, and decline in trust in governments and public institutions. Wage policies are fundamental in addressing inequality. However, for these to be effective, they should take into consideration the decent work agenda. Wages are key in recovering a country’s economy. Achieving equal pay for work of equal value is crucial to reduce inequality.
- Fiscal and wage policies
A critical element in discussions surrounding wage policies is the role of an established minimum wage, which positively impacts on the labour market, as more people are attracted to join the labour force, contributing to inequality reduction. Reducing the gender wage gap, which still stands at a staggering 20% globally, is also key in constructing effective wage policies.
Fiscal policies are powerful tools that governments can use to influence both the economy and social well-being. They can contribute to reducing inequality and foster social inclusion by being more consciously targeted towards:
- Restructuring economies to generate sufficient decent work;
- making systematic investment in high-quality human development;
- using equity and sustainability as guiding principles in choices to raise and spend public resources.
- Social protection
Social protection and achieving universal coverage are efficient policy accelerators in reducing inequality. Social protection policies provide an integrated cross-sectorial approach to unleash rapid progress by serving as a connector of economic, social and environmental development pillars.
Further, the establishment of social protection floors is an efficient approach to reduce vulnerability and strengthen resilience to natural disasters and other shocks, as well as combating poverty, inequality, and exclusion. Despite its capacity for impact, four billion people, of which 1.3 billion are children, live without any social protection.
Countries should enhance the role of fiscal policies concerning inequality of opportunities and outcomes and promote social inclusion by expanding and sustaining fiscal space, carefully assessing austerity-based fiscal consolidations. This can be achieved by:
- Raising revenues rather than cutting productive social expenditures, improving tax fairness;
- reducing the informal economy;
- increasing progressivity;
- rationalising exemptions; and
- implementing administrative reforms to stem tax evasion and illicit financial flows.
3. Zambia’s Social Cash Transfer Pilot
Stanfield Michelo made the final presentation, focusing specifically on the Zambian context, where poverty levels have shown little progress over the last 25 years. One of the greatest challenges the country faces is an elevated rate of inequality, scoring a Gini coefficient at 0.57, in comparison to the African continent’s 0.43.
The Kalomo Social Cash Transfer Pilot was the first Zambian experience with cash transfers, in 2003. The first targeting approach had as an entry point, the ultra-poor, which was then replaced with targeting Zambia’s bottom 10% through a community-based targeting. Currently, all Zambian districts are covered by the programme, which reaches around 556,000 beneficiaries.
To build stronger evidence for future policies, Zambia implemented a Child Grant Programme, constructed with more robust data than the Kalamo pilot. The programme provides unconditional cash transfers to households with a child under five years old, with monthly benefits of US$12. Its objectives were to supplement but not replace household income, increase the number of households having a second meal per day, increase the number of households owning assets, and increase school attendance amongst children.
An impact evaluation was conducted, evaluating 90 Community Welfare Assistance Committees (CWACs) in three districts, covering 2,500 households, half of which were under the treatment of the Child Grant, and the remaining under a control group. The programme had noticeable impacts on poverty, as seen in the graphs bellow, when comparing both groups in relation to the poverty line:
School attendance, which acts as a great equaliser in inequality reduction, went up 5.6% points among children between 11-14 years. There was also a positive impact on food consumption:
Domestic capacity development is fundamental for the sustainability of social protection systems. Training future social protection practitioners is key in establishing future policies, hence explaining the importance of educational programmes dedicated to social protection and social policy in local higher degree institutions, and initiatives such as TRANSFORM, a capacity-building initiative that offers trainings on national social protection floors to practitioners.