background paper "Future of Work" Speech of Nanditah Shah, Womens Research Center, Bombay, on Future of WorkGERMANWATCH Symposium 1997: Social Sustainability:
Particularly in times of high unemployment, massive changes in the manner of living (the rise of individualism and the pluralisation of lifestyles), and rising immigration raise questions for social welfare systems. Existing social welfare systems function only partially, due to the imbalanced burden they create upon different social sectors. The fact that economic growth and jobs no longer go together is indisputable. This has created grave doubts in the currently practised system of the social market economy, especially its' model of competitiveness. The solution to the employment problem lies in the conjuncture of job markets and social systems. Social welfare systems stand in negative relation to the demand for jobs. The interplay of social welfare systems, the job market, the constraints of financial politics and corporate investment activities within the framework of globalisation are fundaments of the present crisis.
The social market economy and the existing social system are burdened by the steadily rising costs of social welfare systems, and this tendency will increase due to cost splitting strategies. A decreasing economically active population must support an increasing number of retired persons. The continuing stagnation and the ageing population has caused the financing of social welfare programs to reach its limits. A vicious circle begins: high unemployment necessitates higher social Security contributions which in turn raise the burden of said contributions, thus reducing employment chances and raises the incentive to join the illegal economy.
In the fifties and sixties it was expected that social welfare systems would be needed less as prosperity rose. But the opposite was the case: Costs for social welfare systems were out of proportion in relation to salary developments. The proportion paid by the state was also raised - the welfare state was born. In order to finance deficits, contribution rates were raised or the conditions under which rates must be paid were lowered. Increasingly, social Security systems reach their limits. Furthermore, they carry a negative incentive for the job market. The financing of the social welfare system through social Security contributions causing a discrepancy between wage costs for the employer and the employee's net salary, acting as an art tax on labour and thus reducing the demand for labour. The length and amount of unemployment paid defines a minimum wage for "non-labourers". This social guarantee becomes the rate by which wages for the lower income groups are set. The higher the income for not working, the higher the standard wage for low salaried workers, the higher unemployment becomes, the less the unemployed are considered during salary negotiations
As the state finances social Security systems for its' citizens through taxes and contributions, it has an (indirect) influence on the location choice of businesses and corporations and thereby on the securing of jobs. What role should the state, or a community of states, play, in regard to the social welfare of its citizens? With globalisation calling for political decisions in favour of exterior economic liberalisation and interior deregulation, are state interventions necessary to insure social welfare for the sick, old, and unemployed - to redistribute wealth in favour of the socially weak and to regulate the marginalising effects of market mechanisms? The race for location in the throes of globalisation undermines the social and ecological basis of individual countries. A state which has given up its financial resources in order to attract businesses, is no longer able to provide for its citizens elementary needs.
Long term necessities have been neglected for short term needs and ensured continuance of the status quo for decades. In the overburdening of the social welfare system we see the consequences of this neglect. in Germany, the cost of the social welfare system was 127.8 Billion DM in 1997, a third of the gross national product. This is 27% higher than the EEC-mean, and is almost twice as much as in the USA and Japan. 70% of east German income is paid by the state. The second highest expense in the 1997 Household was payments for the national debt - 86 Billion DM. Expenditures for necessities such as transportation, education, research, science, youth and family services and Development put together don't reach this figure. Rather than a qualitative reorganisation of the welfare state, there's been a quantitative "downsizing" - e.g. the firing of civil servants. the state is scrimping at all corners at the cost of the future. Today's "dieting" separates those who are already "in" from those who are "out". Thus the next generation, to whom the future should belong, is being denied career chances and participation in a safeguarded society. In 1993 three times more was spent on care of the elderly than on the family. Provision for old age has become a public responsibility, whilst upbringing and education is increasingly privatised. Turning children into a poverty risk is everything other than farsighted. Already today, 30% of the workforce works under precarious conditions in regard to labour rights and social insurance. The coupling of social insurance and gainful employment practised until now proves to be a major weakness of the social welfare system in times of mass unemployment. New work forms divorce themselves more and more from Business companies and thus from the social Security system. In Germany alone, there are already 750.000 employees who work independently on paper only.
The goal of most recent approaches to political reforms in short term financial relief, especially for the national budget - often in turn burdening local authority distracts and national insurance companies. While budgets for employment offices are cut, the costs for welfare aid (financed by local authorities) due to unemployment explode. The number of people on welfare has more than doubled in the past ten years, the costs more than quadrupled. The burden of social welfare costs on local communities leads to a loss of solidarity with the needy. On the other hand, welfare aid is flexible because its granted individually, not structurally, making it adaptable in times of growing social insecurity. Social politics are simultaneously labour politics as long as the social welfare system is coupled with the workplace. Everyone talks of flexibility, it must be particularly supported in the workmarket and soziopolitically ensured. We must find ways of turning human passivity into activities that support a sustainable future. Examples show that this can relieve the load on the public wallet in the long run. Furthermore, worksharing is not only a moral, but also a structural challenge.
These facts raise questions about the social and moral culture of our society. Rethinking policy and creating real alternatives are a soziopolitical necessity. We must make decisions to go new ways. Nevertheless we cannot deny that we enjoy a high level of political stability despite mass unemployment - partly as a result of our comparatively good social safety net. But the welfare state's most precious asset, solidarity with the needy, is seemingly in danger. What does solidarity mean exactly in this context? How do we see the developing loss of solidarity due to systematic conflicts of interest within our society, and how can we counter this trend? Does our society not need a radical change of values, a process of radical rethinking, in order to support a show of solidarity within local communities as well as internationally. The marked physical and social mobility in our society becomes a central position in this question. This mobility is principally responsible for the dissolving of traditional support systems. The social welfare of migrants from differing cultural backgrounds is an additional factor at the centre of this discussion. Is it possible for these groups to hold on their traditional support systems in the north, or must we find and further new systems in order to assist a better integration of marginalised groups? What meanings do support systems have in the areas of work, living situation, recreation as well as family and friends? How can we strengthen these, which roles do they play, what potential do they have which can be built upon?
Particularly in southern countries, globalisation goes hand in hand with growing inequality, poverty, unemployment and growing destruction of and instability in family and social structures. The weakest groups are marginalised even further. The nations usually play a marginal role in this process, as state social welfare systems rarely exist. Even where they do exist, a large percentage the population in the metropolitan centres of the south make a living through informal or illegal work, providing them with no access to these benefits. This lack of safety net is connected to negative effects in most areas of human Development: salary, education, nourishment, health and access to resources. The continuity of traditional support systems in the rural regions of these countries is endangered by economically necessitated migration and the flight to the metropolitan centres. The (mostly) younger generations hope to find work and higher incomes in the city, a wish which most always remains unfulfilled. What they do find is an almost total lack of support in case of unemployment or illness. The aged remain in the rural areas, and their care is no longer secured to do the lack of state support and the departure of the younger generation. In many cases however, traditional support systems such as the extended family remain over great distances, despite the migration of one part of the family to the cities. Often a chain migration occurs - whole families follow individual members to the metropolitan centres, where they ground their own communities.
The maxims of export oriented economies and free trade undermine economic systems better conformed to existing social safety nets such as subsistence economies. Of course it's important to differentiate between different southern countries when discussing these topics. We need only to refer to the outsider role of Africa and her almost complete divorce from the World market to see that this is so. The increasing shift of production- and company location from north to south creates some new workplaces, however it also leads to a structural growth of inequality. Lack of state welfare systems in southern countries are an incentive for foreign investors and incite the exploitation of local labour. Employers prefer location where the salary level is extremely low and there are no regulations concerning social insurance for their workers. We must set limits to this exploitation.
What alternative support systems and self help organisations have the people of the south created and in which sectors can international solidarity from the north be strengthened or built up? This is an especially important question when the building of unions is partially or completely prohibited by the state. Which support systems/communities play a central role in the south and in the north? Here it's important to take into account the discrepancy between urban and rural environments, especially in the southern countries.
The building of self-organised support systems and all forms of making an ensured living independent of the (welfare) state must be given high priority. Community support systems can greatly help us become more aware of the communal side of human nature and translate this into not only participatory but also creative activities based upon working together and learning from one another. This would have positive effects on many social problem areas, in the north as well as in the south.
The following topics, divided into North and south, shall be discussed at the symposium:
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