Even before COVID-19, inequality levels were increasing and social mobility was decreasing, as people in the poorer segment of the population had fewer resources to invest in health and education. Inequality levels are expected to increase, but factors of social exclusion may change due to COVID-19. In a situation of enduring pandemic (as of 15 September, a second wave of infection was breaking out), uncertainty makes it difficult for unique scenarios to be built. However, all reasonable scenarios predict that GDP will lag below the baseline trends drawn in 2019. This gap GDP is crucial in understanding what will happen in the post-pandemic economy. In terms of unemployment, as far as OECD countries are concerned, the improvements achieved since the last financial crisis were undone in the first half of 2020. The percentage of workers in the private sector experiencing shorter working-time schedules is 35-55%. The overall effect on workers is 10 times worse than the 2008 crisis. Numbers that have never been seen in the modern era. There are also shortfalls relating to the effectiveness of social protection systems. The forms of employment contracts are important. In addition, workers in the low-income segment of the labour market are exposed to excessive risks. Self-employed workers and workers with non-standard working contracts have been disproportionally affected by the crisis. They amount to 40% of workers in the worst-hit sectors. They suffer from limited access to unemployment benefit or illness compensation. Low-paid workers are also more penalised (this is also according to Van der Hoeven, topic 6) by the effects of the pandemic. Persistent wage moderation – that also affected European workers when employment was steadily on the rise – may remain in place after the crisis. 3 As an area of vulnerability, particular mention must be made of young people and women: young people because governments are accumulating delays that may lead to structural unemployment; and women due to their family responsibilities and because sectors with more female workers than average are being hit particularly hard by the crisis. Today we need to redesign social protection schemes to eradicate shortcomings, make minimum wage schemes more reactive to shocks and enable vulnerable workers to obtain benefits from traditional social protection systems. The European Pillar of Social Rights promotes 20 principles that can drastically reduce inequalities if correctly implemented. We must address the “pandemic economy” and turn our attention to the short-term and medium-term challenges. In the short term, we must ensure H&S at work to all workers, including those in SMEs. It is also necessary to introduce flexible protection and training schemes for people who lose their job (with a more accurate SURE or its successor). In the longer term, a light must be shed on adequate minimum wages and widespread collective bargaining in order to revise labour market conditions, make labour contracts more stable and protect low-paid and vulnerable workers better. In order to avert major disruption on the labour market, short working time schemes (and the like) are very important to safeguard the income of wage-earners and to help companies bridge the moment – but they also have to be simple in nature and accessible to and usable by SMEs. It is important to extend lump sums to people who do not benefit from traditional social protection systems, including during the recovery phase, such as the self-employed and those with non-standard working contracts. One priority is to invest in the Youth Guarantees and activation measures targeted at young workers. As for women, it is necessary not only to open child-care facilities and close the pay gap but also to promote flexibility in working time arrangements and endeavour to eradicate the glass ceiling effect.
As the second wave of the pandemic makes itself felt, inequalities may deepen. An Action Plan for the European Pillar of Social Rights is needed to ensure widespread well-being among workers and their families. We must protect the more exposed groups such as the self-employed, people with non-standard contracts, people with low-paid jobs, young workers and women. In the medium term, all relevant actors must coordinate a response which maps out social risks and rethinks social protection schemes, introduces dynamism in wage progressions, reinforces collective bargaining, invests in work-life balance and eradicates glass ceilings. As a result, we must increase the share of income received bythe bottom 40% of workers on the pay scale.
Director for Employment, Labour and Social Affairs
Mr. Scarpetta joined the OECD in 1991 and held several positions in the Economics Department and in his current Directorate. He led several large-scale research projects, including: “Implementing the OECD Jobs Strategy”; the “Sources of Economic Growth in OECD Countries”; and contributed to others including “The Policy Challenges of Population Ageing” and “The Effects of Product Market Competition on Productivity and Labour Market Outcomes”. From 2002 to 2006 he worked at the World Bank, where he took over the responsibility of labour market advisor and lead economist. In this capacity, he coordinated a Bank-wide research program of Employment and Development and contributed extensively to the Bank’s investment climate assessments. He returned to the Economics Department of the OECD in November 2006 where he became the head of the Country Studies Division in charge of Japan, Korea, China, India, Mexico, Portugal, Denmark and Sweden. From March 2008 to June 2010, he was the editor of the OECD Employment Outlook and the Head of the Employment Analysis and Policy Division of the Directorate of Employment, Labour and Social Affairs (DELSA). He became the Deputy Director of DELSA in June 2010 and in May 2013 he became Director.
Head of Unit
European Commission – DG Employment
Katia Berti is Head of Unit on the Employment and Social Aspects of the European Semester at the European Commission, Directorate-General for Employment, Social Affairs and Inclusion. Before that, she worked on EMU deepening and the macroeconomy of the Euro Area and on fiscal sustainability issues in the Directorate General for Economic and Financial Affairs. She has a PhD in international economics from the University of Nottingham and completed postgraduate studies at Universitat Pompeu Fabra and the College of Europe.
Lead Economist, Social Protection and Jobs- Co-director WDR
Federica is Director of the World Development Report 2019. Prior to this position, she was a Manager in the Development Economics Global Indicators Group. In that role, she was responsible for developing global programs with a focus on policies and regulations across a number of thematic areas, including agriculture and agribusiness, skills, information and communication technology, public procurement and PPPs. Under her intellectual leadership, nine World Bank global reports have been published since 2014, including the Enabling the Business of Agriculture (2015, 2016, and 2017), Benchmarking Public procurement (2015, 2016, and 2017) and Procuring Infrastructure PPPs (2015, 2017, and 2018). She has published in peer-reviewed journals, including studies on firm productivity, global value chains, and the impact of regulation on growth and competition. She has also contributed to a number of World Bank reports, including the Environment for Women’s Entrepreneurship in the Middle East and North Africa Region; Golden Growth: Restoring the Luster of the European Economic Model; the Jobs Study – Assessing Private Sector Contributions to Job Creation and Poverty Reduction; and the Turkey Investment Climate Assessment: from Crisis to Private Sector Led Growth. She holds a PhD in Economics and a Laurea in Political Science from the University of Rome, la Sapienza.
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