How Should Society Respond to These Challenges?

How Should Society Respond to These Challenges?

DOI: 10.4018/978-1-5225-2179-2.ch008

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Smart Social Programs

Social safety net will remain important in mitigating risks for workers and lessening the effects of a widening distribution in incomes (Productivity Commission, 2016). When it comes to addressing the increasing level of job-insecurity and flexibility of contractual relationships between employer and employee there is a need for “Smart” Social Programs. Simply providing disadvantaged individuals with a monthly check does not usually help those people to get back on their feet and become self-supporting, rather, such handouts tend to create cycles of dependency, lethargy, and lack of self-respect as well as external respect (Marchant et al., 2014).

One model (Ford, 2009) proposes incentives that, if fulfilled, would have a positive effect on the income: the greater the response to the incentives, the greater the income the individual will receive. Such incentives might include participation in environmental stewardship, continuing education, child-care, art, music, volunteer work and other laudable activities. This proposal might eliminate the often-negative effects of having “idle hands,” low self-esteem associated with job loss, social stigma and lack of productive activities. Under this incentive model, the individual incomes received, while unequal, would not be unfair.

The Danish Flexicurity model ( benefits employer, employee, unemployed and the taxpayer by combining high unemployment benefits with low job protection and high participation rate (Viebrock & Clasen, 2009). The pros and cons of the Flexicurity model as evaluated post the global financial crisis by Andersen (2015) are found to be:


  • High rates of flows into and out of jobs enable firms to more readily adjust labour inputs to the business cycle and structural changes.

  • High job turnover rates make it easy for most unemployed workers to find jobs, implying that most unemployment spells are short.

  • In the wake of the global financial crisis, there has been no steep increase in long-term unemployment and no signs of increased structural unemployment.

  • It is easy for youth to enter the labour market, and the youth unemployment rate is relatively low.

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