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 (http://denmark.dk/en/society/welfare/flexicurity/) 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:

Pros

  • 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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