Social insurance - an idea worth discussing


Social insurance - an idea worth discussing

A new scheme to cover a chunk of the wages of people who lose their jobs is an idea worth considering argues Sam Gribben of E tū.

Sam Gribben

Sam Gribben, E tū

In this year’s budget, the Government described its new proposal for a social insurance scheme, as an ACC-style system that would cover around 80% of wages for several months while people who lose their jobs are looking for work. Everyone in paid work would be covered.

Many countries levy separate payments to fund unemployment benefits. Their design varies greatly. Like some others, ours would sit alongside other unemployment support, funded from general taxation.

FLAWED WELFARE SYSTEM

Our current welfare system has many serious flaws. Even after the increases announced in the budget, beneficiaries will struggle to make ends meet.

The Welfare Expert Advisory Group report proposed a new purpose for the Social Security Act; to whakamana tāngata and ensure a dignified life by:

  • providing financial security and social security sufficient for an adequate standard of living 
  • supporting people to achieve their potential for learning, caring or volunteering, and earning through good and appropriate work

Could a social insurance scheme help to further that goal?

STRENGTHENING THE SAFETY NET

That’s a completely valid position but ignores the reality that, frustratingly, the government has mostly rejected raising more revenue to raise benefits to the levels and terms being considered for social insurance payments.

It will undoubtedly strengthen the social safety net for the newly unemployed. But some critics argue it comes at the expense of other beneficiaries, that the money directed at this super-safety net should be distributed equally. 

The criticism also ignores the support people in paid work provide to whānau and others who rely on the current welfare system.

JUST TRANSITION

Entire communities can be devastated when a local workplace closes. Recently, mills in Whakatāne and Kawerau have been on shaky ground. Social insurance would mean hundreds of workers, and all the people who rely on their wages including beneficiaries, would be better off for much longer if they did close.

It would also give those who lose their jobs some breathing room to seek or create meaningful employment – a step towards the ‘just transition’ that unions have been advocating for.

The Covid crisis reminded us that it is precarious and vulnerable workers, notably women, who end up worst off when things go belly up.

Solutions then were the wage subsidy and other support that maintained incomes closer to usual wages than welfare benefits. These were necessary because our benefit levels are too low.

ADDRESSING INEQUITY

Under a social insurance scheme, higher paid workers would get more than lower paid workers when they lose their jobs. That is unequal, but wage inequality should be addressed at work, where it starts.

Besides, there are ways a social insurance scheme can be made fairer than the wage system, all of which is why considering this proposal makes sense.

Having said that, equity concerns must be addressed in the design process, in which unions, business, beneficiaries, and communities trapped in intergenerational poverty must be included.

The specifics will be very important. But as someone who has seen two “once in a lifetime” global economic downturns in the 15 years I’ve been working, I believe social insurance is an idea worth discussing.

This is an abridged version of an article which originally appeared in The Spinoff

 

Also in this issue:


"Thanks for making a difference"

We’ve been making sure your right to negotiate for pay increases is respected in the corridors of power and at the bargaining table.

Read More

President's message

Welcome to this edition of Te Mahinga Ora, I hope you enjoy reading about the mahi your union has undertaken over the past three months.

Read More

News in brief

A first for PSA Pasefika, a Budget 2021 update, news on our case against Inland Revenue, and more...

Read More

Long road to fair pay and conditions for support workers

Our home support workers have some of the worst employment conditions in New Zealand, and the PSA is determined to help change that with a Fair Pay Agreement (FPA).

Read More

Fair Pay Agreements – what are they all about?

All too often, employers compete for contracts by holding down pay and undermining conditions in an endless race to the bottom.

Read More

One Public Service

Common terms and conditions for all

Read More

Unsung heroes reach well-deserved pay settlement

Our members at ESR are some of the unsung heroes of New Zealand’s Covid response.

Read More

A massive contribution

Our PSA Kaumātua is stepping down from his duties after a lifetime of mahi for our union and Māori workers.

Read More

Fighting for a better life

Janice Panoho has been fighting for a better life for Māori since she joined the 1975 Land March and is still pursuing that goal in her new leadership role with the PSA.

Read More

Protect yourself, protect your community

Many of our members in health and community services are among those to be receiving their Covid-19 vaccine as the rollout continues across Aotearoa.

Read More

“We always have tamariki at heart”

Supporting tamariki and whānau to thrive is something we all want to strive for - but some of Aotearoa’s most needed workers are undervalued for this important mahi.

Read More

Wearing purple for library workers

Library workers and their supporters wore purple on May 13, to mark the second anniversary of our library assistants pay equity claim.

Read More

Building back better?

Nobody anticipated the scale of extra spending in this year’s budget, but CTU economist Craig Renney asks where is the vision for building back better?

Read More

Ināia tonu nei: The time for climate action is now

The PSA welcomes the Climate Change Commission’s advice that workers and unions help design a strategy that ensures the costs of transitioning to a low-emissions Aotearoa are shared fairly.

Read More

A giant whose shoulders we stand on

Elizabeth Orr was a leader in pay equity and equal pay in Aotearoa for more than 50 years.

Read More

Leading the way

When asked what attracted her to the study of marine macro-algae, NIWA delegate Wendy Nelson joked about getting paid to go to the beach.

Read More

Kia Kaha Te Reo Hangarau!

Technology is an essential tool in modern workplaces. Here are some kupu and phrases that could come in handy at work or at home

Read More

Signing for solidarity

As we marked NZ Sign Language Week, Janet Stokes, one of our first Deaf delegates, told Te Mahinga Ora about her mahi for the union and Deaf community.

Read More

Health and safety awards

Celebrating the exceptional work of our health and safety representatives across the public sector.

Read More

"A perfect storm"

As the effects of Covid and rising authoritarianism ravage much of our region, UnionAID’s Michael Naylor asks us to dig deep for their appeal.

Read More

Around & About

In this issue our photo page features the Nurses' Strike, Pink Shirt Day and much more

Read More