The ILO urges the universalization of social protection programs in Latin America

The International Labor Organization (ILO) urged Latin America to expand the coverage of its social protection programs to avoid amplifying the effects of upcoming crises, as has already happened with the pandemic of the COVID-19, where it was the most economically affected region in the world.

Before the pandemic, only 56% of the inhabitants of Latin America were covered by some type of social protection, and the contributory systems, which depend on the contributions of workers and employers, included only 46% of the employed.

This is reflected by the ILO in the “Panorama of social protection in Latin America and the Caribbean: Advances and setbacks in the face of the pandemic”, a report that reviews the situation of social protection and future challenges, such as eventual crisis that climate change may cause.

“The vast majority of the employed population did not have unemployment insurance or other ways of compensating income, especially those who were in the informal sector,” said the ILO director for Latin America and the Caribbean, Vinicius Pinheiro.

“This is a lesson learned from this pandemic: the lack of social protection makes us more vulnerable,” he said.

Depleted contributory systems

The report estimates that, as a consequence of the COVID-19 crisis, the contributory social protection systems registered a 7.9% drop in the number of contributors, which meant a setback of almost a decade.

Therefore, the ILO raises the need to move towards “comprehensive protection systems, based on a social protection floor with guarantees for universal access to health and economic security throughout the life cycle.”

“Social protection is essential for social inclusion and cohesion, reducing poverty and social inequalities, while facilitating productive transformation and improving productivity,” said Pinheiro.

“It is essential to adapt and expand social protection. Social benefits have been the first line of defense for those who lost their income and at the same time constitute an important engine to stimulate economic activity ”, he added.

Universal health

Among the policies suggested by the ILO is the need to move towards social protection floors that guarantee minimum benefits for all people, expand unemployment insurance, offer universal health protection and, in a time of crisis like the current one, “guarantee the sustainability of financing ”.

In the last year and a half, the health emergency and its consequences have placed under unprecedented pressure on non-contributory systems, which depend on fiscal resources, and which were essential to cushion the impact of the crisis.

In the case of economic security for the elderly, it is “a pending challenge”, since, according to the most recent data, 30% of those over 65 in Latin America and the Caribbean do not receive any type of earned income or a pension.

The report also recalled that there is a correlation between inequality and contributory social security coverage, since only between 20% and 40% contribute when they are part of the lowest income quintiles of the population.

Likewise, as the economic units grow, the greater the coverage, so that all countries have coverage that exceeds 60% or 80% in companies of 20 or more people, while the coverage is less than 20% when the company is five people or less.