Making social policy work

Secretary-General of the OECD

The OECD is once again hosting a meeting of social policy ministers. The last meeting took place seven years ago. Then, priorities and challenges were identified that needed to be addressed urgently in OECD countries. Many of these issues are still on the agenda today.

But this does not mean that little has happened in the years since. On the contrary, we have seen much progress everywhere. Let me just cite three examples: pensioner poverty has been all but eradicated in most countries; many OECD countries have embraced an employment-oriented approach to social policy; and policies to help men and women reconcile the demands of work and family life are being introduced in more and more countries.

This approach fits nicely with what I call the triangular paradigm of progress, anchored in one corner by economic growth, in the other by social cohesion or social stability, with good governance anchoring the third. That is where social policy is found, in support of the equilibrium of the triangle. Growth without a transfer of its benefits through appropriate social policy to society as a whole will ensure neither sustained economic nor social progress. And jobs are the most effective and productive mechanism to ensure that the benefits of economic growth are widely shared. That is why embracing an employment-oriented approach to social policy is so critical. After all, in a knowledge-based society, human capital is the most important contributor to growth.

We have made progress in the field of social policy, but we should not be complacent. Too many children continue to be exposed to poverty. Too many people in their prime age are excluded from employment, with little chance of ever working again. Too many women still find it impossible to combine work and family obligations, and end up foregoing good careers. And too many older persons spend the last years of their lives in isolation and dependency. Traditional social policy measures have not been able to solve these problems. It is time to change our approach. We need new solutions to old problems. And we need to find them urgently, before ageing and the pressure it is putting on government budgets further restrict manoeuvring space.

Moreover, I was disturbed to read the following in an article in New Scientist: “The rich are getting richer while the poor remain poor…ponder these numbers from the US…In 1979, the top 1%...earned on average 33.1 times as much as the lowest 20%. In 2000, this multiplier had grown to 88.5%. If inequality is growing in the US, what does this mean for other countries?”

There may be many reasons for this trend, but surely a more active social policy could help arrest it. “Old” social policy was based on a series of assumptions: the different stages in an individual’s life, such as childhood, study, work and retirement, were thought to be clearly marked and separated. Gender roles within families were clearer–women stayed at home with the children and men went to work, generally to full-time jobs. Nuclear families stayed together–divorce and separation were rare.

The world has changed. In most OECD countries, reality is different. Life patterns are more flexible as people switch between work, education and retirement. More and more women are earning their own income and sometimes they are the main breadwinners in the household. Children are less and less likely to spend their entire childhood living with both their biological parents. Couples separate and form families with new partners, or decide to stay single. The previously “atypical” career–one that is interrupted or unstable–is now becoming more typical.

Social policies need to adjust to these new arrangements and the stresses they bring if they are to be effective. Helping people is insufficient on its own. Good social policies must aim to prevent rather than cure distress. That means tackling the economic and social conditions in which people live. The new, active approach to social policy has two goals, with two different time frames. On the one hand, we must spend now to meet today’s needs, and on the other, we must start investing now to pre-empt future social distress.

Four principles form the core of the OECD’s active social policy agenda: first, social policies have to give children the best possible start in life; second, social policies have to help individuals overcome barriers to work; third, social policies must help reconcile work and family life; and finally, social policies have to become less age-dependent.

There is a variety of policy initiatives to be explored within each of these principles. Through the 2005 social policy ministerial and beyond, we must work hard with governments and stakeholders to produce some fresh, innovative approaches that can help us translate economic success into further social progress. Our economies depend on it.

©OECD Observer No 248, March 2005

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