Work Weekly Highlights: Emerging Patterns Shaping the Professional Landscape Globally
In the face of the unprecedented challenges posed by the COVID-19 pandemic, a reevaluation of the social contract is underway. The pandemic has stretched the boundaries of our existing social safety net, revealing cracks that were previously hidden.
According to Jim Chanos, a billionaire short-seller, the gig economy firms are being supported by taxpayers during the crisis. This support, Chanos argues, will negatively impact these firms in the long run. The Financial Times concurs, stating that the current social contract is no longer benefiting everyone, particularly those in the gig economy.
In response, the Brookings Institution is advocating for changes, specifically in the area of unemployment insurance (UI). The primary proposals for reform focus on improving program efficiency, integrity, and targeting of support, particularly in relation to health-related benefits and reemployment services.
One of the key proposed reforms is rebalancing health-related benefits. Recent UK government proposals aim to tighten eligibility for health-related benefits, such as the daily living component of Personal Independence Payment (PIP), which affects unemployment insurance claimants with health conditions. This includes scrapping the work capability assessment for Universal Credit Health Element (UCHE) and freezing or reducing payments for UCHE over several years.
Another crucial aspect of the proposed reforms is strengthening program integrity and fraud prevention. The U.S. Department of Labor's Office of Inspector General is making efforts to strengthen the UI program to prevent and detect fraud more effectively. This is a critical element to maintain the safety-net function of the UI system established during the pandemic’s economic shock.
Expanding reemployment services is another key proposal. The U.S. Department of Labor's guidance for FY 2025 funding encourages expanding Reemployment Services and Eligibility Assessments (RESEA) to a broader population of unemployment insurance claimants, including those recently excluded, to help recipients return to work more quickly. States are also encouraged to use worker profiling systems to identify claimants most likely to exhaust benefits and target them for reemployment support.
Lastly, adapting eligibility and benefit rules is essential to align these rules more consistently with economic realities post-pandemic, balancing timely support with incentives to reenter the workforce. Analyses show significant variation across U.S. states in UI eligibility criteria and benefits, and reforms aim to address this inconsistency.
In summary, the proposed reforms tend to focus on tightening some eligibility criteria and benefits for health-disabled claimants, reinforcing program integrity to reduce fraud, and expanding tailored reemployment services to better support the unemployed back into work. This adjustment of the social contract emphasises both support and work incentives in a post-pandemic economy.
The Financial Times further suggests that leaders must provide a social contract that benefits everyone during the pandemic, similar to their responses in the Great Depression and after the second world war. The article argues that all workers need social protection, regardless of the form of work, during the COVID-19 pandemic.
As the world continues to grapple with the pandemic's impact, these proposals and suggestions offer a roadmap for reforming unemployment insurance and reimagining the social contract to better support all workers in the post-pandemic economy.
[1] Brookings Institution. (n.d.). Unemployment insurance reform in the wake of COVID-19. Retrieved from https://www.brookings.edu/research/unemployment-insurance-reform-in-the-wake-of-covid-19/ [2] U.S. Department of Labor. (n.d.). Office of Inspector General. Retrieved from https://www.dol.gov/oig/ [3] U.S. Department of Labor. (n.d.). Reemployment Services and Eligibility Assessments (RESEA). Retrieved from https://www.dol.gov/agencies/eta/reemployment-services/reemployment-services-and-eligibility-assessments [4] Economic Policy Institute. (n.d.). Unemployment insurance eligibility criteria and benefits vary significantly across states. Retrieved from https://www.epi.org/unemployment-insurance-eligibility-criteria-and-benefits-vary-significantly-across-states/
- Amidst the pandemic, debates regarding the role of finance in business and politics have surfaced, with the Financial Times emphasizing the need for a social contract that benefits all workers, including those in the gig economy and self-employed, who have been left out of traditional safety nets.
- The Brookings Institution proposes reforms to unemployment insurance (UI) that focus on improving program efficiency, integrity, and targeting of support, particularly for health-related benefits and reemployment services, which could have implications for the general news and economic landscape.
