Social security for working-class people and the upcoming national budget

Published : 03 Jun 2020 08:54 PM | Updated : 07 Sep 2020 10:32 PM

Asad Uddin

Due to the impact of coronavirus, a significant portion of the lower class and the lower middle class people are facing livelihood crisis. This crisis has been exacerbated by the inadequacy of the country’s existing social security programs and the lack of allocation for them especially the working class communities. So it is the right time to streamline our social security programs for the development of the working class communities.

According to the Bangladesh labour Force Survey 2016-17, some 85.1 percent of the total labor force in the country is engaged in the informal sector. Majority of them are dependent on daily and contact based wages, who are now going through a great economic crisis. They are living in extreme poverty and hunger.

Bangladesh Labour Force Survey 2016-17 revealed that some 85.1 percent of total employment in the country is still engaged in the informal sector. According to the Bangladesh Bureau of Statistics (BBS) survey, the employment rate in the informal sector was 75 percent in 1999-2000 and 87.4 percent in 2013. 

Statistical analysis shows that the number of informal workers in 2013 was 50.8 million. In 2016-17 financial year it has increased to 60.828 million. According to the latest Labor Force Survey (2016-17) the number of women workers in this sector is 17.1 million. 

At the same time a significant portion of the expatriate workers have returned to the country and they are unemployed now. Considering this, the government should implement financial assistance for the workers of the informal sector in the country, including expatriate workers. Special allocation should be provided for them in the social security scheme in the national budget.

Some 12 percent of our labour population in Bangladesh consists of shop workers, amounting to around four million people. The shop owners’ association has claimed that they are at a loss of 10.47 billion taka per month. These workers contribute 13 percent to our country’s GDP. 

These shop workers are not being benefitted by the labour law and hence cannot form trade unions. As a result, they have remained unable to assert their rights. After shop closures, these workers did not receive their salaries, and no one thought how these people and their families would live during this testing time. Necessary  steps are needed to be taken to help these people. 

In the national budget for the fiscal year 2019-20, the number of beneficiaries under social security programs has been increased to 11.3 million. A budget of tk. 740 billion has been allocated for the social security programs in 2019-20 fiscal year, which is 14.13 percent of the budget and 2.58 percent of the GDP. According to the General Economic Division (GED), 64% of the country’s poor do not have access to a single scheme of social security. Some 28.4 percent of the total population is covered by at least one social security program.

A total of 7.4 million people received various allowances under the social security scheme in the budget of 2018-19 financial year and the allocation was 646.04 billion tk. However the biggest limitation of this statistics is that one third of the allocated money was for the retirement allowance or pension of government employees. 

As a result, a large section of real poor and marginal communities are being deprived from these facilities as usual. In addition to increasing the allocation for social security programs, it is important to ensure that the allocation reaches the real beneficiaries properly.

Another disappointing aspect is that, workers of ready-made garments who are the driving force of the country’s economy were not included in the social security of the national budget of 2019-2020. Negative trend in garment exports has been observed for five months. In the first six months of the current financial year, exports are down about 6 percent. Proponents of the ready-made garment sector say that where 10 to 15 per cent growth has been achieved so far, it has declined this year. 

The apparel industry of the country is going through a tough time. The garment industry is losing its ability to cope with continued price falling, rising production cost, rising the costs of remediation, and keeping pace with competing countries in the international arena. In this circumstances, it is essential to provide assistance to the garment industry to consolidate its investment and keep the industry developing. So these workers must be included in the social security schemes in the national budget.

The International Labor Organisation (ILO) recommends the introduction of a universal employment injury insurance scheme as part of the development of a comprehensive social protection system for Bangladeshi workers. 

In view of the initial interest of the government, employers and workers in this regard, since 2015, the International Labor Organisation has been providing technical assistance to the government in formulating a permanent national employment injury insurance scheme.

It is to be mentioned that, the International Labor Organisation (ILO) recommended to introduce a universal Employment Injury Insurance as part of the development of a comprehensive social protection system for the workers of Bangladesh. 

ILO has been providing technical support to the government in formulating a permanent national employment injury insurance scheme since 2015 in view of the initial interest of the government, employers and workers in this regard.

The draft proposal in this regard states that the Workplace Accident Compensation Scheme (EII) is a social protection system under which anyone who is responsible for an occupational accident has the right to receive compensation. The scheme will ensure financial security of casualty workers and their dependents in the event of a major factory accident and also protect the industrial owner from the risk of bankruptcy. If it is introduced, it will play a vital role in making the sustainable economic development of the country.

In the context of the ongoing COVID-19 epidemic, Bangladesh will have to face various economic crises in the fiscal year 2020-21. In this situation, the national budget of 2020-21 fiscal year should be formulated prioritising health-safety, social protection and creating employment for the people. 

A large section of the country’s marginalised  people, including women, children and senior citizens has been excluded from social security. These people need to be brought under social security programs.

If we want to achieve the Sustainable Development Goal (SDG) then all the people of the country specially the workers of formal and informal sectors must be gradually brought under social security programs. 

The allocation in the budget should be increased. On the other hand, the amount of allowances for the beneficiaries under social security is absolutely inadequate. 

Informal worker in the labor market means workers who have no identity card and contact letter/joining letter whose minimum wage is not fixed. They lead their days without any job security. Sustainable development is impossible by depriving these 60 million informal workers from social security and others basic rights. Unemployment and labor flows in the informal sector divulges the fragile state of the country’s economy.

It is not possible to run the wheel of the economy vibrantly without ensuring the basic rights, occupational health-safety and social security of the formal and informal workers. Appropriate and effective initiatives should be taken in this regard by the policy makers. In addition, at least 5 percent of GDP needs to be allocated under the social security schemes in the national budget of 2020-21 fiscal year.

Government agencies, non-government organisations are  implementing various initiatives to prevent the COVID-19 and to minimise its impact on the economy and daily life. These activities include awareness raising programs and emergency food support. In order to carry out these activities smoothly, fruitfully and effectively, coordination between public and private sector is a must.

Last but not the least, the government needs to take the necessary steps to ratify the International Labor Organisation (ILO) Convention (Convention 102) on social security-1952 to ensure an effective and universal social security.

Asad Uddin is Program Coordinator of OSHE Foundation, Dhaka