The Role of Regulatory Interventions and Social Security Schemes to Make Work Pay in Combating Low Pay and Promoting Workers and Families Welfare.

The paper considers one of the significant challenges facing modern social security, which is the need to support low-paid workers and their family and dependants in ways which are responsive to labour market transformations. Low pay is a common phenomenon in many of the world’s labour markets, exacerbated by poorly paid and insecure part-time and short-term employment. This is coupled with systemic under-employment in some sectors – much of it with gender and other equalities dimensions. More recent challenges have come in the form of a fast-developing gig economy, often organised around wage regimes that can leave workers with below subsistence income levels. As a result of such trends, wage subsidisation through social security programmes has become an increasingly important and necessary feature of national systems, and modern social protection floors (Bachelet, 2011). In performing this role such schemes also help national economies by sustaining aggregate demand and maintaining consumer spending (Stiglitz, 2009; Barr, 2012). However, the scale on which support is needed means that the cost of schemes is putting social security systems under increasing pressure (ILO, 2015). The paper considers these points by reference to the role of the State as both a regulator of labour market employment conditions, and as the most important important purveyor of citizens ‘welfare’ (Pissarides, 2014). It concludes by discussing several key issues currently being addressed by the International Labour Organisation Global Commission on the Future of Work, notably gender inequalities, the impact of new technology and artificial intelligence, and the role of labour law regulation and social security in facilitating work transitions. The paper also highlights some of the newer challenges facing key European programmes, including the French Revenu de Solidarite Active and Universal Credit in the UK, developing themes in a previous paper at the XXI World Congress in Capetown (Puttick, 2014).