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Improving access to decent and formal work 

11 Nov 2022

  • Local think-tank IPS shares policy insights on promoting access to decent work amidst an economic crisis 
BY Sumudu Chamara In Sri Lanka, access to decent work opportunities is limited, and even when jobs are available, not all workers have the same access to decent work. This situation has resulted in only 20% of the working-age population having access to formal work, and access to formal employment is much lower than the overall average for females, low-skilled workers, and youth. That is also slightly lower for workers of old age and rural sector workers. According to a recent policy insight titled “Promoting Access to Decent Work Amidst Sri Lanka’s Economic Crisis” issued by the Institute of Policy Studies (IPS) based on its flagship publication Sri Lanka: State of the Economy 2022, in order to fuel economic growth and become more competitive in the global labour market, Sri Lanka must increase its stock of highly skilled workers through improved education and training, and create more professional and managerial job opportunities, among several other steps. In such a context, the brief pointed out that it is crucial to pay attention to improving decent work in Sri Lanka. It examined the gaps in access to decent work in the country, and presented policy recommendations to overcome the disparities, mitigate the adverse impacts of the current economic crisis, and to support recovery efforts. Decent work agenda and decent work in SL The brief explained the importance of decent work, noting that the Decent Work Agenda launched by the International Labour Organisation (ILO) in 1999, was initiated with the primary goal of promoting “opportunities for women and men to obtain decent and productive work, in conditions of freedom, equality, security, and human dignity”. “Decent work is also a critical component of Goal Eight of the 2030 agenda on Sustainable Development Goals (SDGs), which encourages inclusive economic growth that is not harmful to the planet. The Decent Work Agenda provides a solution to the problem of growth being exclusive as opposed to inclusive, as improving access to decent work will ensure access to adequate wages, social security and safeguard human rights,” it further said. With regard to the state of decent work in Sri Lanka, particularly access to such work, the brief pointed out that a large share (62.3%) of the household income in Sri Lanka is “earned income” (income earned through a job or self-employment), according to the Household Income and Expenditure Survey (HIES) of 2019 conducted by the Department of Census and Statistics (DCS). Noting that of this, 37.5% was from wages and salaries, 18.1% was from non-agricultural activities, and the remaining 6.7% was from agricultural activities, the brief said that this signifies the importance of access to decent work to reducing income inequality in Sri Lanka. During economic setbacks, it added, issues such as income inequality get sidelined and receive less attention amidst other priorities, noting that the current crisis highlights the importance of adequate wages and social security in order to withstand economic shocks. “The Covid-19 pandemic also explained how informal workers were the most affected by adverse economic shocks. Moreover, it is harder to target those in the unorganised informal sector to provide relief, as policy makers have little or no information on who they are and their needs,” it was further noted. Gaps in access to decent work Highlighting that access to decent work opportunities in Sri Lanka is limited, and that not everyone has access to such opportunities, the brief discussed the issue of the lack of or unorganised access to decent work in Sri Lanka. It explained: “The best available measure of decent work is formal employment. Formal employees, by definition, are non-vulnerable workers whose employer contributes towards a Provident Fund on their behalf. According to the Labour Force Survey (LFS), only 20% of the working age population is in fulltime formal employment. Like other measures of decent work, access to formal work also varies substantially across population groups. Those who are educated have the highest access to formal work, followed by prime age workers. Youth, females, and those with low levels of education have the least access to formal work. Access to formal work is also slightly lower for old-age and rural sector workers.” With regard to increasing access to decent work in the country, the brief said that the main way of achieving decent work opportunities as the aforementioned SDG has stated is by investing in sectors that are more likely to create productive employment.  “Growth in such sectors is more inclusive, as the benefits of growth are shared through the employment income. The ‘arc elasticity of employment’ which is the percentage increase in employment for a 1% increase in the gross domestic product (GDP), assesses how employment expands relative to economic growth. Sectors that create more jobs while increasing productivity which boosts access to high paying jobs are one aspect of decent work. For productivity to increase while expanding employment opportunities, both employment and value addition in the sector must increase, and growth in the latter must exceed the growth in the former,” the brief further read. According to the statistics presented in the brief, during the 2018-2020 period, only the services sector had shown productivity growth, and unlike in the previous period, employment had contracted by 1.5%. This situation, the report said, indicates a decrease in access to productive jobs in this period, and the decline in labour market conditions was mainly due to the Easter Sunday attacks in April, 2019, followed by the Covid-19 pandemic, which saw economic conditions in the country sharply deteriorate. It was further explained that during the said period, employment opportunities moved from the industry and services sectors to the highly labour intensive agriculture sector. According to LFS 2020, 91.4 % of agricultural workers are informal workers who are not covered by social security, and their average monthly earnings were lower than those workers in the industry and services sectors.  Workplace discrimination Moreover, the brief read that demand side factors, such as occupation segregation, wage gaps, and discrimination in the workplace also affect workers’ access to decent work. It said that occupational segregation occurs when working conditions and hours are more attractive to certain types of workers, an example being occupations such as construction and transport being more attractive to males.  It was explained: “The framing of existing labour legislation in Sri Lanka is paternalistic; it operates on the premise that females need to be protected through regulations which require employers to provide special privileges when hiring females. Further, in Sri Lanka, employers bear the cost of providing maternity benefits to female workers. Such regulations make employing females costly for employers. As such, they may show a preference for hiring males over females, thus reducing access to decent work for females. In addition, the traditional attitudes and social norms on the roles and responsibilities of males and females play a role in females’ access to decent work. Most firm level policies on employment are made by bodies where female representation is either non-existent or minimal.  “Thus, the needs and requirements of females are rarely considered in those policies. As can be seen, these social norms are considered by employers when making decisions on recruiting female workers. A recent ILO study found that some managers were unaware of the implicit gender biases in firm level policies and practices. One example is the requirement to work excessive hours beyond the legislated maximum. Such policies are more challenging for females as they are their families’ primary caregivers, especially those with children.” Policy recommendations The brief put forward several recommendations in order to overcome the aforementioned gaps and to improve access to decent work in the country. One of the recommendations was increasing the stock of highly skilled workers through improved education, training and investments, and creating jobs for skilled workers. It explained that with rapid technological changes, new jobs emerge while conventional jobs become obsolete or drastically change, and that as many of the remaining jobs require highly skilled workers, future job growth and opportunities will likely be in high skilled jobs. In this context, it was stated that Sri Lanka must invest in creating highly skilled managerial, professional, and technical positions with a higher probability of sustaining access to decent work through education and training. Investing in economic sectors that are likely to generate more productive jobs was another recommendation, under which the brief noted that strategic investments to expand productive work can improve access to decent work. In order to increase sustainable access to decent work, it recommended that Sri Lanka must invest in expanding sectors that are likely to generate productive employment and implement mechanisms to safeguard such sectors from adverse shocks. Such investments are more likely to be inclusive as economic growth benefits people through increased employment incomes, it was further stated. In addition, the IPS brief recommended addressing barriers which prevent women from accessing decent work. It explained that a variety of factors, ranging from the legal environment, social infrastructure, and social practices inside and outside the workplace, hinder greater female participation in the labour market, and noted that making labour legislation more gender neutral, enhancing access to affordable and quality transport and child care facilities, and regulations that reduce explicit and implicit discrimination in the workplace, will improve females’ access to the labour market.  

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