How to make a social safety-net for the post-covid world

Governments must remake the social contract for the 21st century


  • by
  • 03 6, 2021
  • in Leaders

Depression and the second world war, voters and governments in rich countries recast the relationship between the state and its citizens. Now the pandemic has seen the old rules on social spending ripped up. More than three-quarters of Americans support President Joe Biden’s $1.9trn stimulus bill, which is due in the Senate and includes $1,400 cheques for most adults. And in the budget on March 3rd Britain extended a scheme to pay the wages of furloughed workers until September, even as public debt hit its highest level since 1945 (see ). Such boldness brings dangers: governments could stretch the public finances to breaking-point, distort incentives and create sclerotic societies. But they also have a chance to create new social-welfare policies that are affordable and which help workers thrive in an economy facing technological disruption. They must seize it.The past year has seen a wild experiment in social spending. The world launched at least 1,600 new social-protection programmes in 2020 (see ). Rich countries have provided 5.8% of on average to help record numbers of workers. Government debts are piling up, but so far low interest rates mean that they are cheap to The public’s mood had already been shifting. Britons used to grumble that layabouts sponged off the welfare state; now they are more likely to say help is too stingy. Last year over two-thirds of Europeans said they supported a universal basic income (), an unconditional recurring payment to all adults. Affluent professionals have had their gaze drawn to the working conditions of those who deliver food and look after the sick. The struggles of women who have dropped out of the workforce to care for children and the elderly have become impossible to ignore.

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