- Reset + Prindi

At the High-Level National Social Protection Course

27.10.2016

Honourable soon-to-be-graduates of the first national social protection course!

Any country in the world can be strong and capable of development, both economically and intellectually, if its residents feel that the country is their own. Without active and responsible citizens, such a state is unsustainable.

Only one thing is needed for this to happen: people must always feel that they are equal and dignified members of society. They must feel that they are heard and their worries are taken into account.

One keyword here is ‘always’. Another key fact is that we are all different: we have different abilities, backgrounds, health conditions, etc. But in spite of this, we all have the same desire for, and right to, a life and development that further human dignity.

Social protection should be focused on the rational and sustainable achievement of these two goals.

This is much more than we usually consider social protection to be. Social protection does not solely comprise social support measures and improving the system for their provision. Rather, we should address this web of issues from the opposite end. We must proceed from the understanding that the state of social protection and our social-economic success share a direct, two-way link.

This means that when sensibly organised, social protection will foster economic development, which in turn enables us to organise it better and better.

One could even say that a portion of the social support currently being paid is actually a correction of earlier errors. This expense must be made because some part of our residents’ actual, primary social protection (which is to say creating jobs and favourable entrepreneurial conditions, environmental protection, education, and healthcare) has been or is currently being done wrong, to a certain extent, or there are problems regarding the availability of the opportunities being provided.

If you live in a world with a brief temporal horizon, then the web of social-support woes does seem critical. People in need must be helped when they require assistance. Future problems aren’t especially significant by the time concrete aid is being provided.

The vitality of short-term thinking is further reinforced by the fact that our public health, education system, national mentality, labour market, etc. cannot be noticeably transformed in just a year or two, not to mention changing the demographic situation enough to have a noticeable effect.

Living in the short-term leads to total self-deception; to the belief that changes, which might seem slow and relatively small over the course of one year, can be consistently outdone by gradually improving the developed system.

You can only use the rear-view mirror for driving if the road is straight. If we peer even just a single generation ahead, we can see that the road is no longer as straight as it was a generation ago. Future trends won’t be the ones we are used to and upon which we built our social-security system. Just think about the massive project Estonia undertook at the turn of the century: pension reform.

I also usually attended meetings of the Social Reform Committee. We relied heavily upon predictions and the past when making our calculations; upon other countries’ experiences and our own level-headed reasoning. However, we did not foresee an interest-free world lasting for longer than perhaps the time it took to exit a short-term crisis. Interest rates did actually begin their decline before the 2008 economic crisis. It has likely been connected to ageing populations in the developed world and increasing savings, for which good earning opportunities can no longer be found. However, these trends were just starting around the year 2000. Today, we don’t know how long they will last. Perhaps this is the new ‘normal’. Perhaps it isn’t.

The birth rate, which shifted at the turn of the century in conjunction with globalisation, has changed Estonia’s labour-force supply trend from one of growth to decline. However, achievements in medicine and advances in communication have significantly impacted our population in terms of age and social structure. Technological development is placing new demands upon education. This has all significantly transformed the nature of work, but also the nature of the worker. Young people are not seeking simple employment. They are looking to have an interesting life, excitement, and constant change. The words ‘structural labour shortage’ will fall out of use over the next 20 years, when my generation starts collecting a pension. Lifelong learning, I believe, will also disappear from our vocabulary, because common things such as life, air, birth, and death do not need to be defined.

Lifelong learning falls into the same category for the younger generation. We don’t tell ourselves to breathe every morning. They don’t tell themselves every year to learn.

If the primary conditions of social development change so fundamentally, then the principles and instruments of social protection need to transform just as much.

Do we have a credible understanding of what the volume and cost of traditional social work might be in 25 years if we don’t change very much today? What might be the possible alternatives to today’s solution?

It isn’t only about the change in primary conditions, but above all the acceleration of these changes. The faster you drive, the further your vision must extend, and the less reaction time you have.

In order to be prepared for future challenges, we need a vision of what that future will likely be. We must certainly take into account multiple variations of how we might reach that future. However, their analysis will only provide us with a certain reaction speed, not an answer to the situations that await us.

Thus, specific details aren’t the most critical issue at hand when drafting a vision of the future – we can’t know them, anyway. What’s important is to at least comprehend our starting point. This is not the end point of the last two decades; it is much more a beginning point for the two ahead. If our departure point is wrongly detailed and has the wrong coordinates, then not even the best strategy or team can lead us to the future we’d like to have.

When I say the wrong point of departure, what I mean is all the social support structures and security that is also received by those who do not, in fact, need it. Protection that is provided not out of necessity, but proceeding from some other criterium. When I say wrong coordinates, I mean when a problem is resolved using measures meant for some other aim: for example, attempting to deal with regional policy problems using socio-political measures.

Unfortunately, regional policy problems can only be temporarily eased, not solved, using socio-political measures (i.e. until the money runs out).

Improving something that is wrong will only worsen the situation. The need for necessary improvements will simply be buried by adding more social support measures. It is your task to fight this.

Do we have any hope of success? We do, indeed, because we’re brought closer to our desired destination by every well-considered option; by every decision that gives us a sturdy tree-trunk of future possibilities.

If we extrapolate the cost dynamics associated with social protections that accompany our demographic trends, then there isn’t the least bit of doubt that if we carry on doing things the same way, we will not be able to guarantee the necessary level of taxpayer-funded social protection at the volumes we expect to see in the future.

At the same time, by extrapolating the changing economy and concept of labour, we see that solutions certainly exist in this new time and place; in this model of flexible labour that is taking shape before us.

We simply need to put these two perspectives together and think. What kind of social protection will a work-at-home mum who gives birth to triplets need? What about an older person with limited mobility who has to find a more convenient, indoor job in place of their former physically-active position?

We probably already realise that the mother of triplets doesn’t actually need the income limitation that comes with state maternity pay. She and her children could be much happier if she were able to keep working, to keep earning, which doesn’t negatively impact her right to receive these benefits. More likely than not, she would need the right to hire a flexible and tax-free nanny for four hours a day or so, or else night-time assistance. How can we create these opportunities for a mother of triplets who works from home and whose household income is, let’s say, twice the Estonian average? What about four times the average? Or what about half?

Let’s also consider older persons. No, not the ones who are elderly today. Take for example one of my daughter’s university classmates: a construction worker and site engineer who is on his feet at all kinds of building sites now and will be for the next twenty years, in all kinds of weather, coordinating communication between heavy machinery and equipment, and does so because he loves his job. He is highly educated, has adequate digital proficiencies, and speaks three languages. He won’t work a single day in the public sector. After 20 years, he’ll feel he no longer has the physical strength to continue doing his job in our chilly climate. He won’t suffer from any obvious physical disabilities, but finding indoor work will be problematic despite his high level of qualification. He’ll know what training he needs in order to find such a job, but certainly won’t fall into our current category of instinctively-understandable jobseekers who should be offered some kind of a standard re-training course. How can we help such people?

How can we help those, whose employment history is filled only with – to use our current vocabulary – odd jobs and short-term contracts with a large number of employers? What is a time and place of employment, really? Can, in some future situation, a hyperactive individual who is presently testing their second-grade teachers’ patience and will not hold a job in the strict current sense somehow become a very valuable employee?

All of the words, terminology, and situations that we currently use to describe the social field will clearly soon be meaningless or will have to acquire a new meaning entirely.

Healthcare, which affects each and every one of us, is also a part of treatment services. The more time that passes, the truer this becomes. Where does healthcare really begin and treatment begin? Does treatment start with a doctor’s visit? Does healthcare depend on one’s insurance coverage? Should all insured individuals have to pass certain health checks and go through screenings for the protection to be valid?

Should everyone who is treated by the Estonian Health Insurance Fund, apart from children and persons with serious disabilities, also have to be contributors to the health-insurance system? If they are not, then how can we be able to ensure that the Fund does not discriminate against non-paying groups when planning its investments and budgetary decisions?

We know that other countries have measured such tendencies and have found that the best treatment is still being offered for illnesses suffered by middle-aged men, while at the same time women’s health issues are often left on the back burner in terms of doctors’ attitudes and/or medical investments.

Just last year, I happened to notice on the back page of a newspaper that such a bias still exists even in highly-developed countries like Luxembourg! Yet, what about the health concerns faced by elderly persons in a situation where they pose a pure expense to the Health Insurance Fund? Could this have anything to do with the deafening silence, with which society treats geriatrics and dementia? Is it ethical to carry on like this? Using our current terminology, we call this providing treatment to preferential individuals on equal bases with payers of the social tax. But instead, maybe it’s really just ‘no participation, no problem’?

In the US, almost one in every one hundred persons is diagnosed with some kind of spectrum disorder. Many people take medication to preserve their quality of life. Are they healthy or sick? What difference does it make? Could the differentiation between sick and healthy have a different kind of meaning where, for instance, someone could go on part-time sick leave if they are no longer able to perform full-time duties? Could both the mother and the father take a half-day sick leave if their child is ill?

And finally, if we were to have an individually-tailored social package, then how would we manage and provide it without checking the costs included in the scale effect? How can we prevent the abuse of such a system, especially if we involve the community sector in providing many services? And include them we will, because we simply need such individual service at such arbitrary times in such low-population areas and cannot successfully administer it while operating structurally. We will probably have to start making payments to civil society. But how? May a social worker give ten euros to an older man to stack firewood in the shed of the older lady that lives next door? But what about paying a retired teacher to tutor a problematic child in maths? Currently, this is isn’t allowed.

There is a danger the system will be abused. But let us evaluate the risks. Which one is worse: an old woman freezing at home or two euros too much paid to her neighbour?

Who are the parties in social security and how should it be financed? In other words, what is the current role of the state, the individual, and private industry in ensuring social guarantees, and how can this role be shaped?

An old truth of natural sciences is that systems that are diverse are stable and more sustainable. If you look for simple, generalising, black-and-white solutions in social guarantees, then frankly, it’s highly unlikely they will be any good.

We should aim firstly to have a diverse system in which complications in one area do not cause a dead-end situation in another. Secondly, this diverse system will create a significantly better basis of comparison when making new decisions.

One critical factor in designing a diverse system is to establish conditions that are fair towards all parties and have the stability activity requires. I actually don’t see a single area in which this shouldn’t be done. The problem is rather that due to the small size of our country, it will not always be possible for diverse social guarantees to develop everywhere if we stay true to a generalising model. All we can do is go with a differentiating model and individualised services that precisely match a person’s needs.

The issue of how social guarantees should be funded and by whom is more complicated. It’s clear that the more time that passes and the wealthier the nation becomes, the more things there are which people can pay for themselves. Even if only because it would provide more feedback.

Secondly a greater inflow of funding would also ensure the sector’s more rapid development and better quality. Even partial payment could significantly alter the situation in terms of feedback, reducing any excessive consumption and also the outbidding of social guarantees. Making it more rational. Furthermore, we must also take into account the limitations set by the state budget.

Dependence upon a certain path is always the hardest thing to get rid of when making and carrying out changes. For aside of professional and personal inertia, people always get locked into old traditions and values. Bringing in a system with greater self-finance rates will also require additional individual design for those whose higher share would inevitably mean their being deprived of services.

Our long-term opportunities in the field of social security do not depend on the state budget inasmuch as they do on regional governments or, to be more exact, on social workers and their freedom to act. If, for example, it is relatively easy to determine the situation in road construction or repairs or even social infrastructure, and to draft a programme that needs to be accomplished based upon it, then the given regional government’s social workers alone can adequately evaluate actual problems and the social-security situation. Other public-sector instances simply do not have the necessary information for this. Nor can it exist there, because part of the information cannot be detailed precisely in numbers or in words.

No one apart from local social workers know the actual source of the problem in each individual case.

Greater functionality in social work must also be a goal, because it’s costlier and more complicated to win back what is lost. Often, it’s no longer even possible.

Greater functionality requires more rights, but also significantly more responsibility. How can we guarantee social workers free decision-making while simultaneously maintaining the transparency of those decisions? Social control is very important, but how can personal data be protected while doing so? For example, it wasn’t all that hard to check the legitimacy of EU-funded building expenses on houses for miners in the coal-and-steel union of the 1950s: the whole village knew who had received support and if it didn’t produce the right house, then they went and said something about it immediately.

These days, services and support measures are hidden and personal data is protected, but even so, community control is and will remain important. It might even gain importance if many services are provided in an individualised fashion, by the decision of a social worker, in the form of money or materials, and by either the public sector or civil society.

It may sound like anarchy right now, but there is really no other way to have high effectivity in our small-scale system. What will we give up in this tiring equation? Please don’t let it be individualised services. I would rather accept higher risk within the system. Consider for a moment: in the state budget, all risk levels that fall below 2% are regarded as a normal. On average. Most of the country’s accounting is actually risk-free. An automatic wage-calculation system will most likely have a 0% mistake rate. This means that for many riskier services, especially when they are small-scale and can be provided by several different individuals, our tolerance could easily be raised to 5% without the overall budgetary risk level even coming close to the critical 2% rate. Not that 5% would be stolen, but it would cover shortcomings in terms of effectivity. We may achieve a better, less costly, and more flexible system if we’re able to weigh and accept these risks.

Here is a simple example from modern-day Estonian life: if a child receives orthopaedic insoles, then the necessary paperwork for getting them at a discounted price shouldn’t triple as the child grows. I might add that in order to receive a single document, the family must make a basically pointless visit to an orthopaedist, even though a family doctor is capable of evaluating the continued necessity of insoles. What is our risk analysis in this case? Do we truly believe that more than 0.01% of hypochondriac parents would have the time or energy to go and get their child unnecessary foot support if just one document from the family doctor for recurring purchases is enough to get a discount? A child’s foot size increases twice a year, meaning each such child currently deprives two other people of orthopaedist visits!

A universal basic income has often been discussed lately. It would reduce the bureaucracy that comes with providing support measures and would do away with the application procedure, which is a slight to human dignity.

I am sceptical of the proposal for two reasons. Firstly, the systems for administering complex processes cannot be made simple by their very nature. Providing social protection is a difficult problem.

From everything I have said here, you can see that I support the opposite: a precise, multi-faceted design for social support that corresponds to peoples’ needs and opportunities. If we cannot manage to deliver this, then our system will inevitably encounter disruptions and breaking points where people do receive some kind of service, but not the kind they need. Someone might receive six months’ worth of paid sick leave to wait for their meniscectomy, but not the operation six months earlier.

The person might be entitled to a mobility service, but in the form of the regional government’s state procurement partner and not an Uber disability taxi. They might get an ambulance to the hospital, but not a ride back home with some well-operating model. They might receive rehabilitation services for a sick child, but not psychological assistance for family members. The list is endless. An unfit service is not a justified expense; we all know many good jokes about it. I do have one recommendation: let’s get together and collect all the tales we can about how some service we provided sat like a saddle on a pig’s back, and based on that data, consider how to turn the jokes into a success story.

The academic definition of a public service sounds a little contradictory in this context, of course. A public service is one provided to society as a whole, but not to any one individual directly. However, there is no contradiction in the broader sense: a citizen finding themselves in a complicated situation due to circumstances beyond their control will receive help from the state to ensure their welfare does not differ over their lifetime, or differs as little as possible, from that of their fellow citizens. Let’s not hide behind such narrow definitions.