#9 Social crisis

#9 Social crisis

To what extent can local governments tackle the social crisis?

by Iván Tosics, Metropolitan Research Institute, Hungary

In the opening EURA Conversation #1, Robin Hambleton wrote “Covid-19 discriminates in a brutal way … really hurting the people in society who are already vulnerable.” Yes, the usual statements that ‘everyone is affected’ hide the reality that people face the difficulties from very different positions. Types of employment and housing conditions are key determinants of the ability to maintain income, health and quality of life during the quarantine. While most white-collar workers are able to survive in remote employment or home office, a large share of low income blue-collar workers either lost their job or face the risk of getting infected at work. If many people are crowded into single room housing units or do not have housing at all, their chances to get good food, teach their children and avoid the worst health consequences of the pandemic are much lower. For example, results of a survey reveal that the coronavirus death rate of homeless people living in London’s hostels is 25 times higher than the general adult population.

Thus it is fair to say that the most affected people are those who were already at risk of poverty and social exclusion. How are they handled during the pandemic? The virus, as a lightning in the dark, has been revealing the dramatic differences among the present social welfare systems of the EU countries. Fist of all, in many countries the means-tested, minimum-income-protection benefits do not cover workers with non-standard contracts, freelancers, self-employed individuals. Besides, in some countries the amount and lengths of unemployment benefits is very restricted, the poorest quickly deplete their entitlement to unemployment insurance and similar contributory benefits. Finally, there are countries, where the means-tested, minimum-income support is totally inadequate: the guaranteed minima fall in Romania, Italy, Bulgaria, Hungary, Latvia, Lithuania well below 40% of the at-risk-of-poverty threshold.

The public responses to the pandemic are led by national governments, resulting in a stark centralisation of policymaking. However, as national welfare systems are very different and in some countries the safety net has very large holes, local governments also have to intervene, whether they have the financial means for that or not.

Across European countries, I have seen many examples of how municipalities have been intervening to tackle the problems of the worst affected population groups on a range of policy themes, such as housing, homelessness, food, inclusive education, elderly care.

These are heart-warming examples, showing that local governments might play an important role to fight the crisis. At the same time, however, it has to be clear that cities cannot handle the increasing and complex social problems (which are interlinked with the chronic climate and economic crises) by themselves. In searching for policies and interventions in each country, good multilevel cooperation is needed between the national, regional, and local levels of governments. Moreover, EU-level policies need to be channelled into this cooperation.

I agree with Robin that many local leaders have been far more competent in responding to the Covid-19 threat than their central governments. I praise his optimism that local governance will gain in reputation and stature as we move towards a post Covid-19 world – but I see huge obstacles in this regard in some central governments. Probably new EU efforts are needed: the recovery package should force member states to apply basic welfare initiatives and also EU-wide welfare systems are needed, starting from and strengthening the Social Pillar, based on principles such as a minimum wage, universal basic income, Housing First and so on.

EURA Conversations will now take a break for the summer. We will re-start our weekly Conversation contributions on Monday 5 October 2020. Please consider sharing your ideas in this international space.