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LABOUR: More Money. Happy? No

Sanjay Suri

LONDON, Sep 1 2004 (IPS) - Do not pay a lot of money, just keep it coming: this is what a new ILO study suggests makes for a happy and productive worker.

”The most important determinant of national happiness is not income level,” says a new report by the Geneva-based International Labour Organisation (ILO). ”The most important factor is the extent of income security, measured in terms of income protection and a low degree of income inequality.”

Income levels are of course easier to measure than ”national happiness”. But the report ‘Economic security for a better world’ sought answers through an extensive international survey. It produced an Economic Security Index (ESI) that becomes also a happiness index.

”We’ve taken measures of happiness that have been calculated over the years by independent organisations in the Netherlands and elsewhere,”Dr Guy Standing, director of the socio-economic security programme of the ILO, and coordinator of the report told IPS in an interview from Geneva.

”Happiness is measured by asking representative samples in each country their level of life satisfaction and looking at the distribution among the people in that country of degrees of contentment,” he said.

The survey found statistical support for the street wisdom of many, that increased income does not necessarily add up to greater happiness.

”A number of our research studies have shown that beyond a point it is not the case that as a country gets richer, its citizens get happier,”Standing said. ”In the United States the degree of happiness has gone down in the last few years even though income levels have risen. It’s the security of income that has a bigger influence on people’s happiness.”

That simple lesson seems not to have gone home to decision-makers. ”We know that many of the policies that have been introduced in many parts of the world as a part of globalisation have actually increased the degree of insecurity in the labour market,”Standing said. ”They have introduced greater and greater economic variability and volatility, and therefore it is not surprising that happiness levels have been adversely affected.”

The ILO study points to a fallout of work insecurity at several levels. ”Those with security are able to take decisions more rationally and are able to face the future with a greater degree of well-being,” Standing said. ”We know that security helps people be more content with their lives.”

But the study found also that ”other things like social tolerance have been adversely affected,”Standing said. ”And we find through our micro research that people who are insecure are actually less tolerant about social policies. People who are insecure are more likely to favour discrimination against minorities, against women, against migrants. These are some of the dangers of allowing greater economic insecurity.”

Through the report, he said, ”we are making a plea for policy makers to give many of the insecurities arising from many of the changes taking place greater attention than they have thus far.”

The report divides countries into four categories in terms of providing economic security: the pacesetters (with good policies and outcomes), pragmatists (good outcomes despite less impressive policies), conventionals (seemingly good policies with less impressive outcomes) and the much-to-be-done countries (weak policies and poor outcomes).

Only Canada, Western Europe and Japan fall into the first category. The second includes the United States, Australia and South Africa. The report says 73 percent of all workers live in circumstances of economic insecurity in other countries.

But the index shows also that some lower income countries achieve higher levels of economic security – and therefore happiness – than some rich countries. ”The ILO finds that the global distribution of economic insecurity does not correspond to the global distribution of income,” the report says.

South Asia and South-east Asia have ”greater shares of economic security than their shares of the world’s income,”the report says. ”Whereas South Asia has about 7 percent of the world’s income, it has about 14 percent of the world’s economic security. By contrast Latin American countries provide their citizens with much less economic security than could be expected from their relative income levels.”

But the study finds that ”employment security is diminishing almost everywhere due to informalisation of economic activities, outsourcing and regulatory reforms.”

The study finds that in developing countries ”national level of economic security is inversely related to capital account openness, implying that it would be sensible for developing countries to delay opening their capital accounts until institutional developments and social policies were in place to enable their societies to withstand external shocks.”

The findings suggest that groups such as unions and civil society will have to re-examine their role and re-invent themselves if they want to support workers.

”The two most important forms of security are income security – people must have at least a basic income – and basic representation,”Standing said. ”Every group needs a collective body to represent their interests. The trouble is that trade unions in their traditional role have tended to look after a certain kind of worker, and not helped informal workers, not helped women workers.”

The study raises uncomfortable questions for civil society. ”Many of them are not representative, they are not democratic, they are not transparent,” Standing said. ”They are easily co-opted by powerful interests. What is important is that organisations emerge in civil society that bargain for vulnerable groups. They should link up with trade unions that are open to bargaining for insecure groups.”