Coverage of the Self-Employed

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Coverage of the Self-Employed

• Presentation for
• ISSA Technical Meeting July 4-6 2005
• British Virgin Islands

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Introduction The Context

• The issue of coverage is seen as significant, and
  is rank among the top ten critical issues
  affecting social security and is as important as
  the issue of demographics, financing, pension
  reform, health and migration.

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Context contd.

• When we speak of coverage we can either choose to
  focus on issues relating to compliance, sectoral
  composition or representation specific to gender
  composition or more ideally focus on the matter
  of exclusion paying attention to out reach i.e.
  who are we impacting? Who are at risk? And what
  level of safety net do we provide?

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The ILOs Views

• Highlight the fact that despite the worth of
  Social Security and the extent to which the
  system is meeting its ideals by impacting
  poverty, quality of life and human dignity,
  tremendous effort must be made to deal with the
  issue of extending coverage.

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The Challenge

• How is it possible for small states to safe guard
  its employees from the risk of job loss and the
  resulting loss of earnings?
• How easy it is to educate parties regarding
  rights, obligations and duty of care? Whose duty
  it is to safeguard the well-being of all workers?
  

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The Challenge the Issue of Globalisation

• One of the striking realities of globalisation is
  that while governments are still able to tax
  labour, they have a more difficult time taxing
  the ebb and flow of international investment and
  financial transactions. The irony is that just
  when governments need most to provide protection
  against unemployment and loss of income security,
  globalisation renders them less able to do so.

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What Has Been Said of the Self-Employed.

• Varied level of coverage
• Unwillingness to contribute
• They give priority to immediate needs
• They distrust the social security system
• There are differences between those who are
  owners of business and those who are wage
  earners
• Irregular income

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Information Specific to St. Vincent

• Offered in 1997 on a voluntary basis.
• Time line for registration 7 days
• Notification of any change to the Executive
  Director.
• The penalty for failing to comply-750. or six
  months imprisonment

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Registration and Coverage
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Registered Self-Employed Persons by Occupation
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Self-employed Classification as a Percent
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Analysis of Registrants

• Three significant areas.
• Craft and related trade workers
• Elementary occupation service workers
• Shop market sales

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ISCO-88Craft and Related Trade Workers

• Includes occupations whose tasks require the
  knowledge and experience of skilled trades or
  handicrafts.
• Tasks consist of extracting raw materials,
  constructing buildings and other structures and
  making various products as well as handicraft
  goods.
• Most occupations in this group require skills at
  the second ISCO skill level.

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Elementary Occupation Service Workers

• Covers occupations which require the knowledge
  and experience necessary to perform mostly simple
  and routine tasks

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Elementary Occupation Service Workers Contd

• Tasks consist of selling goods in streets,
  door-keeping and property watching, as well as
  cleaning, washing, pressing, and working as
  labourers in the fields of mining, agricultural
  and fishing, construction and manufacturing.
• Most occupations in this group require skills at
  the first ISCO skill level.

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Shop Market Sales

• Includes occupations whose main tasks require the
  knowledge and experience necessary to provide
  personal and protective services, and to sell
  goods in shops or markets.

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Shop Market Sales Contd

• Tasks consist of providing services related to
  travel, house keeping, catering, personal care,
  protection of individuals and property, and to
  maintaining law and order, or selling goods in
  shops or at markets.
• Most occupations in this major group require
  skills at the second ISCO skill level.

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Compliance Issues

• 31.92 of the registrants are paying
  contributions below the level of 520.00.
• 45.28 of the registrants are paying
  contributions at the level of 520.00.
• 12.48 of the registrants are paying contributions
  at the level of 1040.00
• 8.88 of the registrants are paying contributions
  between the level of 1640.00 - 2600.00
• 1.44 of the registrants are paying contributions
  at the level of 31.20 - 36.40

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The Compliance Challenges

• Should we be deterred given the issues-
• Low productivity
• Low income
• Infrequent operations
• Poor and unsafe conditions
• Low formal education
• Absence of trade union protection
• Lack of social protection
• Constraint
• Lack of access

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Suggestions for Discussion

• Strengthen the capacity of workers organization
  to negotiate on behalf of their workers
• Document the structures that exist among
  organized groups
• Assist with the development of management
  capabilities with the workers organizations
• To develop programs
• Ongoing public education
• Government to consider fiscal incentives for
  workers to join the scheme Tax rebate when
  purchases are made

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Suggestions for Discussion Contd

• Reverse tax credits
• Subsidize health insurance schemes
• To the extent that there are pockets of poverty
  in our country-means tested benefits-paid
• Identify business and workers who qualify to pay
  as you go-information and management development
• Training programmes to assist with the
  development of records
• Negotiation skills

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The End

• Conclusion