Debunking myths about social investment
Investing in services of general interest is key to unlocking the economic and social potential of the European Union. In addition to addressing present needs, it can prevent or reduce future needs that would give rise to additional costs in the future – a concept known as social investment.
This is something that Social Platform – the largest network of civil society alliances fighting for social justice in the EU – advocates for, and it seems that a shift in outlook has finally begun.
In its 22 February publication of its European semester country reports, the Commission stated that, “social investment is a prerequisite for a successful and lasting recovery.” In doing so, the Commission joins the OECD and the IMF in calling for a new approach to investment and public spending. Despite increased support, myths about the cost and impact of investment in services prevail.
One such myth is that spending on essential services prevents economic growth. In fact, countries that continued to invest in services during the financial crisis weathered the storm better than those that did not.
For example, countries with strong social protection systems like Poland and Slovakia saw their overall economic income continue to rise during the crisis, unlike countries like Latvia and the Czech Republic that saw their economic output decline by 11 per cent and nine per cent respectively from 2008-2012.
Continued spending on services also helps create jobs; social services alone have created 1.4 million jobs since 2008, and the social and health services sectors create 22.8 million jobs, amounting to over 10 per cent of the entire EU workforce.
Another common myth is that many people who are dependent on essential services could be working instead of staying at home. In reality, there are many people who are unable to work, rather than unwilling: there are many legitimate reasons for this, including a lack of jobs, disability, and care responsibilities.
AGE UK estimates that 300,000 carers are forced to give up paid jobs to fulfil care responsibilities every year, causing the UK an annual loss of over £5.3bn.
One option for bringing people in such vulnerable situations back into the labour market is the promotion of the social economy and social enterprises, which focus on social returns and not simply profit.
The Commission’s recognition of the power of social investment is a great first step in improving the socio-economic situation of the EU, but it’s important to build upon these words with actions.
This is why Social Platform and our members will continue to call for the EU to use its financial mechanisms – including the European fund for strategic investments – to promote the needs of the social sector.
Setting aside some of the fund specifically for social investment would be a good place to start. Until then, and unless member states start to see spending on services as an investment rather than a cost, it will be the EU’s social and economic interests that pay the price.