This study examines how to expand the role of the welfare state in responding to rising inequality. Labour market inequality and instability, which have been persisting for decades and have recently intensified under the impact of the digital and gree...
This study examines how to expand the role of the welfare state in responding to rising inequality. Labour market inequality and instability, which have been persisting for decades and have recently intensified under the impact of the digital and green transitions, pose challenges that cannot be fully addressed by the existing redistributive welfare state or the social investment model that intervenes on the supply side of the labour market. To respond to this, welfare states should seek policy directions that intervene on the demand side of the labour market to reduce inequality from the primary distribution. This study defines such a policy direction as ‘good jobs strategy’ and suggests that it should be the policy goal of the welfare state. Specific measures include a ‘model employer state’ in which the state creates quality jobs in social services such as education and care; a ‘minimum wage policy’ that expands the coverage of the minimum wage and maintains it at an appropriate level; ‘labor empowerment’ that institutionally supports collective bargaining and guarantees the labour rights of precarious workers; and a ‘21st century industrial policy’ that induces labour-friendly technology development through industrial policy and promotes the creation of good jobs by private companies. We also suggested that the role of the welfare state can be expanded by combining these ‘good job strategy’ with existing welfare state policies such as social services, income security for the working poor, active labour market policies, and skill development policies through education and training.