What Lithuanians Think About Social Security

As part of the social policy research, LFMI carried out an opinion poll to elicit public opinion about social policy in Lithuania. The survey targeted 2,035 respondents, whose split-up according to age, sex, place of residence, education and nationality corresponded to the structure of the Lithuanian population. In addition, 100 opinion leaders were interviewed, including 40 members of parliament, 43 enterprise managers and 17 heads of media companies.
The government’s performance is poor
As the opinion poll shows, most people in Lithuania think that government institutions responsible for social security are not doing a good job. All state institutions were evaluated negatively by more than half of those polled: the State Social Insurance Fund (Sodra) by 55.9 percent, the Ministry of Social Security and Labour by 62.6 percent, the Labour Exchange by 63.5 percent, and the parliamentary Social Affairs and Labour Committee by 66.7 percent. Only 35.1 percent of the respondents spoke well of Sodra, whose rating was relatively the best
On the other hand, although people are critical of government institutions, they still believe that the state should be responsible for people’s social well-being. More than 60 percent of the respondents indicated that it is the state, and not private structures, that should take care of elderly people, families with children, the unemployed, deprived individuals, etc. Only the youth would be entrusted to both the state and private entities (42 percent).
It is still a widespread belief, as these results show, that the state should help people in all hardships. The only problem, most people suppose, is that the existing government agencies are unwilling or unable to perform their duties properly; but if they were flawless, social security would be adequate as well.
The unfavourable attitudes to social policy makers and executives are prompted not so much by their poor performance as by people’s expectations the government itself is fostering. The expectations that people will be taken care of in any cirumstances are impossible to meet, so disappointment is inevitable.
When asked, however, who helps them in adversity, most people said “family, relatives, friends, and acquaintances.” Most people (79 percent) rely on families for material support or on themselves (45.2 percent). The state ranked fourth (33.9 percent).
The curse of unemployment
A total of 61.1 percent of those polled regard unemployment as the gravest social concern. Other problems were indicated much more seldom: crime is the major problem for 13 percent of the respondents, poverty for 7.7 percent, high utility fees by 7.5 percent. General hardships of life – low pensions and salaries and an inadeqate standard of living – ranked second. Opinion leaders also consider unemployment as Lithuania’s biggest concern (62 percent of the respondents). Low pension and wages came second (19 percent). It should be noted that the respondents were not given any options to choose from.
That unemployment is seen as the severest problem is also indicated by the fact the unemployed are considered to be the most vulnerable social group (80.1 percent of the respondents and 76 percent of the opinion leaders polled). The next were families raising children (53.8 and 51 percent respectively). Interestingly, deprived persons were pointed out by a mere 2 percent of those polled, even though this group is entitled to a number of concessions and allowances. This additional support must be seen as compensation for past grievances (a political measure) rather than aid for the present circumstances (social safety).
Thus, people understand that work and not social aid is the basis of social well-being: those who have jobs do not need any social assistance. More than half of those polled (64.5 percent) maintain that the state offers no help or inadequate assistance for people who lose jobs. Only 1.8 percent are confident that the state will provide timely and qualified aid. No such answers were given by the opinion leaders polled.
Quite a few of the survey respondents (almost 40 percent) have had the experience of looking for a job. As the survey results show, they relied mostly on their own efforts (40 percent) or on their friends and acquaintances. The Labour Exchange assisted only 7.7 percent of those polled, even though it possesses a broad network of agencies and employers are obligated by law to notify it about vacancies. The same refered to family members.
A lack of confidence in the Labour Exchange is illustrated by the fact that only 1.6 percent of those polled would apply there if they had to seek jobs again. Many (20.1 percent) would approach it as a last resort.
The respondents think that unemployment could be reduced mainly by improving the business climate, cutting taxes (56 percent) and creating jobs (53.8 percent). Opinion leaders attach much importance investment promotion (64 percent). However, better employment conditions, or employer-employee relationships, are not related with a more favourable business environment. The curtailment of bureaucracy and regulation in this area is not considered to be a factor in improving business conditions.
A total of 45.7 percent of those polled support extensive government interference in, and regulation of, labour relationships. The most important regulations are considered to be control of working conditions (85.2 percent), the minimum wage (80.7 percent) and working hours (74.7 percent).
Opinion leaders, too, uphold state control of working conditions (93 percent) and the minimum wage (83 percent). Even so, they think that the government should define only general principles regarding employer-employee relationships (66 percent).
What to do with pensions?
The 1995 pension reform did not bring any relief within the pension system in Lithuania. Sodra is facing a growing deficit. Not surprisingly, more than one fourth of the respondents have doubts whether they will receive any pension at all. Only 23.6 percent of those polled, mostly people of pre-retirement age, expect to receive pensions as they are today. One fifth, mostly people with higher income, believe they will get higher pensions than today. Of the opinion leaders polled, 49 percent expect larger pensions, 13 percent smaller, and 27 percent the same as today.
When asked if the pension system should be altered, 39.2 percent of the respondents had no opinion on the issue. Those who did answer spoke of improvements (34.4 percent) rather than wholesale change. Opinion leaders appeared to support extensive changes much more than the other respondents. Even so, moderate reforms are preferred (57 percent).
Few of those polled could suggest any ways to change the pension system. The most frequent suggestion was simply to raise pensions (14.1 percent), which is hardly a means to improve the system. Few respondents mentioned such measures as to lower the retirement age, to establish private pension funds (4.4 percent), to pay flat pensions (3.3 percent), to introduce fully-funded pensions (2.5 percent). Opinion leaders singled out the establishment of private pension funds as a means to improve the pension system (40.4 percent). Still, one third of the opinion leaders had no ideas what reforms are needed.
Privatisation of the pension system is increasingly brought up in public debates as a solution to the fraying social safety net. During the opinion poll, the respondents were asked to express their opinion about potential reforms whereby part of compulsory contributions would be paid to private pension funds. The supporters of such changes were more in number (41.2 percent) than its opponents (34.6 percent). The former are mostly young individuals. Most of the opinion leaders (80 percent) would uphold this reform, either fully or in part.
As the survey indicates, most people (41.8 percent) are in favour of a mixed pension system. A total of 78 percent of the opinion leaders would support a mixed system. They are also the most critical of the pay-as-you-go scheme.
Alongside social security pensions, there are privileged pensions paid from the state budget to distinguished and deprived persons, military, officials, and scientists. 36.4 percent of the survey participants said that priveleged pensions should be scrapped. The same was indicated by 19 percent of the opinion leaders polled. People disapprove mostly of military and officials’ pensions (only 2.3 percent think these pensions should be awarded). The most acceptable are pensions for distinguished people as well as exiles and resistance victims.
Interestingly, scientists are considered to be more worthy of supplementary pensions (20 percent of those polled would award them pensions) than high ranking officials (6 percent). Pensions for the latter are supportedby 29 percent of opinion leaders.
One of the questions was what people would do if state social insurance were voluntary. More than one third (36.1 percent) of those polled said they would save for old age, illness or unemployment themselves. 20.3 percent would use voluntary insurance at Sodra. Many respondents (21.78 percent) failed to answer this question.
Opinion leaders gave preference to private institutions (private insurance companies and pension funds (57 percent). Private institutions are trusted the most by entrepreneurs (69.8 percent) and the least by members of parliament (42.5 percent). 37.5 percent of the latter would prefer Sodra, while only 7 percent of business people, and 17.6 percent of journalists, would choose it.
The cost of social benefits
Most of the survey participants approve of social benefits. Yet, a striking 62,1 percent of the respondents would not agree to pay higher taxes to bolster the benefits. This implies that people are unaware of the source of social assistance. Otherwise, the respondents would be more consistent and people would demand less government largesse.
These attitudes are clearly reflected in the answers about compensations for heating as a social policy measure. As the survey shows, 42.4 percent of those polled think that the compensations should remain, and 23.2 percent would like the government to tighten up the conditions of compensation provision. Opinion leaders, however, who are likely to earn more and thus cover the costs of compensations for low-income families, disapprove of them (41 percent).
As the respondents reported, social aid provided in the form of cash is more acceptable (37,6 percent of those polled) than services or concessions, as people can decide for themselves how to make the best use of the money received. Most of those polled (59.4 percent) think that the provision of state aid should vary depending on individual or family income. A better-targeted aid, with benefits being channelled to those who need them most, would be much more effective.
Despite the still widespread wish to rely on the state, there is hope that attitudes are changing. Although the majority (54.1 percent) continue to think that social safety is the state’s concern, those who promote individual responsibility are many more in number than in the past years, when they comprised less than one third of the Lithuanian population (1990 and 1997).