human development, social justice and sustainable social systems

Social economy

Putting people before profits

Overview

We live in a market economy where most businesses exist to generate a profit to fund individual wealth, where profits are put before people.

We want to turn this around and create a social economy, where people are put before profits and where earnings go towards meeting social objectives.

We are calling for policies that ensure that profits are invested in people, in their capacities and creativity.

We want profits to empower people, to create quality jobs, provide training and help people access the labour market.

This is not some kind of utopian dream. Slowly more and more companies across Europe are adopting new approaches and contributing to the creation of a social economy that is to the benefit of people and the planet.

However, such models will only become the norm if policies are put in place,and funding made available to speed up this transition and to ensure that social, economic and environmental needs are being tackled.

The problem

In recent years, we have witnessed:

  • An increase of in-work-poverty, where those in work are still unable to meet their basic needs because of poor pay and irregular contracts;
  • High unemployment in many countries; and
  • Less and worse access to quality services, such as social and health support, education and housing.

The labour market created by today’s economy entails a number of poverty risks, especially when salaries are inadequate and insufficient to meet basic living costs, when working conditions are indecent and when the balance between work and family life is not taken into consideration.

There is also an increasing tendency to offer temporary contracts or undeclared work, leaving workers without social protection in case of unemployment.

The impacts of the economic crisis we have been experiencing since 2008 demonstrate that our economic model is not sustainable and that the traditional social support system is obsolete.

We need to rethink social protection and social cohesion to ensure that nobody is left out in the cold.

Likewise, as the effects of climate change and environmental degradation become ever more apparent, it is clear that we need to shift gear and adopt an approach to work that is more sustainable for people and for the planet.

Our solutions

A social economy works by investing profits in social objectives.

This means, for example, offering free professional training for unemployed people or embedding vulnerable people inside companies, instead of paying share-holders large bonuses. 

It creates spaces for participating and sharing ideas and promotes cooperation, awareness and engagement among different communities.

Social economy also contributes to protecting the environment, fighting climate change and encouraging the sustainable development of companies rather than exponential growth to the detriment of the world’s natural resources.

This approach benefits individuals by empowering them to start their own businesses, access more quality jobs and gain a better sense of community belonging.

Communities become more cohesive, since social economies can facilitate the development of inclusive local policies and contribute to the common good of local communities.

The whole of society benefits from innovative ideas and solutions that answer society’s needs and contribute to changing mind-sets. 

Caritas helps thousands of people out of poverty and exclusion by supporting and running hundreds of social economy initiatives across Europe.

It makes sense that social economy is one solution towards building a stronger, more cohesive Europe!

Magdas Hotel, Vienna, Austria

Magdas Hotel, which translates as “like that hotel”, is a role model in combatting poverty by creating new jobs for refugees. It is a hotel run by 20 trained refugees from 16 different countries and experienced hotel staff. It offers guests from around the world a smart, urban and multicultural “home” with added social value.

The hotel was made possible thanks to a loan from Caritas Vienna. Since then, it has received no support, generating its own revenue and turnover.

The hotel is a social business: its focus is not on the maximisation of profit, but the maximisation of societal benefits and social inclusion. Hence, all proceeds go back into the running of the hotel and the training and support of staff. They may also be used to benefit the local community or the tourism industry.

The added value is that refugees, who would otherwise find it difficult to access the labour market, are given employment and support. This contributes to their economic integration and helps them overcome otherwise difficult structural barriers. The steady interaction and contact between the staff members and a wide range of customers also helps foster their cultural and social integration.

Unsurprisingly, the hotel has generated significant public attention and even picked up a couple of awards along the way!

To know more:
www.magdas-hotel.at

www.caritas.at

ask an expert

Antonio Fantasia
Policy and Advocacy Officer
Tel: +32 (0)2 235 26 59
Mob: +32 (0)476 973904
afantasia@caritas.eu