This article puts forth a hypothesis and a challenge. The hypothesis: structural change in the international economy and in the management of public policy has brought about changes in economic performance, affected employment, poverty, and equity and resulted in greater insecurity and uncertainty. The challenge: coping with this insecurity and uncertainty despite public policy's abandonment of its historical role and the lack of success thus far of the new approaches. This study points to the greater vulnerability today stemming from the labour market as well as asymmetries in trends in poverty and equity and examines how to address the inevitable social consequences of instability. It also proposes how to go about managing the instability that comes from the international sphere; adjusting macroeconomic policy to lessen the effects of the cycle; reconciling the need for labour flexibility with the protection required to cope with greater vulnerability; protecting those who are most vulnerable; and moving towards universal social security coverage.