Not only did South Africa’s economy lose 2.2 million jobs by June, when many restrictions on economic activity were lifted, but the labour force participation rate declined sharply. What should concern us most is the widening gap between unemployment on the narrow and broad definitions, reflecting a decreasing proportion of working-age adults who are actively employed.

We are not alone in this. Unemployment has risen across the world, and the impact of the pandemic has been substantially worse than the global financial crisis. The US lost 22 million jobs – less than half of which have been regained – and Mexico lost 12 million. 

The economic downturn is partly due to measures necessary to contain the pandemic, but there are other factors at play too. For one thing, whether or not restrictions are imposed, individuals are less likely to engage in activities perceived as high-risk (including travel, eating out, and shopping for non-essential goods). This represents a natural drop in demand that will take time to reverse.

For another, a synchronised global downturn means that demand for South African exports is dampened. The spread of the virus itself reduces productivity, and disrupts workplaces and factories.

A pandemic is the perfect storm, affecting economic activity through multiple channels. 

In South Africa’s context, however, we began with an already high rate of unemployment before the pandemic – and entered this crisis on a weak footing. This reflects in the latest data from the NIDS-CRAM survey, which provides a detailed picture of the economy in June. 

The second wave of the survey shows that the economic decline has hit vulnerable South Africans the hardest. One-third of the total employment loss is in the bottom two deciles of the population, representing the lowest-income workers – mostly black, and mostly women.

Although hunger was reduced between April and June, it remained more than double 2016 levels. 

Of course, the economic shock of the pandemic represents something of an anomaly and many jobs will return as economic activity resumes. But the recovery will be gradual, not immediate – and in the meantime, millions more South Africans are without an income, facing an uncertain and precarious future.

In the debate about South Africa’s economic recovery, much attention has focused on the urgent need for structural reforms. These reforms are needed to reduce the cost of inputs, increase competition, and reorient the economy towards areas of growth and dynamism. They are essential to place our country on a rapid growth trajectory in the medium term.

But while some might see these reforms as the be-all and end-all of the recovery agenda, they will not help to address poverty and hunger in the short term.

Pursuing austerity and reform as the lone pillars of our recovery strategy would risk a social and political crisis, jeopardising the livelihoods of the most vulnerable South Africans. This is not a viable path.

Instead, we need to focus as much of our attention on supporting employment and providing adequate social protection for those in need. 

One of the most powerful findings of the NIDS-CRAM survey is the extent to which the measures contained in the government’s emergency relief package have rescued millions of people from hunger. 

The Special Covid-19 Grant in particular has provided crucial relief, lifting as many as 5 million individuals above the food poverty line. Additional social protection measures have reached 18 million people directly, and another 18 million indirectly – more than half of the South African population put together.

For all of the cynicism about these measures – and the complexities of establishing a new grant from scratch in a matter of weeks – they have proved to be an effective lifeline and have reached a large proportion of the poorest South Africans.

Strong social protection is the foundation of a compassionate government, and enshrined in our Constitution. The social grants system is one of our country’s greatest strengths, and it has proved its worth during this crisis. 

As we look to the next phase of our response, we cannot simply wait for the labour market to recover. Expanding employment is a necessity in the short term, and will require a massive mobilisation of resources and effort. As one of my colleagues often notes, “work matters too much to leave to markets alone”.

Our economic recovery should focus on the poor first and foremost. Our most important task is to ensure that no South African goes hungry, and to provide work for those who want it. 

More than anything else, this is an existential challenge for South Africa. DM