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We are damned if we don’t find a solution to unemploy...

Defend Truth

Opinionista

We are damned if we don’t find a solution to unemployment – and it’s really not that difficult

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Sasha Planting is a seasoned financial journalist and Associate Business Editor at Daily Maverick Business.

As far as bad news goes in South Africa, this past week caused extreme indigestion. We were told that expanded unemployment is now at 44.4%, one of the highest rates in the world. We learnt that more than 10,000 women were raped between April and June. That’s just those who reported it. And 5,760 people were murdered in the same period. In one country. In three months. In a country that is not at war. Except that we are. With ourselves.

First published in the Daily Maverick 168 weekly newspaper.

The numbers are horrifying. But numbers are just that – numbers. Remembering the people brings a different pain. This week, Gauteng health official Babita Deokaran, a mother, wife, friend and state witness, was gunned down in cold blood. Why? Because she could shine a spotlight on the greedy pigs who enabled the tender fraud within the Gauteng Department of Health. What kind of people walk among us?

This week we also remembered UCT student, daughter, friend, future mother and possible leader Uyinene Mrwetyana, murdered on 24 August 2019.

We are stealing our future. It is hard not to be overwhelmed by this. Poverty, unemployment and the absence of a decent life for all are relentless. The pressure of survival grinds us down and dehumanises us. All of us. Look around you at a Jozi traffic light – the only way people endure those two minutes is to look straight ahead and pretend they don’t see the pitiful attempts to attract their attention. The biggest driver of poverty, as we know well, is unemployment. The world unemployment rate for 2021 will average about 6.3% this year, according to the International Labour Organisation. What’s wrong with us? Why are we an outlier of extreme proportions? This discrepancy in our numbers is driving increasingly desperate efforts to find solutions – some of which are admirable. SA has one of the most remarkable social safety nets in the world. Between 2001 and 2017 we doubled our real spending on the vulnerable while increasing the number of beneficiaries sevenfold. There are more people covered by social protection with more money, but inequality in SA has grown unsustainably, as economist Mike Schussler points out in an article published on Moneyweb.

Now we are talking about a basic income grant (BIG). In an ideal world it is a stipend, paid to everyone over 18, that provides individuals with the freedom to make decisions that go beyond basic survival. In a world where economies are being fundamentally restructured by emerging and disruptive technologies, and where absolute job numbers will inevitably decline, it is an idea worth pursuing.

But what a BIG requires to be sustainable is that the underlying economy is robust. And SA’s is not. The economy is barely growing; fixed capital investment is in reverse. The increase in unemployment in the first quarter was not so much a function of job losses as the total lack of new job creation. SA lost 53,000 jobs, but unemployment increased by 186,000, meaning that more people entered the market than jobs were created.

A BIG (not universal) would add another 10 million people to the grant system – which currently supports 18 million people. This is funded by the fiscus, which derives most of its income from the private sector. The National Treasury says the number of workers paying PAYE is about seven million. But, as Schussler points out, there are about two million government employees, of whom about 90% pay PAYE, and then about 250,000 SOE employees. Government employees are actual beneficiaries of the tax pool, so only the five million private-sector PAYE taxpayers are net contributors to the fiscus. The BIG will add about 10 to 12 million people, making that ratio of private-sector individual PAYE payers to dependants on the money provided more than six to one.

That is not sustainable. Besides, if the past two decades have taught us anything, more social spending will not make SA society more equal. Nor will it stimulate job creation. That is the job of the private sector.

What we need from government is an effective, capable state. Growth demands this. Is that so difficult to do? Why are we squabbling like children about mayors in Joburg and Cape Town? Why are we not focused on finding the best possible municipal manager, the operational head of a city? This should be the most important position in a city. It should be apolitical – impossible in the current toxic environment.

If the politicians could get this right they could bask in the glory of leading a city that delivers to its people. Job creation should be the single biggest driver uniting us all. It’s a driver that should transcend race, class and ideology. Every decision made (by the best possible people in the job) should be made on the basis of whether it will have a positive outcome for job creation – nothing else. Because we are damned if we don’t. DM168

Sasha Planting is an associate editor at Business Maverick.

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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  • Spot on. But to get the economy going you would have to kill all the holy cows of the ANC and it would much rather have those than an economy.

  • I agree with BIG and support for the vulnerable, however, it will simply be a magnet for more migrants to S.A. No country can have porous borders: any discussion about salaries being pushed down by migrants willing to accept lower wages is called xenophobia. Nonsense – How many war criminals are resident in S.A.? We don’t know. What will happen to countries where all who can migrate south leaving the old to fend for themselves? What about their shrinking tax base? It’s a tough issue but it needs to be tackled: the rich EU squeal about taking 1 million refugees so how can S.A. have millions arriving from all points north? And all the remittances sent out are a further loss to the economy and our most vulnerable citizens suffer.

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