At 33%, almost six times the world average, South Africa’s unemployment is the worst in the world. Despite this, the finance minister announced in his Medium-Term Budget Policy Statement (MTBPS) on Wednesday that he was effectively cutting funds to programmes that, in the 2022/23 financial year, provided public works employment to 1.8 million people.
He said that to continue to fund the 650,000 jobs per year in the Presidential Employment Stimulus (PES), he has to repurpose funds from the other two major public works programmes.
Of course, our national purse is under huge pressure, but cutting possibly hundreds of thousands of public employment jobs over other options at a time like this is perverse. There are many wasteful and inefficient programmes and departments where funds could be better repurposed to support public works jobs.
According to Kate Philip, programme lead of the PES, to avoid igniting the tinder box created by catastrophic levels of unemployment, we need to expand, not contract, tried-and-tested public employment that creates jobs right now. We don’t have time, she says, to wait for inclusive growth to create those jobs.
Andrew Donaldson, ex-deputy director-general of National Treasury, would like to see an expansion of our public employment programmes as quickly as possible together with targeted support for labour-intensive industries. He says that supporting an unemployed person with a public works job far outweighs its cost.
Read more in Daily Maverick: MTBPS 2023 is a shoddy compromise that means death by a thousand cuts
As for choosing the PES over the other public employment programmes, it does appear, though, that it is superior in quality. Early research on the PES, the majority of which is education assistants in our 23,000 public schools, shows substantially improved educational outcomes.
Unemployed members of Progress, a new political party that focuses on job creation, also attest to their PES job as having been more fulfilling, higher paid and, at nine to 10 months, longer term than other public employment they’ve participated in.
But they say that after their public employment ended they were left stranded again in long-term unemployment – an experience reinforced by wider research on youth employment programmes conducted by Lauren Graham at the University of Johannesburg. Professor Graham, one of the country’s foremost researchers on youth unemployment, says that the uncertainty participants feel about what they will do after their public employment ends, undermines such programmes.
It is for all these reasons that it is necessary for political parties campaigning for election in 2024 to advance a straightforward plan to guarantee every unemployed South African a work opportunity. This involves a major expansion of public employment along the lines of the PES. Below are some of the key elements of a jobs plan.
A plan for job creation
- Offer every unemployed South African a guaranteed work opportunity in the form of a half-time job paying R2,200 a month or R2,200 a month to be trained and funded as a micro-entrepreneur;
- Focus the jobs on socially and economically productive work so that for every R1 spent, conservatively, at least R1.50 to R2.50 is returned to GDP; and
- Ensure the jobs and micro-entrepreneur opportunities are continuous (one- to five-year contracts), predictable and stable, expecting the programme to reach every corner of the country after three years.
Modelling suggests that such a plan is economically responsible, ensuring that GDP grows faster than public debt. It also enables a vigorous private-sector recovery through the micro-entrepreneur programme and the widely distributed economic base created through so many more people earning a reliable income.
This way enormous human resources could be devoted to improving education, crime prevention, energy generation, housing, rail, roads, walkways, cycling paths, micro-farming and the reinvigoration of our secondary towns.
Such a plan could be funded by several large reprioritisations of the existing national budget – particularly infrastructure. We are also considering new, medium-term, progressive taxes which can, in substantial part, be offset by co-investing in our public employment programmes.
Early next year, Progress, a party that would enter a coalition with any other party that agrees to substantially realise such a work programme, will publish a full set of expert-informed policy positions. However, the central message will always remain: Get South Africa working and we have the best shot at fixing the rest of our problems. DM