Expanded Public Works Programme DELIVERS ONLY SHORT-TERM BENEFITS

Cape Times (South Africa), March 8, 2007 | Go to article overview

Expanded Public Works Programme DELIVERS ONLY SHORT-TERM BENEFITS


BYLINE: Anna McCord

In a country where 18 million people live in households with an income of less than R300 per person per month, the Expanded Public Works Programme (EPWP) is failing to achieve its objectives. It's time to consider alternative responses to South Africa's crisis of persistent chronic poverty.

One of the responses to chronic poverty in countries in Latin America, Asia and Africa is public works programmes. They are popular with donors and governments, but are they right for South Africa's unemployment context?

In the last year or two, unemployment has reached a plateau at about 26% by the official definition - or 39% in the expanded definition - which makes it one of the highest in the world.

Many international experts argue that South Africa should use the expanded definition rather than the official one, because there is a strong case to be made that it is inappropriate to spend time actively seeking work if you know there is no work available.

From a rational economic perspective, people who are no longer looking for work should still be considered unemployed.

In terms of the official definition, people who haven't actually sought work in the last few weeks are excluded from the unemployment calculation.

Unemployment has been increasing rapidly since the early 1970s for three main reasons: the liberalisation and globalisation of the economy; the shift from labour-intensive to more capital-intensive means of production; and a shift in the structure of the economy itself, away from the primary sector to the tertiary sector.

The rising level of unemployment is particularly acute among the lower skilled and concentrated in the black population.

Over the last few years there has been significant job growth, but this has been skewed towards people with high skills.

An estimated half a million jobs have been lost in the primary sector, mainly low and unskilled jobs. It's not just unemployment that is a problem, it's the nature of unemployment and where the burden falls, which is increasingly on the low and unskilled population.

We have heard that if we can reach a target of 6% growth we will be on route to a sustained response to poverty and unemployment.

The Accelerated and Shared Growth Initiative for South Africa (Asgisa) document says that with 6% growth social problems and unemployment will start to be resolved. However, two recent studies, one by the World Bank and the other by the UN Development Programme, argue that if we make projections on 6% growth with our current economic trajectory, there will still be levels of unemployment among the low-skilled and unskilled in excess of 30%.

That is one of the key factors to consider - even if we achieve Asgisa's ambitious growth targets we are still going to have an acute unemployment problem, and that is going to persist.

This is critical because of the particular linkage between unemployment and poverty in South Africa. In many other sub-Saharan countries there are cushions in the form of subsistence agriculture and a much more developed informal sector. Both of these are considerably smaller in South Africa for historical reasons. So losing formal employment is far more detrimental to household livelihoods than it would be in other countries in the region.

Even if, in the most positive growth scenario, there is chronic unemployment, what is society's obligation towards those people?

The term "surplus people", appropriated about 30 years for something different, is a useful way of thinking about marginalised people who are actually surplus to the requirements of our economy.

They don't have anything to offer because we don't want their labour, and they can't engage in economic processes because they don't have access to wage income. A huge proportion of our population are essentially marginalised from the economy, and economically surplus. …

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