• Ivor Chipkin

Welfare and Economic Planning in South Africa

Here is an extract of a new article that Jelena Vidojevic and I have just completed.

The system of social grants introduced in South Africa after 1994 were widely celebrated in welfare circles for their unconditional nature. Cash payments are made to eligible mothers with children and to pensioners, which have no conditions concerning what the money may be used for. International scholars like James Ferguson saw in this development the birth of a new model of welfare, one tending towards a Universal Basic Income Grant. We have seen, however, that unconditional social grants never matured into a Basic Income Grant; the momentum stalled, that is. We saw that the ANC was worried that universal, unconditional welfare would produce widespread social dependency on government. Instead, the ANC saw welfare as an interim measure, that should target those who could not find formal employment. As we argued, the ANC’s approach to welfare, was informed by a certain idea of the economy: potentially fast-growing and labour absorbing across employment types and skills levels. Male ‘breadwinners’ were thus excepted from post-Apartheid welfare instruments because they were believed to be gainfully employed or, at least, potentially gainfully employed. Women, on the other hand, were deem vulnerable in this regard and the post-Apartheid system was largely built with them in mind. What the post-Apartheid welfare system was not designed to accommodate was mass, structural unemployment, especially amongst men.

In the second part of this essay, we argued that the assumption of full or near-full male employment was largely inconsistent with the analysis of the South African economy and labour force that was emerging in the 1970s and 1980s, especially amongst scholars and activists closest to the ANC itself. They had noticed that mass unemployment was becoming a permanent feature of the South African economy and predicted that it would be a key feature of the South African economy after the end of Apartheid as well. This analysis proved to be prescient, with the number of people of legal working age not in employment reaching well over 15 million in 2020. This suggests that the design of welfare instruments post-Apartheid paid little heed to economic trends. It further lends credence to the argument that the contemporary social grant system is largely an extension and expansion of Smuts-era arrangements carried forward during the Apartheid period.

We have seen too that mass, structural unemployment is also gendered, though not in a way commonly believed. While the absolute number of economically inactive women is slightly higher than for men, since 1994 the South African economy has seen the rapid growth of employment opportunities for women. In the context of generalized, growing unemployment, the rate of female unemployment has been much slower for women than for men. Welfare arrangements in South Africa, however, do not recognise this situation, condemning economically inactive men to a life without support, while providing some respite for young women with children. We have argued, furthermore, that economic inactivity makes it difficult, if not impossible for many men to fulfill their role as ‘providers’ or ‘breadwinners’. This constitutes a deep crisis of identity or personality. In the face of growing female autonomy and/or financial independence, this crisis expresses itself violently.

Finally we have argued that a universal basic income grant is the most appropriate measure in this context, not simply because it is right or just, but because it responds more precisely to the nature of the South African economy as it really is. This requires that we think differently about welfare in relation to economic planning. Mass unemployment is not simply a consequence of inadequate or skewed economic growth. It is likely that millions of South Africans are largely unemployable. Economic modelling must include easing routes of entry into the informal economy or of injecting capital and resources into an economy of the economically inactive. The Universal, Basic Income Grant is well positioned to perform both functions. Hence, inclusive economic growth and development requires that we think of welfare design as a key element of economic planning. This is currently not happening in South Africa. As a final remark, a universal grant may be the basis for creating a genuine solidarity economy in South Africa with benefits, in particular, to civil society. If wealthy and middle-class recipients can be encouraged to donate their benefit rather than keep it for themselves, civil society organisation could potentially be the beneficiaries of a new solidarity economy, rather than rely on philanthropy.

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