In her recent article, Ann Bernstein vigorously shot down the idea that public employment programmes are the solution to SA’s unemployment crisis, going to great lengths to argue that support for economic growth should take priority (“Focus on public employment schemes prolongs joblessness”, October 16.)
What is puzzling is that the article’s sound and fury is addressed at a policy debate that simply doesn’t exist. Have Operation Vulindlela and countless policy documents from within government simply passed Bernstein by? There is probably no issue on which there is a greater consensus — across the aisles and from all social partners — than that SA’s most urgent priority is to unlock forms of growth and economic development that deliver more and better jobs and livelihoods.
The big debate is how to do it. While Bernstein invokes “growth” as an economic talisman, reality is more complex. Not even growth is a silver bullet for job creation, and not all forms of growth are equal. In fact, in contexts of high inequality such as ours, growth tends to reinforce existing patterns of distribution and bypass the poor.
The employment elasticities of growth are also highly variable. In the last quarter, for example, Stats SA data shows that GDP grew but jobs were lost. Harambee’s analysis of quarterly labour force survey data reflects that since 2008, youth unemployment has risen even when the economy has grown.
That doesn’t change the fact that getting it right is a priority. Let’s just assume that we do so — that we adopt the “right” economic policies and implement them optimally. The hard truth remains that even then, more and better jobs won’t come overnight. Any form of growth will take time to deliver jobs at the scale of social need. Five years? A decade?
Unemployment, however, is having corrosive impacts on society right now. As the single biggest cause of poverty, it is unemployment that is to blame for the empty plates in too many households and for the despair felt by a growing number of young people who see no future for themselves.
These and many other impacts of unemployment threaten the fragile social contract that keeps our country together. If that breaks — as it threatened to do in July 2021 — we can kiss any form of growth goodbye. This is why no serious growth agenda can afford to ignore the need for complementary social and economic policy measures to address basic needs and to keep hope alive. And this is why we can’t rely on growth alone to address the profound social impacts of unemployment, and why public employment is key.
In addition, however, there is the strong evidence that good social policy also contributes to inclusive growth.
This is why the policy debates actually taking place are not about a binary choice between growth and public employment programmes, but about what mix of social and economic policies can best address our complex challenges.
In the same week as Bernstein’s article, the department of social development was holding a policy colloquium called “From Grants to Growth” to address exactly these issues. This includes the relationship between social grants, which are vital to meeting people’s most basic needs, and complementary initiatives to assist people on pathways enabling greater levels of economic inclusion, such as public employment programmes (Peps).
At this colloquium, the focus was on the complex interplay between such interventions and growth in the creation of more and better jobs in the wider economy.
What role do Peps play in this? Certainly, they raise aggregate levels of employment, with all the social and economic benefits this brings. Within this, they also give people work experience when the labour market proves unable to do so in a context in which work experience matters for all kinds of reasons, including for productivity and hence the growth potential of the wider economy.
Key data highlights its importance. First, unemployed people with work experience are three times more likely to find employment than those without (Labour Market Dynamics for 2022, Stats SA 2023). The data also shows that people in short-term unemployment were more than twice as likely to transition into other employment as those in long-term unemployment.
Bernstein criticises public employment for being short term (even if the duration of work is often longer than many private sector jobs). This data, however, illustrates the important role even short-term employment can play in breaking the cycle of long-term unemployment.
For young people Peps often provide a first work opportunity in a context in which often they can’t get work because they’ve never had work.
Despite this, low labour market demand means that many participants in Peps are unable to transition into other jobs. There just aren’t any. In this context, there has been an increasing emphasis on how Peps can provide support scaffolding for participants to transition into livelihood and self-employment activities. While this is no silver bullet either — returns are often low — it’s nevertheless necessary to optimise whatever opportunities do exist.
At the colloquium, figures were provided from the Social Employment Fund (SEF), a presidential employment stimulus programme run by the Industrial Development Corporation. Last year, this part-time programme created public employment opportunities for about 50,000 people, often in very marginalised areas with low economic activity. Of these, 12,691 participants were supported to engage in complementary entrepreneurial activities, 5,835 new micro enterprises were established by participants and 6,162 existing micro enterprises were supported and mentored through SEF.
How far can Peps go in providing support scaffolding for such livelihood and self-employment opportunities? What design features best enable this? How might Peps augment the outreach of the existing small enterprise ecosystem, which is typically weakest in the most marginalised areas where Peps often have a presence?
These are some of the policy questions actually in play right now, with which Bernstein’s blunt binaries appear out of touch. Policy is tackling complexity, not crude wars of position. The bottom line is that instead of choosing between “growth” or “public employment programmes”, we need to use all the instruments at our disposal to address the crisis of unemployment — and to design these for optimal impacts and complementarity.
• Philip is programme lead for the Presidential Employment Stimulus
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