OPINION: Public employment programmes vital to creating jobs in Covid-19 crisis
JOHANNESBURG - Public Employment Programmes have helped reduce poverty and unemployment in a numerous global economies and with the disruption caused by Covid-19 such programmes are pivotal in reviving our ailing South African economy.
Coronavirus has brought a number of challenges to communities both health as well as social disruptions, including the loss of income due to retrenchments and the widespread of closure of some businesses, especially small and medium enterprises.
Covid-19 has also magnified several challenges South Africa continues to grapple with including spatial differences, inequality, poverty and unemployment.
The gravity of this situation is underscored by National Treasury’s projections that the country may shed between 3-7 million more jobs due to the Covid-19 pandemic.
This is catastrophic for an economy whose investment-grade credit rating was only recently downgraded to junk status.
While history may not present us with clear-cut solutions to our problems, much insight may be learnt from past socio-economic policy experiments.
Lessons from history
During the time of Great Depression between 1929 and 1933, the US suffered massive job losses as unemployment peaked to its historical high of 25 percent. Franklin D. Roosevelt, the US president at the time, initiated the “New Deal”, which was mainly predicated on a public works programme and paved the way for state intervention in saving the collapsing economy.
The “New Deal” comprised: a) Civilian Conservation Corps, focusing on employing the youth and improving the environment; b) Works Progress Administration, which primarily focused on creating employment for all who were eligible through the construction and arts industries; c) National Recovery Administration, which developed a regulatory framework that assisted in the revitalization of industries and ultimately led to the development of the Social Security System. This programme helped a lot in reducing unemployment and addressing some of the social and economic challenges the US faced.
These implantation of public works programme interventions are not limited to established economies, but even developing countries have also implemented such interventions with degrees of success.
For example, India’s Mahatma Gandhi’s National Rural Employment Guarantee Act (MGNREGA) passed in 2005 – labour law and social security measure aimed to guarantee the right to work – can be viewed as one version of such interventions. Under the Indian programme, households were guaranteed 100 days of wage employment a year.
The most important feature of this programme has been promulgated by act of Parliament and it’s a rights-based framework. Preference is given to women and labour-based methodologies are the promoted delivery options. Since its inception, the programme has benefited more than 55 million participants. The intervention has been hailed as the most successful public employment programme.
Covid-19 economic crisis
The current situation in South Africa may not be identical to what happened in the US nearly a 100 years ago, nor are our levels of unemployment anywhere near to those in India, but a key policy lesson from these two examples is that in times of deep crisis state intervention becomes inevitable and necessary.
Within the context of Covid-19 challenges, the introduction of the stimulus package providing social relief to the unemployed, increase in social grant for both the elderly and children, Unemployment Insurance Fund payments to assist employers who are unable to pay salaries and also relief to small companies in distress put paid to the notion that the state has no place in the business in business and that everything should be left to the markets to correct.
Such neo-liberal thinking fails to grasp the indispensable role the state can play in breathing dear life to an economy that’s nearly on its last legs.
Similar to the “New Deal” programme and MGNREGA, the South African government has a flagship programme in the form of the Expanded Public Works Programme (EPWP), which aims to optimise work opportunities for the poor and unemployed through the implementation of labour-intensive projects.
The idea is simply to reduce the use of machinery and employ more people where it is feasible and realistic.
All spheres of government and all public bodies are expected to implement the EPWP by employing locals, so that people can earn an income and be able to meet their basic
However, unlike the MGNREGA, the EPWP was not promulgated through a legislative process, and still depends on the appetite and consciousness of each departments and municipalities.
The Covid-19 pandemic has brought unimaginable change in the world order, which means that it can no longer be business as usual, and government new policy instruments and repurpose existing ones to respond effectively to the deadly challenges brought to the fore by the Covid-19 pandemic.
The number of Covid-19 positive people continues to rise exponentially at an alarming rate day after day, with the Western Cape being the province recording the highest infections rates, followed by Gauteng, KwaZulu-Natal and the Eastern Cape, respectively.
The common denominator here is that in the highly effected provinces, there are densely populated metropolitan municipalities which are epicentres of the virus, a situation that is compounded by inequalities in access to health care and general socio-economic deprivation.
Experience has shown that the EPWP can create jobs and reduce poverty. This could be achieved if government departments and municipalities could prioritise labour-based methods when designing and implementing projects, an example being roads maintenance projects.
Such projects are able to follow the necessary health protocols such as the observance of social distancing.
One of the sectors hardest hit by Covid-19 is the tourism and hospitality, which has in the past contributed so immensely to the job creation.
However, the pandemic has provided us with an opportunity to re-prioritise the budget towards programmes that will provide social services to the Covid-19 ravaged poor communities.
Such interventions would entail the provision of Home Community Based Care Programmes, Community Health Care Workers for tracing and screening and Covid-19 related awareness campaigns through EPWP participants drawn from local communities. Communities understand and appreciate to be served by their own, thus it is important to employ local labour.
While public employment programmes may not be creating sustainable jobs in the long run they, however, have been proven to be effective policy instruments to reduce poverty through the income transfers.
The Covid-19 pandemic presents an opportunity to use public employment programmes, not as a silver bullet, but as a much-needed cushion to communities whose livelihoods have been destroyed by the pandemic. They sure deserve a “New Deal”!
The examples of US and India prove that it is possible to implement programmes intended to reduce unemployment and poverty, especially in times of crises.
With the government having the largest budget portfolio, the state should legislate public employment programmes and mandate government departments and municipalities to re-prioritise their budgets towards labour-intensive projects and other initiatives, minimize use of machinery and employ locals so as to mitigate against the poverty and unemployment challenges that have been worsened by the Covid-19 pandemic.
Luzuko Gaxamba works in Department of Public Works in the Eastern Cape. The views expressed here are his own.