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The State must act urgently to save jobs during Covid-19

By ANA Reporter Time of article published Apr 10, 2020

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The mounting strain on businesses due to the lockdown to curb the spread of Covid-19 - a move the South African Reserve Bank said could cost at least 370 000 jobs and see 1600 businesses go under - requires urgent government action, the Institute of Race Relations (IRR) said.

Last week’s spike in US unemployment claims to a staggering 6.6 million should serve as a warning to South Africa, which entered the pandemic on a much worse economic footing, IRR analyst Nicholas Babaya said.

Anxiety among employers and employees was heightened by speculation that the 21-day lockdown could be extended, Babaya said.

South Africa’s unemployment rate was nearly 30 percent, and the government has promoted small businesses as key to creating jobs, but these are likely to be hardest hit by the lockdown.

The IRR said to save lives and livelihoods, the government should, among other measures, do away with the concept of “essential services” and allow any business to trade if doing so posed no serious public health risk, reform labour regulations to “price workers into jobs”, and cut wasteful public-sector spending.

“South Africa entered the pandemic in a far weaker condition than most other countries. Even without the 21-day lockdown, the country would be in a precarious economic position,” Babaya said.

“But the lockdown has sharply intensified the strain, and there is a risk that if economic pressures are not addressed, non-compliance with isolation measures will grow as people, driven by desperation, ignore or disobey them.

“If measures intended to prevent the spread of the virus end up tipping South Africa into an economic depression, with millions thrown out of work, such measures will likely prove to be no solution at all,” he warned. 

African News Agency (ANA)

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