Unemployment is here to stay: that’s our starting point

In the wake of this month’s violence a debate about social security has once again come to the fore. In the long term it is probably the most important debate SA will have.

But the manner in which it is playing out on these pages makes my heart sink. Part of the problem is the binary way in which it is framed — should SA have a basic income grant BIG)? Asking the question this way seems to bring out the worst in everyone.

And so we are told, for instance, that we can either invest in the future or in welfare, not both; that people don’t need indefinite grants but the means to stand on their own; that we must instead spend scarce resources on the root cause of structural poverty: unemployment. I am paraphrasing three of this newspaper’s finest columnists, who are all saying much the same thing. It doesn’t take much thought to see that there is something profoundly wrong in what they say.

In the late 2000s, at the height of the commodities super cycle when SA’s economy was booming, unemployment dropped briefly to a low of 22%. Nearly one in four people who wanted work could find none, and that is when things were really good.

Will unemployment drop to 22% again in the next decade or two? Maybe. Will it ever get significantly lower than that, down to 7%-8% say? Only in prayers and dreams. SA started bleeding jobs in the mid-1970s. It has been bleeding jobs ever since. Look at the graphs and it is as clear as daylight.

Over the last 45 years the rise in the unemployment rate has at times stalled, at times even reversed a little. But the deep trend is clear. It hasn’t mattered who has been in power or whether our political system has been apartheid or democracy, or whether the economy has been booming or in recession — we cannot employ everybody. We can’t even come close.

What does it mean then to say that we cannot invest in the future and in welfare? It is to imply that at least a quarter of the working-age population don’t belong in the future. It is to tell them they have fallen out of the social contract, that their presence among us no longer leaves a mark. What should they do with that sentiment? Where does it leave them?

It may be painful to internalise the fact that high rates of unemployment are permanent. But the moment we are brave enough to stare it in the face, the calculus changes. Matters of distribution become as important as matters of growth, for we know that growth alone leaves too many behind.

To frame the debate as we have — should we have a BIG, yes or no? — is to fail monumentally in the most urgent intellectual task of our times. We should be thinking as creatively as possible. If basic income is unaffordable, what is? In a country where growth is anaemic and sovereign debt high, how do we execute the duty to offer millions of our people meaningful lives? Is it a long-term, means-tested unemployment benefit? Or is it something else entirely?

So many debates are afoot elsewhere. In the US the idea of distributing capital rather than income, or a combination of both, is raging in the pages of journals. The idea of a significant lump-sum payment at the start of every adult life is also undergoing a revival. The possibilities are endless if the will to imagine them is there.

If there is a country on the planet that ought to be fielding creative ideas in the pages of its premium business daily, it is SA. To say, yet again, that the root cause of poverty is unemployment is to speak from another place at another time.