The reintroduction of President Cyril Ramaphosa’s “Emergency Social Aid” grant for the unemployed and unpaid carers who do not receive any other social assistance or unemployment insurance is an ideal time to introduce permanent basic security for poor and unemployed adults.
I prefer the basic income support argument rather than a universal basic income. Because South Africa already has social allowances for poor children under 18, poor older people over 60 and other vulnerable groups.
What is needed is a social protection instrument that counteracts the country’s pandemic by helping people aged 18 to 59 living in poverty – Basic Income Support.
The case for the basic income
There are at least five arguments in favor of basic social security. First, the moral case for helping the poor, which is also a constitutional right in South Africa.
Second, the positive economic effects: increasing the purchasing power of the poorest will create income multipliers and stimulate local economic growth and livelihoods.
Third are social solidarity and cohesion. The recent wave of looting in parts of the country, allegedly sparked by the imprisonment of former President Jacob Zuma, has also been an outburst of frustration and anger against a system that excludes millions of citizens who see no hope for their future.
The emergency social aid grant will alleviate some of this need and make everyone feel recognized and included.
The fourth argument for basic security is Covid-19. The pandemic and lockdowns hit poorly paid and informal workers and resulted in a government social and economic support package of R500 billion.
These interventions, though temporary, have highlighted the underlying problems of chronic poverty and unemployment, which receive too little political attention in “normal” times. This has led to these emergency aid measures being made permanent.
Finally, basic income support would improve the effectiveness of existing social benefits. Child benefit is intended to cover the basic needs of 13 million children in low-income households. Instead, that money is being diluted among the whole family because unemployed parents and caregivers also need food and clothing.
This is one of the reasons why child malnutrition has not decreased in South Africa after apartheid. Despite the introduction of the child benefit subsidy in 1998 and its subsequent introduction to two-thirds of all children by 2020, the child growth rate has stabilized in around one in four children since the early 1990s. Basic income support for low-income adults would make it possible to allocate more money for the child benefit subsidy for the needs of the child.
The procedure against the basic income
Two arguments often heard against the basic income relate to its supposed behavioral effects (“dependency”) and its costs (“unaffordable”). The first relates to the claim that money transfers make people lazy.
The myth of the lazy social welfare recipient has been comprehensively refuted in the socio-political literature. Nonetheless, influential commentators such as Mamphela Ramphele have recently argued that South Africans should lift themselves out of poverty through “self-liberating” hard work rather than relying on the “dummies” of social grants.
This derogatory view implies that poor people are lazy (they choose leisure over work, as economists say), that they prefer to live on handouts from the state, and that there are many vacancies waiting to be filled become.
This view does not correspond to reality. South Africa’s social benefits are too low to make a living from. They range from R460 per month for child benefit to R1,890 per month for old age and disability allowance. In addition, the economy is characterized by high structural unemployment. There are simply not enough jobs to accommodate the millions of unemployed job seekers.
People who argue against the basic income are in fact saying that unemployed South Africans who cannot find non-existent jobs should also be denied their constitutional right to social assistance by the state.
Is the basic income priceless?
The second argument against a Basic Income or Basic Income Support is the cost and claim that it is “unaffordable” or “unsustainable”.
It is true that it will be expensive. Even at low R350 per month (less than the food poverty line of R585 per month) if 10 million people apply for the special assistance (there are 10.3 million unemployed and discouraged job seekers, only a small minority of whom can apply for UIF) the cost would be down amount to R42 billion ($ 2.85 billion) per year. Where should this money come from?
One possible source is more efficient government. Reducing corruption, mismanagement and wasteful spending would free billions. A 2 to 3% cut in government spending would be enough to cover the cost of basic social security.
The second source of income is the tax increase. It’s never popular. If income tax is increased, the middle class will complain that it is already over-taxed. If corporate taxes are raised, companies will complain and some private sector jobs could be at risk. If VAT is increased, it will have a negative impact on both the poor and the better-off.
Nonetheless, South Africa is an upper-middle-income economy and one of the most unequal countries in the world. This suggests that there is a lot of scope for redistribution. And the gap between rich and poor South Africans is so great that more redistribution is a moral, social and political imperative.
A third way to face the cost of enhanced social protection is to stimulate the economy. The downside of the social policy success of the ANC government in building the most comprehensive and generous social protection system in Africa is the failure of its economic policies to generate broad-based economic growth that creates jobs for the poor. If this can be addressed, poverty will fall and the number of people receiving means-tested social benefits will fall in the years to come.
graduation
A comprehensive social protection system provides those in need of government support with adequate levels of social assistance and insurance when they need it.
R350 isn’t enough to make a living – and certainly not enough to make a recipient “choose leisure” instead of looking for work – but it’s a good place to start. But above all, now that the special aid money is back, civil society will campaign hard to bring it to an appropriate level – and to make it permanent.
This article was republished by The Conversation under a Creative Commons license. Read the original article.
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