It is vital R350 social grant is maintained

SOUTH Africa’s youth unemployment has grown to a state of such dysfunction that it will be a key constraint in any future path that is taken, and it could destroy the fabric of our democratic dream, unless sufficiently large interventions are taken immediately.

The only rational mandate Cabinet can give the finance minister for the MTBPS is to make the R350 permanent and universal and create a real employment policy.

South African youth unemployment sits at a staggering 72% of people aged 15 to 24 who are not in education.

The global rate is 13.6%, while the African rate is 10.6%.

And each year, according to the presidency, about 67% of 1 million youth enter the labour market detached from any learning or work.

Unemployment is a corrosive cancer that undermines individual sense of worth and prevents the critical transition from adolescence to adulthood.

Unemployment stops the transmission of knowledge and experience; it essentially deskills a nation.

Unemployment also reduces the personal income tax base, which means lower revenues for state institutions like schools and clinics – generally for the poor. Unemployment severs the trickle-down effect that neo-liberals like to talk about.

Trickle down of wealth is meant to operate by GDP growth creating jobs and so salaries or wages trickle down into the poorer households that don’t benefit from profit shares of the wealth. But if there is no employment, and no social security income replacement system, there is no income and so there is no money to spend.

According to the International Labour Organisation’s (ILO) Programme on Youth Employment, in developing countries up to 75% of youth employment is in the informal economy. In Nigeria, that is 95%.

Nigeria, with a population of 199 million people has an incredibly high youth bulge. In fact, 72% of its population is under 30, but just 35% of its youth are officially unemployed. The Nigerian Youth Employment Action Plan (2021 to 2024) was developed to address two concerns – to reap the productivity that is lost when people are excluded from the labour market, and to reduce the risk to national security and development that is posed by a high youth unemployment rate.

South Africa’s dilemma is similar. The wake-up call for the state woefully seems to have been triggered by National Treasury’s instruction to the rest of government to move the 12.4 million people who applied for the R350 Social Relief of Distress grant in June 2022 off the grant.

There are mixed feelings about what is leaking out of the Presidency and Treasury’s closed policy discussions. The secrecy of the process flies in the face of the ILO’s standards of employment policy making – open participation. From a policy perspective, the principles that need to guide government’s work are clear.

Fundamentally, do not confuse purpose. The R350 grant is less than half of the Food Poverty Line – make it available to everyone, so we know at least that all South Africans are getting some food each day. Those who don’t need it won’t claim it. Sars can find the space to pay for it in a variety of ways that includes stopping illegal profit shifting overseas, reaping commodity price gains, introducing a wealth tax, and freeing up some of the Public Investment Corporation funds.