It’s about jobs, stupid

Much has been made in recent years of the inequality in South African society, with many pundits citing the calculations of the Gini coefficient as irrefutable proof that we are the most unequal society on earth. And, of course, politicians have adopted the word to signal all that is wrong in South Africa, with their usual empty promises to tackle the issue.

But here’s the thing: in the same way that the presence of pus in an open wound is merely a visible sign of an underlying infection, so is inequality not the “thing” that politicians and the chattering classes make it out to be. It is, rather, merely a visible sign of a much deeper problem. And that problem is unemployment.

Simply put, if you get rid of unemployment you will also go a long way to getting rid of inequality. Because if the entire working population of the country has meaningful jobs they will have the wealth ~ however little that may be ~ to spend their way up the socio-economic ladder. So instead of a society where there are relatively few “haves” (who have an awful lot) and many, many “have-nots” (who have absolutely nothing), you will have a society with many more “haves” and relatively fewer “have-nots”.

So addressing unemployment is the key (and it is for a whole number of reasons apart from the inequality). Tito Mboweni knows this. Lesetja Kganyago knows this. And just about every economist, banker and industrialist knows this. And, even a few politicians know this. It’s only the socialists, communists, trade unionists and the rabble-rousers of the EFF and the ANC who seem not to grasp the idea.

At this point it’s probably worth pointing out that there’s a difference between a paying job and what the government proudly punts as a “work opportunity”. You have a job when you sell your labour to somebody or some organisation that uses that labour in the production of something, or performance of some service, that generates income upon the sale of that something or service.

You have a work opportunity when you are employed by the state and your efforts are rewarded with a payment made from monies collected from taxpayers. Because these are not revenue-generating (as in profit-making) activities the state must rely on the compliance of taxpayers to cough up the funds to keep these workers in their positions. Such workers may be seen in their thousands in their orange overalls emblazoned with the letters EPWP across their shoulders skoffeling ditches or cutting grass on the roadside.

(As an aside, it is worth observing that the government would argue that because such workers use the monies they receive to buy goods and services they are contributing to the overall GDP through their consumer spending and this is indeed true, in the same way that the 17-odd million recipients of social grants contribute to the GDP every time they spend their grants on food, clothing, rent, transport etc.)
No, it’s proper jobs we need, and lots of them. And far be it from us to pooh-pooh President Ramaphosa’s dream of a whole new Fourth Industrial Revolution megacity and a brand new multi-billion rand high-speed rail line to Durban, but if he wants to create jobs ~ fast ~ there are a couple of low-hanging fruits available to him ~ that don’t even involve Chinese investors.

  • Firstly, go all-out to encourage tourism. We have a vast underutilised resource here. Beauty spots abound in our country, hotels and lodges have many empty bed-nights, our food is generally far better than we give ourselves credit for, our drink is ridiculously cheap (and damned good) by international standards, and our serving staff are as sunny, welcoming and efficient as anywhere else in the world. The government’s sole contribution to this initiative could be accomplished at the stroke of a pen, simply by scrapping its visa laws, which are simply a bureaucratic impediment to free movement of people.
  • Secondly, build things and rehabilitate stuff that’s already there but which is falling, or has fallen, apart. If the government did nothing more than rehabilitate the rail network, reopening now-abandoned routes (even leasing routes to private operators), investing in modern signalling infrastructure and reliable rolling stock, refurbishing old stations and opening new ones, it would enable the cheap, quick and efficient transportation of millions of tons of goods and thousands of commuters and long-distance passengers. And in the process all this activity will generate the necessary demand for a whole raft of additional activity. Gravel for track ballast, concrete for sleepers, steel for rails, wheels and rolling stock, cable for power and so on.
  • And then there’s the renewable energy sector.

What a stimulus for the economy these three sectors could be! What a stimulus for job creation! And what an effect that would have on our unequal society!

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