KATE PHILIP: Building a society that works: the growth case for public employment programmes

Articles on unemployment in SA often say it creates a “tinderbox” for our society and emphasise the need for inclusive economic growth to create sustainable jobs. Certainly, that is the priority.

Right now though, there are constraints on our growth potential. Inclusive growth is going to take time. We don’t have time. The real risk is that while we wait for the Godot of growth, the tinder ignites and the prospects for growth any time soon go up in a puff of smoke. 

To avoid this we need to create employment right now. Public employment programmes offer a simple, tried and tested mechanism for doing so. For example, since October 2020 the Presidential Employment Stimulus has delivered more than 1.4-million high-quality jobs and livelihood support opportunities, reaching parts of the country that private sector jobs rarely do. This demonstrates just how quickly such solutions can be deployed, at scale.

The growth case for public employment programmes goes further than just the social stability argument though. Such programmes can also contribute to labour productivity, overcome barriers to labour market participation, support entrepreneurship, create forms of public value vital to growth and act as an economic stimulus in the economy too. 

In terms of labour productivity, long-term unemployment is associated with a deterioration in both hard and soft skills. The longer people are unemployed, the more unemployable they become. They lose — or fail to gain — work skills such as time management, task management, team work and accountability. They also lose out on access to the networks, information and structure provided by participation in work.

At the scale of our multigenerational unemployment we can assume that the effects on productivity are systemic, acting as a brake on growth. In this context public employment programmes can act as a circuit-breaker. They can contribute to turning this around, as part of building a society that works. 

Low levels of labour productivity also limit the willingness of employers to hire. Youth now bear the brunt of this, with employers complaining that the costs and risks of providing first work experiences are too high. This traps young people into a vicious cycle in which they cannot get work because they have never had work.

Programmes like the Basic Education Employment Initiative — a flagship programme of the Presidential Employment Stimulus — help to break this cycle. Right now 242,000 young people are getting high-value work experience as education assistants in more than 23,000 schools across the country. This is derisking youth employment for the private sector, at scale. 

Work experience also matters for self-employment and entrepreneurship. Strategies to address unemployment place great hopes on the role of these. Yet across a range of different countries and contexts — including SA — evidence shows that entrepreneurs with work experience are more likely to succeed. If we want a bigger pipeline of successful entrepreneurs, we need to provide greater access to quality work experience than our labour market is doing. 

Deliberate design of public employment programmes can further enhance the scope for transitions to livelihood and enterprise activity. The Presidential Employment Stimulus is exploring ways of doing so. 

First, in the Social Employment and Youth Service programmes work is part time. This provides a secure base and a springboard from which participants can engage in complementary economic activity. Early-stage entrepreneurship is high risk; access to regular part-time work can help derisk it. In addition, some participants manage to use their wage income — small as it is — as seed-capital for such ventures.

Second, in the waste sector a hybrid model has used public employment to mobilise community participation in waste separation at source. This creates the minimum volumes required for viable recycling enterprises — a catalytic, market development effect. 

In addition, support has been provided to strengthen precarious livelihoods and jobs. Over 175,000 production input vouchers have been issued to subsistence farmers, directly supporting their growth. In the creative sector, Presidential Employment Stimulus funding has supported over 70,000 jobs from the creation of new work, with growth effects derived from the incomes generated from royalties, rights, ticket sales and more. 

The public goods and services provided through the work performed also often have growth effects, across a spectrum that includes infrastructure maintenance, inner city revival, early childhood development and much more. Environmental services such as wetland restoration and catchment management create jobs while delivering more and better-quality water — vital to life, but also a direct requirement for economic growth. 

In the Basic Education Employment Initiative real potential is emerging for school assistants to help improve educational outcomes. In 120 schools in Limpopo, for example, Funda Wande selected, trained and mentored teachers’ assistants. By term three, grade two pupils in supported schools were about 1.25 years ahead of control schools in both literacy and numeracy.

Research is under way to measure the effect teachers’ assistants can have in relation to phonics, reading for meaning, maths and science. With poor education outcomes a major constraint on growth, the Basic Education Employment Initiative offers an unprecedented opportunity to help move the dial. 

Finally, these programmes deliver important economic stimulus effects. The injection of wages and procurement into local economies supports local enterprises, with multiplier effects rippling through the economy as a whole, supporting jobs in range of domestic industries and adding to GDP growth.

For public employment programmes to contribute optimally to these potential outcomes, well-designed and well-managed programmes are required. We have these. Let’s build on them. 

• Dr Philip is programme lead on the Presidential Employment Stimulus.