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People queue for Covid-19 Ters benefits at the Unemployment Insurance Fund offices in Johannesburg. File photo: GALLO IMAGES/FANI MAHUNTSI
Unemployment of the magnitude experienced in SA is really a moral matter that demands urgent and substantial action. We are unnecessarily excluding the more than 12-million unemployed from participating in the money economy.
The government could offer a job — referred to as a job guarantee — to anyone who is willing and able to work. This would have an enormous influence on morale in the country, as well as reduce crime.
The benefits of actual work far surpass the receipt of a social grant. The positive effect on children seeing parents go to work and earn a salary is just one of them.
The notion that tax revenue must equal expenditure is true when there is full employment. Any further spending without equivalent taxation will result in inflation. But right now we are nowhere near full employment. We can spend a great deal more than is brought in through taxes. There is plenty of “fiscal space”. Inflation will not be a threat. We can afford a job guarantee.
Such a scheme takes time to implement, but the private sector will expand in response to increased demand, employing more people as it does so. Those still unemployed will indeed require support in the form of a basic income grant (BIG) as an interim measure.
This too is affordable as long as we can produce the needed resources. Real resources are the constraint on the economy, not money.
Any job that increases the public good is included in a job guarantee: refurbishment of railway stations and schools; rehabilitation of environmental degradation; care for the elderly poor and countless more. The jobs are there, waiting for people to tackle them.
Before dismissing the concept of a job guarantee, readers should consult the literature. A report by Prof Bill Mitchell, “Assessing … the Expanded Public Works Programme in SA” is a good place to start.
Howard Pearce, University of Cape Town
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Job guarantees the way forward
Unemployment of the magnitude experienced in SA is really a moral matter that demands urgent and substantial action. We are unnecessarily excluding the more than 12-million unemployed from participating in the money economy.
The government could offer a job — referred to as a job guarantee — to anyone who is willing and able to work. This would have an enormous influence on morale in the country, as well as reduce crime.
The benefits of actual work far surpass the receipt of a social grant. The positive effect on children seeing parents go to work and earn a salary is just one of them.
The notion that tax revenue must equal expenditure is true when there is full employment. Any further spending without equivalent taxation will result in inflation. But right now we are nowhere near full employment. We can spend a great deal more than is brought in through taxes. There is plenty of “fiscal space”. Inflation will not be a threat. We can afford a job guarantee.
Such a scheme takes time to implement, but the private sector will expand in response to increased demand, employing more people as it does so. Those still unemployed will indeed require support in the form of a basic income grant (BIG) as an interim measure.
This too is affordable as long as we can produce the needed resources. Real resources are the constraint on the economy, not money.
Any job that increases the public good is included in a job guarantee: refurbishment of railway stations and schools; rehabilitation of environmental degradation; care for the elderly poor and countless more. The jobs are there, waiting for people to tackle them.
Before dismissing the concept of a job guarantee, readers should consult the literature. A report by Prof Bill Mitchell, “Assessing … the Expanded Public Works Programme in SA” is a good place to start.
Howard Pearce, University of Cape Town
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
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