Jobs fixation ignores grassroots energy

stevenfriedmanSA is unlikely to make real headway in dealing with poverty until grassroots economic activity is taken much more seriously than it is now.

Sadly, the people who need “radical economic transformation” most are least likely to get it. This is not surprising. In this country’s debate, the poor are targets of many kind words but much less action.

One aspect of the state of the nation address that passed unnoticed is something it did not say about “radical economic transformation”. Earlier statements by the ANC claimed that “township business” was a priority for change; the address ignored this issue. The nearest the government came to talking about it was a claim by a minister that infrastructure would be developed in the townships. This is necessary, but falls far short of a plan to stimulate economic activity on the ground.

This suggests that, despite the promises, this is simply not a priority.

The phrase “township business” is — or should be — shorthand for a problem usually hidden in the debate on jobs and growth. Across the board, the voices who shape how we think about the economy assume that the core priority is to reach the day when millions who are now not active in the economy because they are jobless will be working in shops, offices or factories. That is why everyone has a plan to create millions of jobs.

This way of thinking has become so ingrained that few people stop to notice how out of touch with reality it is. There is no way we are ever likely to return to the days in which just about all adults worked in formal workplaces. The trend around the world is for formal jobs to be lost, not added, because of new technology. The hope that this can be reversed here in the foreseeable future is fanciful.

Nor are the unemployed necessarily unproductive. One reason why so many mainstream voices talk about creating millions of formal jobs is that they all believe respectable economic activity happens only in air-conditioned offices or formal factories. This is a prejudice inspired by the fantasy, shared across the spectrum, that one day we shall all live like whites did under apartheid. It does not recognise that in townships and shack settlements, many people, in very difficult conditions, find ways of feeding themselves and their families. Instead of rejoicing in this grassroots energy and innovation, the mainstream dismisses it as a problem.

Since formal jobs are not a prospect for millions, many people who could contribute to the economy will remain excluded until and unless policy is serious about stimulating grassroots economic activity by linking it to formal business and giving it the support it needs to grow. This may mean ensuring poor people live far closer to the economic action and spending on support for grassroots activity: despite the claim that social grants force people into dependency, they have helped to stimulate grassroots economies. Similar measures would increase this effect.

Why, then, is this issue such a low priority? Because in most societies, priorities are set by the people who are organised and have a voice. Here, the people who need inclusion are neither, and so they are talked about but never heard. “Radical economic transformation” is punted by both of the main ANC factions because both have an interest in insisting they are trying to change the economy. But neither sees stimulating economic activity among the excluded as an important goal.

The patronage faction has no interest in encouraging people on the ground to contribute to the economy and to work themselves out of poverty. Its rhetoric aims to help the connected into the economic elite, not to enhance the economic power of outsiders. Patronage thrives when people are economically dependent: if many more people were able to make their way into the economy, far fewer would need to offer politicians their support in the hope of grasping an economic lifeline. So, it is not in the faction’s interests to encourage grassroots people to do without it.

Its opponents are hampered by the prejudices mentioned here — they cannot look beyond the formal economy and those who work in it. If grassroots economic reality gets a mention, it is seen as an embarrassing sign of our failure to create enough formal jobs.

And because there is no strong, organised lobby that speaks for people making a living outside the formal economy, this ensures that, while some politicians talk about the problem, there is no sign of concrete national action to address it.

To expect this to change until and unless people in the grassroots have a louder voice may be naïve. But SA is unlikely to make real headway in dealing with poverty until grassroots economic activity is taken much more seriously than it is now.

Business Day 22 February. BY: STEVEN FRIEDMAN

Friedman is research professor in the University of Johannesburg’s humanities faculty. You can view the original publication here.

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