Last year, South Africa’s budget and unemployment data were set to drop in the same week. However, at the last minute, the latter (which has a huge historical impact) was postponed, creating a good distance between the two. This changed easily in the news cycle with the Russian invasion of Ukraine.
The unemployment data is now scheduled to be published next week. It’s a print I fear and love for equal reasons – because, compared to other economic data, it tends to give a good reading of the economy’s whimpering pulse.
Like many others, in the past month I have read the data through quite simplistic terms: jobs in versus jobs out.
But lately I’ve been thinking about how the economic crisis in South Africa is robbing us of more than just jobs. It has also limited the depth of dreams and reduced capacity for care. These are two underestimated elements of a healthy economy, which should influence labor-related reforms.
It is interesting to see the situation of the South African labor market next to America, which is in its own crisis, very different.
Over the past two years, the US labor market has been shaped by the so-called “Great Retirement” – a trend, predicted by academic Anthony Klotz, that has seen millions of Americans stop working after the pandemic economic crisis.
With their pockets stuffed with stimulus checks and unemployment benefits, and after confronting the power of capitalism, many workers are questioning the virtues of work. The result is that there are more jobs in the US labor market than there are workers willing to do the jobs. And with this supply-demand relationship out of balance, wages are rising at the fastest rate in decades.
Like the Great Depression before it, this phenomenon signals a crisis of capitalism and an opportunity to reorganize it.
This level of cessation, American journalist Derek Thompson wrote of Great Resignation, “is an expression of optimism that says, We can do better”.
“Since the 1980s, Americans have been quitting, and many are desperate for bad jobs because they fear that the safety net won’t support them when they find a new one. But Americans seem to have done it by staying.
Others call this phenomenon the “Great Realignment”, which causes employers and workers to reevaluate their priorities. In other words, this “crisis” provides many opportunities to dream about another future of work.
Compare the US case with the South African labor market, where there is a labor shortage and wages have fallen significantly.
In these conditions, work is not a dream – a good reason to spend your days doing something that, as Marie Kondo says, “sparks joy”. However, it is a means to an end. Not only do you want to find a job because you want to live, but when the job is guaranteed with compassion, the benefits are also enough to live on.
On top of this, there are many jobs that have no attention for humans to do. As in the US, people increasingly feel that their jobs are not commensurate with their well-being. However, in South Africa they have no choice but to stay.
Worryingly, the oft-touted solution to the country’s bitter unemployment crisis is to make the labor market more unforgiving through deregulation.
Employers, proponents of this approach suggest, should be able to fire workers free from legal or union interference, hire without equity restrictions and set wages low enough to maximize profits.
But there is a human cost to all this. And, like it or not, the economy is highly dependent on people – for their skills, knowledge and propensity for innovation. And although jobs, as we have learned, have a tendency to suddenly disappear, we continue to have the wealth of people.
So instead of taking a rather brutal free market approach, can we do the opposite? We have to work.
After all, there is an economic approach elsewhere that pays attention to its center. I am definitely referring to the Nordic model, which, among other things, puts special emphasis on giving women, who can be used in unpaid care work, more freedom to participate in the economy. This is achieved by giving them, and their partners, longer parental leave and free childcare, it is believed.
The logic implicit in this type of model is that there are many jobs, only people are not paid to do them – and people who do, for free, can better use their time to do them. something that brings him closer to his dreams.
This is an important model to cite because one of the main lessons taught by the bloodshed caused by Covid and the Great Resignation is that women tend not to work anymore.
But this kind of policy requires a government that is imaginative and willing to implement it. They also require efforts from these governments to increase the share of the public sector in the economy, rather than shrinking it.
This, I guess, brings us full circle – for the budget. Because, more often than not, changing the shape of our economy to speak more to our humanity requires public spending.
A true understanding of the depth of the unemployment crisis in South Africa, which also considers all the lost dreams behind the astonishing number of jobs, means that creating some kind of stimulus is really easy.
Indeed, many years ago have warned that the discontent that grows due to a very high unemployment rate leads to the risk of social upheaval, the Arab Spring at home stronger than the riots of July 2021. This is because, after all, if you have an economy with the market dog-eat-dog labor, the expected result is that eventually the dog will eat the dog.