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ABSTRACT
Waged work is widely seen as a sufficient basis for meeting basic needs, achieving social inclusion and realizing essential social rights. Yet waged work that provides a livable income on reasonably secure terms is rare in ‘developing’ economies and increasingly scarce in ‘developed’ economies. This trend is likely to persist and worsen as the disruptive impacts of economic volatility and climate change intensify and labour market restructuring continues. Aggravating the impact is the diminishing access to livelihood options outside the wage economy. South Africa is an extreme example of this trend, with a very large proportion of the working age population superfluous to the formal economy, high levels of poverty and severe inequality. This paper describes this crisis at the global level and then specifically in South Africa, before considering the option of a universal basic income grant (UBIG). It examines the critiques and the potential merits and risks of such an intervention. To realize its transformative potential, a UBIG would have to be deployed as part of a broad transformation strategy that is led by an active state and driven by a mobilized civil society.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 Only in Latin America and Caribbean did a significantly contrary trend occur, starting in the early 2000s and continuing until the global financial crisis at the end of that decade. That uptick in the employment rate was associated with the pro-poor interventionist policies of the so-called pink tide of left-wing governments in Latin America during that period. Levels of both poverty and inequality decreased during that period, notably in Brazil and Argentina. See Berg (Citation2010) for an analysis of the contribution of formal employment to poverty reduction in Brazil during the first decade of the 2000s.
2 Persons in unemployment are defined as all those of working age who were not in employment, carried out activities to seek employment during a specified recent period and were currently available to take up employment given a job opportunity.
3 Official definitions of employment generally present cosmetic pictures of reality. The definitions tend to be elastic, allowing for people in tenuous and fleeting forms of work to be counted as ‘employed’. In South Africa, for example, people who report earning an income from ‘hunting’, ‘begging’, washing cars on the street or growing their own food are tallied as ‘employed’.
4 ILO nomenclature now separates ‘developing’ and ‘emerging’ economies; this paper combines the two categories and refers to them collectively as ‘developing’ economies or countries.
5 Trapp’s analysis (Citation2015) shows a decrease in the labour share of income in all regions between 1990 and 2011, except for South Asia (based on data for only Bhutan, India and Sri Lanka), where it increased slightly.
6 Using a data set from 1960 to 1997, Anne Harrison (Citation2002) split her sample of over 100 countries into two groups. Her data showed that, in the group of poorer countries, labour’s share in national income fell on average by 0.1% per year from 1960 to 1993, with the drop accelerating after 1993, to an average decline of 0.3% per year. In the richer sub-group, the labour share grew by 0.2% per year prior to 1993, after which it fell by 0.4% per year.
7 Cambodia, Indonesia, the Philippines and Vietnam have tried to capitalize on those trends, but weak supply chains and transport networks, a lack of economies of scale and shortages of skilled workers have held back wholesale shifts of production in their direction.
8 Their model predicts that most workers in the transportation and logistics sectors, along with most office and administrative support workers, and workers active in production, are at risk. Jobs in construction, journalism, hospitals and pharmacies are also on the ‘endangered’ list.
9 There are some localized exceptions to this trend, notably in parts of South America and East Asia (particularly China). But in almost all of the industrialized world, the former Soviet Union and its satellites, Africa, south Asia, the Caribbean and Central America, workers at best have been fighting rearguard actions.
10 The percentage of the population living at or below the lower-bound poverty line (LBPL) decreased from 51% (2006) to 48% (2009) to 36% (2011) and then rose to 40% (2015). In absolute numbers, there were about 22 million South Africans living at or below the LBPL in 2015, compared with 24 million in 2006. See Statistics SA (Citation2016a). The upper-bound poverty line (UBPL) is the income threshold at which individuals have just enough income to purchase basic food and non-food needs. For 2015, the UBPL was set at ZAR 992. Calibrated against the consumer price index, it was projected to increase to ZAR 1138 in 2017. The lower-bound poverty line (LBPL) used by Statistics SA is a marker for distress. Individuals at or below the LBPL do not have enough resources to purchase food and essential non-food items; they have to sacrifice food if they need to obtain basic non-food items. For 2015, the LBPL was set at ZAR 647. Calibrated against the consumer price index, it was projected to increase to ZAR 758 in 2017 (Statistics SA, Citation2016a).
11 Generally, income redistribution tends to be drawn from the bottom 40% of income earners, since the middle classes usually have the political capacity to defend their income shares. SA is an exception. The poorest 40% of South Africans have been so radically expropriated that they’re a very minor source of redistribution for the richest 10%; there’s virtually nothing left to squeeze. This is the outcome of 300 years of colonialism, 40 years of apartheid policies and persistent unequal conditions since the formal end of the apartheid system in 1994. Worsening inequality since 1990 has been due largely to redistribution from the middle- and upper-middle-classes. See Palma (Citation2012).
12 Does this trend apply to both formal and informal sector workers? The inclusion of a question on the formality of employment from 2010 onward in the General Household Surveys provides a limited data set that points in a surprising direction. The informal sector accounts for about one-fifth of the total workforce. Informal sector workers were much more likely to be poor (their headcount poverty rate was 46% in 2010 and it decreased to 41% in 2012; for formal workers it stayed steady 17%). So the risk of poverty decreased significantly between 2010 and 2012 for informal workers but there was no change for formal sector workers. See Rogan and Reynolds (Citation2015).
13 Recipients must be a South African citizen, permanent resident or refugee, and must live in South Africa.
14 It may be advisable to absorb some entitlements into the UBIG (such as the old-age pension), but it is vital that the free provision of public goods such as basic health-care services, school education, and access to free sanitation, water and electricity entitlements for the poor continues and are not dissolved into the UBIG.
15 A basic federal minimum wage would be provided to any family, with new workers able to keep the first US$60 a month of outside earnings with no reduction in benefits, beyond which the family assistance supplement would be reduced by 50 cents for each US$1 earned.
16 The poverty gap refers to the total income shortfall of households living below the poverty line. A narrower poverty gap means more households would edge closer to, or above the poverty line.
17 The claim was moot. In the 2005/2006 financial year, for example, revenue collection exceeded budget estimates by ZAR41.2 billion (US$5.2 billion at the time), which prompted R19.1 billion (US$2.4 billion) in tax cuts in the following financial year. A R100 monthly income grant paid to each of the 47 million South Africans would have cost R56.4 billion in that year. See Marais (Citation2011).
18 Cited in Terkel (Citation1972).
19 In both the United Kingdom and USA, growing proportions of people receiving welfare benefits have some form of employment.
20 ‘Linked’ or ‘associated’ because the causality is not clearly established. Studies in New Zealand, for example, have found that being unemployed was associated with a twofold to threefold increased relative risk of death by suicide, compared with being employed. However, at least half of this association might have been attributable to confounding factors such as mental illness.
21 Eban Goodstein has shown, for example, that the relative generosity and lack of conditionality of welfare regimes in western Europe tended to result in less political opposition to environmental restructuring in those countries, compared with the United States.
22 The Swiss UBI Initiative estimated the total annual cost at CHF208 billion per annum, of which CHF190 billion would be recovered in that manner. This would leave a shortfall of CHF18 billion (equivalent to 3% of GDP), which could be covered through a small increase in value-added tax or environment- and automation-related taxes.
23 The age disaggregation used by Statistics SA divides into 5-year intervals and therefore does not segment at the 18-year mark. The 35.2 million figure is based on the mid-2015 official estimate of 33.2 million people 20 years and older and 5.1 million people aged 15–19 years (which suggests about 2 million people aged 18–19 years).
24 This is one of the reasons why Andre Gorz resisted regarding reproductive and domestic labour as merely unremunerated forms (of what should be) waged work. He argued that reproductive labour is invested with qualities that make it profoundly different from most waged labour, not least because it is among the only examples of ‘work-for-oneself’ that survived industrial capitalism. The oppressive aspects of domestic labour, he argued, could not be entirely removed, but could be relieved if more time were available to do the work, and if the work were divided more equitably within households. See Gorz (Citation1994) and Little (Citation1996).
25 Ferguson suggests that such an amalgam of arguments that do not fit the conventional oppositions of ‘progressive’ social democracy and ‘reactionary’ neoliberalism might be creating ‘new and potentially promising forms of political struggle’ (Citation2007, p. 84). For an edifying elaboration on these and related themes, see Ferguson (Citation2015).
Additional information
Notes on contributors
Hein Marais
Hein Marais is the author of South Africa: Pushed to the limit (2011) and South Africa: Limits to change – the political economy of transition (1998 & 2001).