Sophie’s Declining Choices

The collapse of economic life coupled with declining services has a severe impact on the life of someone like Sophie.

Sophie is a 58-year-old domestic worker who looks closer to 70. She has an appearance of deep tiredness. She used to hold more than one piece-job per week but had only one when the lock-down started. She lives in Tembisa and used to commute to work.

She is small and thin and has surprisingly swollen ankles. Whether this is due to diet, illness or walking far is hard to ascertain as I don’t speak her language and she is not proficient in English and Afrikaans. When essential, she relies on her daughter in Polokwane to communicate for her over the phone. Her seven-year-old granddaughter, who lives with her and goes to school in Tembisa, is clearly Sophie’s delight and central to her life’s purpose.

Her daughter’s monthly income in the form of a R450 SASSA child support grant goes straight into the family “Society” savings each month. Her daughter has long been unemployed. As of 1 March 2020, the minimum wage for a domestic worker in South Africa is R15.57 per hour, R124.56 for an 8 hour day.

Not enough to live on

Sophie’s return train ticket from Tembisa to work used to cost R25—20.1% of the minimum wage. Then, in December last year, the trains stopped, and she had to switch to taxis—that’s R51 a day and 40.9% of the daily wage. That would leave just R73.56 for Sophie and her granddaughter to live on for the week. But going by food prices at Shoprite (one of the cheapest supermarkets) it becomes clear that this is not enough. This table shows roughly what a week’s groceries for one person costs.

Then, the lockdown started, and Sophie faced five weeks with no income apart from her daughter’s grant—at the mercy of government restrictions.

Already on the edge

The situation is horrific when you consider other wage earners and blue-collar workers such as construction workers. On 12 March the Institute of Race Relations’ (IRR) Chief Economist, Ian Cruikshanks, referred to Growthpoint Properties (the largest property investment holding company listed on the JSE) in his podcast. Cruickshanks stated, “The commercial property field is fraught with challenges…there are no more of these glass and marble palaces going up—there are those that have been planned for some time and the capital has been committed, so they’re carrying on with the building operations. But there won’t be any new ones.” This means that before the lockdown construction workers were already struggling with limited to no employment. Now their position is unimaginable.

And even people who maintain government infrastructure are likely to be deprived—as Cruickshanks put it in a podcast last month: “forget about government having the money to build new railways, to build new ports, to build the infrastructure, to enable us to sustain a higher rate of over-all economic activity…yes we’d like the municipality to come fill the pothole in front of our home, but they’re not going to have the money, they’re going to be having to provide any extra they have for social grants. There’ll be little or no development, there’ll be little job creation…”

Waiters, waitresses and other restaurant staff cannot work; and their employers (as well as the employers of domestic workers and gardeners), under the loss of their own incomes, will not be in a good position to offer employment when restrictions are relaxed.

Stimulus won’t save jobs

The latest Stats SA survey shows that a third of businesses in South Africa anticipate that they will have to lay people off, and economist Mike Schussler has estimated that for every one white-collar job lost, up to ten blue-collar workers could lose their jobs.

As Cruickshanks observed in his podcast: “I think that what we must realise is that the lockdown isn’t just for a specific number of days, the impact itself ripples through—first of all to all sectors of the economy and also, it takes a long time to get it moving at full capacity and full operative level again. So, what does it mean to the average person? Well, the shutdown at the moment is looking like it’s going to cost 10 000 jobs—that’s if they leave it just as it is and get it going under the present circumstances…And if it’s a long shutdown, over the medium-term (next couple of years) we could lose as many as 45 000 jobs from the mining sector and from those sectors who are big suppliers to mining companies.”

On 21 April, President Ramaphosa announced that, in response to the poverty and food insecurity exacerbated by the lockdown, government will increase all social grants for the next six months (May to October). At face value, tops-ups sound very appealing—Child Support grants will be increased by R300 in May and by a further R500 between June and October. R44,3 billion is to be added to the R187,8 billion already budgeted for social grants.

The unemployed are to receive R350 from the coronavirus relief scheme and businesses and municipalities have been promised financial aid as well. The president announced that in order to obtain the money, the South African government has approached international financial institutions, such as the International Monetary Fund. Overall, the Government has promised R500 billion in stimulus and relief measures.

A decade of economic stagnation

The problem is, we entered this crisis after a decade of economic stagnation and with an expanded unemployment rate of nearly 40%. As the crisis and lockdown protocols continue, more and more people are likely to lose their jobs which in turn will increase the demand for government support. Assuming wide-scale corruption does not take place, the Government with already thinly stretched resources, will find it difficult to mitigate the devastating impact of an extended lockdown on our economy. As Gerbrandt van Heerden of the Centre for Risk Analysis (CRA) puts it, “South Africa’s slow socio-economic decline has rendered the country’s social grant system increasingly unsustainable,” He further explains that increasing the value of social grants will put immense pressure on government’s already constrained budgetary flexibility and ability to provide public resources.

In the long term, collecting debt that we cannot pay back does not solve the problem. People cannot return to earning a livelihood if the economy has been rendered bankrupt.

All businesses provide essential services

In a recent briefing, CRA director Dr Frans Cronje said that a crucial mistake on the part of the Government was to distinguish between essential and non-essential services, pointing out “any business that operates is an essential service; which is why it operates”. Dr Cronje said that the distinction should instead have been made between businesses that could have operated safely by implementing social distancing protocols and those that could not.

“I think policymakers can forget that there is no line at which healthcare policy stops and the economy starts. Our broader, longer term healthcare response will be informed by the strength of the economy, and I think some of the lockdown protocols introduced have done unnecessary economic harm that will later compromise the healthcare response… there is a strong case to be made, not to go back to how it was before—we are very strong on the importance of social distancing protocols—but, I think that there are a great many businesses… who could easily have remained open to an extent and functioned, provided services and that doing so would not have undermined the attempts to buy time to improve South Africa’s health care infrastructure,” Dr Cronje stated.

It seems clear that South Africa’s middle classes, who employ people like Sophie, and the many thousands of businesses on whom blue-collar workers depend, are likely to suffer in the long term from the current economic carnage.

Given that the government’s proposed stimulus package looks unsustainable, what democratic choices are left to people like Sophie and her dependants?

The views of the writer are not necessarily the views of the Daily Friend or the IRR

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