Mervyn Abrahams is Programme Co-ordinator of the Pietermaritzburg Economic Justice and Dignity Group. KZN INVEST spoke to him after the unrest.
Q: Your Household Affordability Index tracks food price data from supermarkets and butcheries around South Africa, and in July this year (before the unrest) put the average cost of a poor family food basket at R4 137. Why is this index important?
A: The average cost of the household food basket was R4 241,11 in August 2021 – it increased by 2,5% (R103,69) month-on-month, and 10% (R384,78) over the past year. The index is designed specifically to track and reflect the cost of foods and other critical expenses as purchased by most low-income households and workers in South Africa. It can accurately reflect inflation as experienced by low-paid workers, as well as its consequences. Families on low incomes spend differently and experience inflation differently to those families who are better off.
Poorer families spend more money on fewer things – specifically food, electricity, and transport. It is these goods and services that have seen massive hikes in prices, while wage levels, even the National Minimum Wage, has seen below real inflationary increases. The PMBEJD HAI attempts to fill a gap in South Africa’s statistics which are skewed by inequality by being biased specifically to those who are excluded by their low expenditures. In a sense, the index reveals a more realistic picture of the conditions and experiences of black South Africans earning low wages, most of whom earn low wages.
Q: Your communication with stakeholders delves into Statistics South Africa’s unemployment data which says 10,2 million people are unemployed and a worker’s wage supports 4,3 people. This obviously deepens our instability?
A: The latest stats (Q2) shows that 10,7 million or 48,7% of black South Africans are unemployed. No country in the world can support this level of unemployment without massive social unrest, and yet many of us wake up and the surface of our lives seems smooth. Beneath this surface, we have a situation that is untenable. The urgency to address both the historical economic injustices and the current precipitation of horrifyingly deepening unemployment, poverty, exclusion, marginalisation, and misery does not appear to be the front and centre of absolutely everything the government does right now. The anger at the government is escalating every day. People are enormously frustrated, asking where are we going? What does the future look like for my family?
Q: Why do you advocate for an extension of social grants? Do grants not create an unhealthy dependency on the State? How do you frame the discussion around this?
A: We are in an emergency crisis and any long-term economic restructuring will take time to gain traction. In the intermediate period – to keep people alive and maintain a level of demand for goods and services amongst the low-income sector which benefits the larger economy – we need crisis intervention. Welfare is expanded in times of crises. We either extend social grants or we watch as millions of our people starve; millions of our children become cognitively and physically stunted. We support the extension of social grants because there is no other way right now to prevent hunger or to thwart off the dystopia that will come if we condemn millions of our children to yet another cycle of ever-deepening poverty. We support the extension of social grants because without them no one has a future. There will be no wealth, no economy, no civil state. Poverty is unhealthy. Black South Africans, two-thirds of whom live in poverty right now, are not the cause of their own poverty. Apartheid is the cause of poverty. Injustice is the cause of poverty. Wealth is the cause of poverty. Inequality is the cause of poverty. Exploitation, racism, marginalisation, exclusion is the cause of poverty.
The recent unrest in KZN and Gauteng has shown that we must now all make space at the table because the walls can be ripped down. Higher walls and more spending on security cannot always keep us safe where millions are starving and crime is a means to survive. The unrest might have offered us yet another lesson that we must all change and all sacrifice for this beautiful country.
Q: You speak about the inability of people to rise above survival. How would you explain that? People often posit entrepreneurship as a solution: if you have enough grit and determination, you can make it.
A: While entrepreneurship is part of the answer, it cannot be the only solution. Young people with good ideas in communities tell us they are not able to sell what they create because no one has money. We must therefore start by supporting people to expand what they are already doing to survive. Take the next step up from survival. Therefore, we encourage the idea of livelihoods. Our problems are not supply-side but demand side. Give people money and the market will respond. Jobs will be created. We must look at the economic system upside down. We need to start with money in our pockets in the front-end first.
Q: SA is regarded as the biggest welfare state in Africa and corruption and inefficiency levels are sky-high. Taxpayers are angry money is squandered when it could be used to bridge the social divide. How do you think we should frame the debate in light of this?
A: We have some of the lowest wages in the world relative to the costs of goods and services, some of the highest unemployment rates in the world, and the highest inequity in the world. For a country also with astonishing wealth, if we do not share, then it is expected that welfare be used as a strategy to keep people in their place. All people in South Africa pay tax. VAT is levied on all goods and services. We are all taxpayers and we are all angry when our money is squandered, especially people who have less money to spend. We are all angry when our money is squandered. We need proper governance. It is unlikely that our current leaders can lead us out of the mess we are in. We need new leaders, new ideas, new energy, passion and vision to assure those who pay tax that our taxes are used to invest in long-term positive outcomes for the country.
Q: How do we go about creating a caring state? What does that mean? How do we get business and civil society to engage considering the government trust deficit?
A: We need a just state. We need economic justice, transformation, equity. We need to first recognise who we are, and where we are. We don’t have a choice anymore. People can no longer opt-out of thinking and working through the future. We either find a way soon or we don’t.
We could start with at least not doing any more harm. Not doing anything that deepens inequality, that deepens poverty and injustice. We just need to recognise that what is good for my family is also good for yours. We all want a better future for our kids. Let’s start there. Make sure everyone can eat proper nutritious food. Make sure every child gets an excellent education and the best healthcare. Make sure everyone can meet their basic needs so homes can be safe and functional and a place to grow and think and thrive. Let’s just go simple.
Tags: economy, Mervyn Abrahams, Pietermaritzburg Economic Justice and Dignity Group, unrest, unrest in KZN and Gauteng, wages, welfare