Post on 27-Jan-2016
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12 October 2010
Livelihoods and Care: Synergies between Social Grants and Employment
Programmes
National Labour and Economic Development Institute
Context and Background
• SA labour market and poverty indicators remain dismal:– Unemployment rate (narrow) has never dropped below
the 20% over the last 12 years and depending on the definition UR is now at 25% or as high as 37%
– According to Bhorat and Van der Westhuizen:• Using a R323 poverty line (2000 prices) aggregate
poverty declined, from 52.5 percent in 1995 to 49 percent in 2005
• Using a lower poverty line of R174 (2000 prices) the decline was by more than seven percentage points, from 31 percent to 24 percent – suggesting that those in deeper poverty experienced a relatively larger improvement in their welfare
– Rising inequality using different measures
Achieving its Aims but Poor Policy Coordination?
• Social grants extended to more than 13 million recipients, 3,5% of GDP or 13% of total expenditure
• High take up rate for CSG and OAP
• Significant contributor towards reducing head count poverty
• However, Social Security measures fail to target structural unemployed
• Very little coordination with public employment programmes
• Target well achieved
• However limited benefits due to:– No uniformed wage
structure, though this is being achieved
– Significant budget impetus needed to upscale and meet the 4.5 million target
– Move beyond the shorter working period
– Poor training outcomes
• 60% of participants in households have access to social grants too
Impact of Social Security and Public Employment interventions
• 60% of survey respondents in CASE data set receive at least one form of social grant in addition to their EPWP wage, this means that;– Positive impact for results where EPWP is effected
– Access to social grants during EPWP participation significantly reduces the chance that a household will remain in poverty relative to EPWP participants who are without access to social grants
– Though stand-alone provision of social grants also reduces poverty, the impact is accelerated if combined with EPWP participation however public employment programmes have more impact
– Male and coloured participants are significantly more likely to escape poverty once entering the EPWP than female and African participants
– If training was effective then it would increase the person’s ability to compete in the labour market and thus have more enduring impacts on poverty reduction
Years Sector
Infrastructure Economic Environment & Culture
Social Total
2004 – 2005:
Monthly wage (Rand) 1,058 850 693 671 965
Job duration (months) 5.8 0.7 3.3 14.3a 4.9
2005 – 2006:
Monthly wage (Rand) 970 575 770 657 839
Job duration (months) 3.1 1.5 3.5 7.1 3.6
2006 – 2007:
Monthly wage (Rand) 1,083 806 822 691 892
Job duration (months) 2.8 4.2 2.5 7.5 3.2
Total 2004-2007:
Monthly wage (Rand) 1,044 784 772 679 900
Job duration (months) 3.8 2.1 3.0 7.5 3.8
Wages and job duration in the EPWP by sector, 2004-2007
Source: EPWP (2005, 2006, 2007).
Poverty Impact
• Mitchell’s analysis shows that;– Increasing the number of social grant recipients and
EPWP participants suggest households close to the MLL poverty line
– EPWP contribution reduces the probality of households being in poverty
– EPWP with social grants reduces the probality of households in poverty just significantly but more so when other income is considered
– Access to training during EPWP did not have an impact on poverty
– Males have a greater chances of reducing poverty than females
Improving Wage Setting
• Social Grants are close to saturation levels and will continue to make poverty impacts but not as significant as public employment programmes.
• However this will require scale up that sees;– Labour intensive employment will be required and is
requirement to access fiscal incentive
– Wage standardization is being implemented but require to move to the upper band wage rate of R100 per day, supported by the national budget
– Transitional interventions that support employees in ECD and HCBC to move into both public and private sector. This could significantly improve minimum wages, skills and longer employment contracts
– Training and skills development must provide for better outcomes to improve formal labour absorption
Household Access to State Grants per Household Income Deciles, 1995 and 2005
Conclusions
• Given the various studies public employment programmes can have a greater impact on reducing poverty and improving livelihoods and care
• But complementarities and improved coordination of cash transfer and public employment to households must improve and improve poverty levels
• Significant up-scaling will be required in all pubic employment programmes
• The role of the state as an employee of last resort must be critical area of focus – in particular the need for increasing formal public sector employment at a transitional levels – engagement with unions would be crucial
• Training and wage setting at correct poverty levels are important and will must require social partnership agreement
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National Labour and Economic Development Institute
contact details
tel: 27-11-403-2122 I fax: 27-11-403-1948 I e-mail: naledi@naledi.org.za
6th Floor, COSATU House, Leyds St, I Braamfontein I Johannesburg
PO Box 5665 I Johannesburg I 2000
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