July 2020 Household Affordability Index PMBEJD

PMBEJD July 2020 Household Affordability Index & Discussion Paper on Unemployment & the BIG

A call to support the introduction of a Basic Income Grant for workers to invest in a livelihood, create work, and generate greater demand to kick-start a new economic trajectory.

The Basic Income Grant [BIG] discussion is in the public domain again, after many years. The situation that we face today is different to where South Africa was during previous campaigns to introduce a BIG. Our economic situation has deteriorated. Unemployment and job losses are spiralling. Poverty and inequality are becoming entrenched. We now must find new ways to reconfigure the economy post-Covid. Implementing some type of Basic Income Grant now, can provide us with an instrument to reshape our economic trajectory. However, we argue that we would need to change our policy mindset around the Basic Income Grant.

For 25+ years we have been trapped in a policy space that does not allow us to eradicate poverty, because poverty is not the cause of itself; it is the result of an unjust and inequitable economic system. By framing poverty as ‘the problem,’ we have designed policy instruments, that whilst alleviating some of the harshest features of poverty, mostly through the social grant system offering very low level income transfers, have done very little to help get people out of poverty, or to change how the economy is structured or performing.

Poverty eradication is an outcome of an equitable economic system which redistributes wealth and invests in people. Jobs are not going to come. Unemployment will escalate. Poverty will become intractable. Economic growth will continue to slump. We need new tools. We must urgently find new ways to enable millions of South Africans, currently excluded from being able to participate in and contribute to economic activity, to invest in their own livelihoods and create work, boost spending, build a strong local economy and shape a different future. A Basic Income or Investment Grant could be an instrument that will allow us to build a new economy and shape a new economic growth path and developmental trajectory. It would require massive financial investment in the short-term; but will be of significant long-term advantage to us all.

July 2020 Household Affordability Index

Discussion Paper on unemployment and a Basic Income Grant

For information and media enquiries, contact: Mervyn Abrahams on 079 398 9384 and mervyn@pmbejd.org.za; or Julie Smith on 072 324 5043 and julie@pmbejd.org.za.

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