Debunking the ‘culture of dependency’ argument against social grants

There seems to be growing consensus that we will see some kind of universal basic income guarantee (UBIG) introduced in South Africa. Those who both support and oppose a UBIG are asking tough questions that need answers, such as whether it will have the intended impact, how it will be financed and whether it is sustainable. These valid questions have been and are still being answered in the public debate, and should remain the focus of policymakers’ energies.

Yet, some of the UBIG’s more vocal opponents attempt to undermine this constructive dialogue with false narratives which are harmful to large sections of the South African population. We refer to one such narrative in particular — the claim that they create a “culture of dependency”. This is a pernicious idea, rooted in anti-poor prejudice. But it has been articulated by people with influence and found currency in the public arena. Proponents have included Finance Minister Enoch Godongwana and, last week, the editor-in-chief of City Press, Mondli Makhanya. In light of this, we wish to unpack the assumptions behind this suggestion and respond to them with real evidence.

Some key falsehoods underpinning the “culture of dependency” claim include that (1) grants make unemployed people (especially young people) unwilling to go out to look for and get work, (2) young unemployed people feel “entitled” to higher wages than are realistic and, (3) social grants will be spent frivolously and promote laziness.

These ideas may seem reasonable to many people, especially those who feel they have worked hard to achieve modest security. However, they fly in the face of the evidence, and crucially, falsely blame the unemployed for the difficulties they face finding work, difficulties which are not of their own making.

We have extensive, high-quality research on the structural reasons for South Africa’s jobs crisis. These include a poor education system, skills mismatch, deindustrialisation trends, government failing to live up to its role in driving sustainable development, and the fact that South Africa’s historical and current economic structure means that sufficient jobs are simply not being created for the available workforce. Economic policy choices have deepened many of these challenges rather than resolving them.

They are not the fault of people who find themselves unemployed, but these trends have worsened over time to the massive detriment of today’s jobseekers.

Let’s tackle the three myths listed above, citing actual evidence. 

Firstly, the idea that people without work are simply not motivated to go and find a job is spurious at best, and at worst, deeply prejudiced. We challenge those who advance these views to explain why they seem to believe 46.6% of South Africans are “unmotivated”, compared to 6.6% of the global average. To the contrary, a study of job seekers’ attitudes to grants in South Africa in 2010 found that “both those in and out of work placed a high value on paid employment”, and “all categories of the workless were extremely motivated to get work.”

Job seekers in South Africa face a variety of barriers in obtaining work. The labour market overwhelmingly favours skilled workers. Spatial inequality, due to apartheid spatial planning (especially being outside a major metropolitan area) means that many unemployed young people have to spend inordinate amounts of time and money to travel to find work — which is outside the means of many. In addition, in such a competitive labour market, limited social capital emerges as a barrier — such as knowing someone who is already employed who can give you “insider insight” on how to make yourself attractive to employers. 

Inequalities in access — to the internet and information on all aspects of work — are severe barriers that compound the situation, to the point where job seekers are locked into cycles of disillusionment due to repeated unsuccessful attempts to find work. Further, at a certain point, the costs of looking for work outweigh the prospects of finding it. This is why we have such a large number of “discouraged workers” reflected in our statistical surveys.  

In 2015, 13.8 million people were living below the food poverty line (FPL) of R624 per month. That is the income level below which a person cannot meet their basic food intake needs. Compare that with a recent Open Dialogues survey, which found that young people can spend about R1,300 per month on job search costs, including transportation, printing and data costs. 84% of those surveyed felt forced to choose between looking for a job, and having money for food and bills. In the face of this, ample evidence shows that social grants can play an important role in supplementing job-search costs. For instance, a recent study on the utilisation of the SRD grant found that some recipients used it to contribute to the costs of seeking work, including transport, data, and printing. Another 2015 study found that old-age pensions were often used in rural households to support young matriculants to travel to find work. 

With regard to the claim we sometimes hear from grant detractors, that young people feel entitled to well-paying jobs, a recent Afrobarometer survey found that 79% of South Africans would rather have a low-paying job than no job at all. Overall though, studies on the reservation wage, which is defined as the lowest wage that a job seeker is willing to take, show an interesting nuance. When job seekers are asked to self-report their reservation wage, studies show some have expectations above the realistic wages they would get in the labour market; and indeed above the wages many work seekers end up being compelled to accept. 

These job seekers can hardly be blamed for valuing their labour highly — it is a mantra we often hear from business motivational literature. And moreover, many forms of labour (such as domestic and care work) are woefully undervalued in our political economy. Other studies show that job seekers tend to revise down their reservation wages once they receive or are made aware of realistic job offers, and thus have a more accurate sense of the wage they can expect in the labour market. The problem, then, is not a culture of entitlement, but rather an information gap, and a labour market heavily stacked against jobseekers.

So, how do grants fit into this picture?

Firstly, it is wildly out of touch to think that social grants are just free money that funds leisure activities. Proposals for a UBIG have been mostly set at the level of either the food poverty line (R624) or the upper-bound poverty line (R1,335). These are the metrics determined by Statistics South Africa, based on how much a person needs per month to cover their minimum food needs, and minimum food needs plus other basic living costs, respectively. At R350, the Social Relief of Distress grant falls well below the food poverty line and the minimum amount required not to starve in South Africa. While insufficient, against the backdrop of South Africa’s crisis of poverty and hunger, the SRD has been a lifeline and it is deeply insulting to recipients to suggest they spend it frivolously. 

Over and above that, however, the reflex to moralising about the spending decisions of the poor is paternalistic and has no place in South Africa’s social compact. Those people who take this position should be willing to open up their accounts to the same kind of public judgement. This goes to the heart of ideas about the undeserving poor, and dependency culture. Those who hold them often use them to justify their own comparatively privileged place in society, on the basis that they worked for it, they deserve it, and therefore those who don’t enjoy the same privileges must be undeserving. 

We strongly condemn the characterisation that this country’s massively unemployed population face their predicament — in whole or in part — because of a cultural or attitude problem. This perception is based solely on anti-poor prejudice. Achieving high or even full employment is a laudable policy goal, which we should pursue with all available tools. But, given South Africa’s economic status quo and history, and as the President acknowledged in his reply to the Sona, even if the government takes meaningful action on the jobs crisis, it will take “many years” for sufficient jobs to materialise. 

We have laid out above some of the barriers that exist to job creation and labour market access, which will take years to dismantle, and argued that in the face of stubborn, long-term unemployment, we need urgent, evidence-based solutions to this crisis. A UBIG has been rigorously scoped, modelled and debated. The IEJ and others in government, civil society and academia have put forward robust financing options to show that it is within government’s reach, and need not involve fiscal risk or any squeeze on low and middle-income taxpayers. Moreover, we have shown that it holds enormous promise in stimulating local economies and enabling job creation. 

This is not about taking the easy way out or having low expectations of young black people. It is about adequate cognisance of the nature and severity of the problem, and the real solutions that are on the table. This is what research says, underpinned by extensive local and international evidence. In the UBIG debate then, those who are not deserving are those who are only able to muster anecdotes, flimsy opposition, or anti-poor and racial prejudice. Many of the elites advancing these views have extensive public reach, immense influence, or even the ear of the President. They should be careful not to abuse this influence to peddle ideas that can only sink us deeper into a social and humanitarian crisis. DM/MC

Bandile Ngidi is the Rethinking Economics Project Lead and Kelle Howson is the Social Security and Workers’ Rights Senior Researcher with Institute of Economic Justice.


 

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