tag:theconversation.com,2011:/ca/topics/job-creation-11725/articlesjob creation – The Conversation2023-12-21T08:55:07Ztag:theconversation.com,2011:article/2084912023-12-21T08:55:07Z2023-12-21T08:55:07ZNigeria’s plantain wine: a traditional drink with huge economic potential<figure><img src="https://images.theconversation.com/files/542808/original/file-20230815-25-o1drw0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Plantain waste can be reduced in Nigeria and used in the production of wine. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.co.uk/detail/photo/green-and-yellow-plantains-royalty-free-image/1167085854?phrase=Plantain&adppopup=true">Getty Images </a></span></figcaption></figure><p>Agadagidi, a wine made from plantain, is a popular drink at festive occasions in Nigeria. But it’s not always of a high quality. </p>
<p>It is usually produced in the <a href="https://library.faraafrica.org/wp-content/uploads/2019/10/Guidebook-Plantain-production-in-Nigeria-rev.pdf#page=9">southern part of the country</a> in limited quantities because it is difficult to store. Akwa-Ibom, Cross River, Imo, Enugu, Rivers, Edo, Delta,
Lagos, Ogun, Osun and Oyo states are known for plantain cultivation.</p>
<p><a href="https://office2.jmbfs.org/index.php/JMBFS/article/view/8258">Our study</a> examined ways to improve the production of agadagidi and ultimately create more jobs. </p>
<p>Agadagidi is traditionally produced from overripe plantain by fermenting the juice, known as must, for three days and filtering it thereafter. The juice has a cloudy appearance, is effervescent and has a sweet-sour taste.</p>
<p>Given that plantain is readily available in the country, and imported wines are expensive, we conducted <a href="https://office2.jmbfs.org/index.php/JMBFS/article/view/8258">research</a> to establish if it was possible to make better quality agadagidi. </p>
<p>In Nigeria the <a href="https://www.sciencedirect.com/science/article/pii/S2468227618302357">agricultural sector</a> employs about 70% of the labour force and contributes about 30% of the national GDP. Smallholder farmers account for almost 90% of the total food production. </p>
<p>But losses due to poor post-harvest practices can reach up to 50% for some fresh food produce. Half of the food that is produced for humans never gets consumed. The country grapples with <a href="https://www.sciencedirect.com/science/article/pii/S2468227618302357">food insecurity</a> partly due to bottlenecks such as high food losses along its food supply chains. Farmers also lose out on income.</p>
<p>Plantain production <a href="https://knoema.com/data/agriculture-indicators-production+plantains+nigeria">increased</a> from 994,000 tonnes in 1972 to 3.12 million tonnes in 2021. The average production increase is 2.75% which could be a boon to the economy if well managed. </p>
<p><a href="https://office2.jmbfs.org/index.php/JMBFS/article/view/8258">Our study</a> was carried out to optimise the production process to make it safe and of consistent quality. This would be beneficial in a number of ways: it would reduce reliance on imported wine, reduce waste and encourage the production of indigenous wineries, thereby creating jobs and boosting Nigeria’s economy. </p>
<h2>How we conducted our research</h2>
<p>One batch of agadagidi was produced using the traditional method. We also produced agadagidi using controlled fermentation and divided the liquid separated into six batches testing various scenarios using sodium metabisulphite and wine yeast. Some of the samples were pasteurised and some not. </p>
<p>All samples were fermented for three days and dispensed into sterile bottles. </p>
<p>Microbial count, pH and acidity were determined at a weekly intervals for a period of three weeks. </p>
<p>Microorganisms were identified to determine the safety of the products and the consumer acceptability test was also assessed.</p>
<h2>Our findings</h2>
<p>All the unpasteurised samples treated with sodium metabisulphite with or without the addition of wine yeast were acceptable in terms of microbial count, physicochemical properties and consumer acceptability.</p>
<p>Our method could be replicated on a large scale using the same materials we did. It’s also made easier with the abundant plantain in Nigeria. The country can generate more jobs for its teeming young population. Nigeria’s unemployment rate is expected to rise to <a href="https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/03/kpmg-global-economic-outlook-h1-2023-report.pdf#page=47">40.6% in 2023 as compared to 2022’s 37.7%</a>, and as high as 43.9% in 2024.</p>
<p>Our findings show that plantain waste can be reduced and used in production of wine. The quantity of imported wine consumed in Nigeria <a href="https://businessday.ng/business-economy/article/nigerias-wine-consumption-hits-record-high-in-2021/">increased</a> from 26.7 to 33.1 million litres from 2015 to 2021. In 2021, Nigeria <a href="https://oec.world/en/profile/bilateral-product/wine/reporter/nga#:%7E:text=Imports%20In%202021%2C%20Nigeria%20imported,and%20Italy%20(%246.14M).">spent US$116 million on wine imports</a>, becoming the 36th largest importer of wine in the world. </p>
<p>Optimisation of locally produced wine will reduce reliance on imported wine and boost the country’s economy, especially in these days of <a href="https://www.reuters.com/markets/currencies/nigeria-central-bank-make-moves-impacting-fx-markets-days-2023-08-14/">scarce foreign exchange</a>.</p><img src="https://counter.theconversation.com/content/208491/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Malomo Adekunbi Adetola receives funding from Carnegie and Dutch Government.</span></em></p>Increasing the quality of a traditional wine sourced from plantain in Nigeria offers a viable way of reducing waste and boosting food security.Malomo Adekunbi Adetola, Lecturer in Food Science and Technology, Obafemi Awolowo UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2073172023-06-22T08:45:54Z2023-06-22T08:45:54ZCities are central to our future – they have the power to make, or break, society’s advances<figure><img src="https://images.theconversation.com/files/530867/original/file-20230608-3016-2sh956.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Dharavi slum in India. Billions of people live in terrible conditions in the world's cities.</span> <span class="attribution"><span class="source">Punit Paranje/AFP via Getty Images</span></span></figcaption></figure><p>We live in tumultuous times. In the space of just a few years, we have witnessed a surge in <a href="https://ppr.lse.ac.uk/articles/10.31389/lseppr.4">populist politics across the world</a>, a <a href="https://www.who.int/emergencies/diseases/novel-coronavirus-2019">global pandemic</a>, a spike in <a href="https://public.wmo.int/en/media/press-release/weather-related-disasters-increase-over-past-50-years-causing-more-damage-fewer">environmental disasters</a> and a fraying of geopolitical relations demonstrated by the <a href="https://www.ft.com/war-in-ukraine">tragic war in Ukraine</a> and <a href="https://www.cfr.org/backgrounder/china-taiwan-relations-tension-us-policy-biden">escalating tensions over Taiwan</a>.</p>
<p>That has all occurred against a backdrop of dramatic technological changes that are fundamentally altering the way we work and relate to one another. </p>
<p>Our future is in the balance. Cities will be central to our fate, for two reasons. </p>
<p>First, they are now home to <a href="https://www.worldbank.org/en/topic/urbandevelopment/overview#:%7E:text=Today%2C%20some%2056%25%20of%20the,billion%20inhabitants%20%E2%80%93%20live%20in%20cities">over half of the global population</a>, a share that will rise to <a href="https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html">two-thirds by 2050</a>. That is something never before seen in human history, and means that the forces shaping life in cities now also shape our world as a whole. </p>
<p>Second, cities throughout history have been the engines of human progress. Cities are where solutions are found – but also where perils are amplified when we fail to act.</p>
<p>This article draws on a book I co-authored with Tom Lee-Devlin, <a href="https://linktr.ee/ageofthecity">Age of the City: Why our Future will be Won or Lost Together</a>, which has just been published by Bloomsbury. As the book’s subtitle highlights, we need to ensure that we create more inclusive and sustainable cities if all our societies are to thrive. </p>
<h2>Cities as seats of populist revolt</h2>
<p>The great paradox of modern globalisation is that declining friction in the movement of people, goods and information has made where you live more important than ever. Appreciation of the complexity of globalisation has come a long way since the early 2000s, when American political commentator Thomas Friedman’s <a href="https://www.amazon.com/World-Flat-History-Twenty-first-Century/dp/0374292884">The World is Flat </a> and British academic Frances Cairncross’s <a href="https://hbswk.hbs.edu/archive/the-death-of-distance-how-the-communications-revolution-is-changing-our-lives-distance-isn-t-what-it-used-to-be">The Death of Distance</a> captured the public’s imagination. </p>
<p>We now know that, far from making the world flat, globalisation has made it spiky. </p>
<p>The growing concentration of wealth and power in major urban metropolises is toxifying our politics. The wave of populist politics engulfing many countries is often built on anger against cosmopolitan urban elites. This has been given expression through <a href="https://www.bbc.com/news/uk-politics-32810887">Brexit in Britain</a>, and in support for anti-establishment politicians in the US, France, Italy, Sweden and other countries. </p>
<p>A common thread of all these populist movements is the notion that mainstream politicians, business leaders and media figures cocooned in big cities have let the rest of their countries down and lost interest in “left behind” places and people. </p>
<p>These populist revolts against dynamic cities are rooted in real grievances based on stagnating wages and soaring inequality. </p>
<p>A transformational effort to spread economic opportunity is long overdue. But undermining dynamic cities is not the way to do that. Cities like London, New York and Paris – and in the developing world Mumbai, Sao Paulo, Jakarta, Shanghai, Cairo, Johannesburg and Lagos – are engines of economic growth and job creation without which their respective national economies would be crippled.</p>
<p>What’s more, many of these cities continue to harbour profound inequalities of their own, driven by wildly unaffordable housing and broken education systems, among other things. They are also in a state of flux, thanks to the rise of remote working.</p>
<p>In places like San Francisco, offices and shops are suffering, municipal taxes are declining and businesses that depend on intense footfall – from barbers to buskers – are under threat. So too are public transport systems, many of which depend on mass commuting and are haemorrhaging cash.</p>
<p>All countries, therefore, are in dire need of a new urban agenda, grounded in an appreciation of the power of large cities – when designed properly – to not just drive economic activity and creativity, but also bring together people from many different walks of life, building social cohesion and combating loneliness. </p>
<p>But our focus must extend beyond the rich world. It is in developing countries where most of the growth in cities and the world’s population is taking place. Overcoming poverty, addressing the Sustainable Development Goals and addressing climate change, pandemics and other threats requires that we find solutions in cities around the world. </p>
<h2>Dangers posed for cities in the developing world</h2>
<p>Developing countries now account for most of the world’s city-dwellers, thanks to decades of dramatic urban growth.</p>
<p>In some cases, such as China, rapid urbanisation has been the result of a process of economic modernisation that has lifted large swathes of the population out of poverty. </p>
<p>In others, such as the Democratic Republic of Congo, urbanisation and economic development have been disconnected, with rural deprivation and the flight from danger playing a greater role in the migration to cities than urban opportunity. </p>
<p>Either way, cities are now where the world’s poor are choosing to live. And many of their cities are giant and overcrowded, with residents too often living in appalling conditions. </p>
<p>Appreciating what is happening in the cities of the developing world is essential if poverty is to be overcome. It also is vital if we are to understand why contagious diseases are making a comeback. Modern pandemics, from HIV to COVID-19, have their origins in these cities. </p>
<p>Crowded conditions are coinciding with a number of other trends in poor countries, including rapid deforestation, intensive livestock farming and the consumption of bushmeat, to increase the risk of diseases transferring from animals to humans and gaining a foothold in the population. </p>
<p>From there, connectivity between the world’s cities, particularly via airports, makes them a catalyst for the global dissemination of deadly diseases. That means that dreadful living conditions in many developing world cities are not only a pressing humanitarian and development issue, but also a matter of global public health. </p>
<p>Tremendous progress has been made in the past two centuries in <a href="https://wellcome.org/news/reforming-infectious-disease-research-development-ecosystem">combating infectious diseases</a>, but the tide is turning against us. Cities will be the principal battleground for the fight ahead. </p>
<p>Cities are also where humanity’s battle against climate change will be won or lost. Ocean rise, depletion of vital water resources and urban heatwaves risk making many cities uninhabitable. Coastal cities, which account for nearly all global urban growth, are particularly vulnerable. </p>
<p>While rich cities such as Miami, Dubai and Amsterdam are threatened, developing world cities such as Mumbai, Jakarta and Lagos are even more vulnerable due to the cost of developing sea walls, drainage systems and other protective measures. </p>
<p>At the same time, cities, <a href="https://blogs.worldbank.org/sustainablecities/cutting-global-carbon-emissions-where-do-cities-stand">which account for 70% of global emissions</a>, will be at the heart of efforts to mitigate climate change. From encouraging public transport use and the adoption of electric vehicles to developing better systems for heating and waste management, there is much they need to do.</p>
<p>In 1987, Margaret Thatcher is <a href="https://www.theguardian.com/politics/2013/apr/08/margaret-thatcher-quotes">reported to have declared</a>: “There is no such thing as society”, only “individual men and women and families”. In fact, <em>Homo sapiens</em> is a social creature, and our collective prosperity depends on the strength of the bonds between us. If we are to survive the turmoil that lies ahead, we must rediscover our ability to act together. Since their emergence five millennia ago, cities have been central to that. We cannot afford to let them fail.</p>
<p><em>Ian Goldin and Tom Lee-Devlin, <a href="https://linktr.ee/ageofthecity">Age of the City: Why our Future will be Won or Lost Together, Bloomsbury, June 2023</a>.</em></p><img src="https://counter.theconversation.com/content/207317/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Goldin receives funding from Citibank, and the Allan and Gill Gray Foundation.
</span></em></p>Cities are where solutions are found – but also where perils are amplified when we fail to act.Ian Goldin, Professor of Globalisation and Development; Director of the Oxford Martin Programmes on Technological and Economic Change, The Future of Work and the Future of Development, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2054602023-05-28T11:32:25Z2023-05-28T11:32:25ZHow smaller cities can integrate newcomers into their labour markets<figure><img src="https://images.theconversation.com/files/526829/original/file-20230517-17-yl005a.JPG?ixlib=rb-1.1.0&rect=0%2C931%2C8640%2C4798&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">New Canadians take the Oath of Citizenship during halftime at a Redblacks and Montréal Alouettes CFL game in Ottawa in July 2022. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span></figcaption></figure><p>In 2022, Canada’s population grew by a million people. Nearly all this growth — a whopping 96 per cent — <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/230322/dq230322f-eng.htm">came from immigration.</a> </p>
<p>That’s one million new people who need housing, education, health care and employment. <a href="https://www12.statcan.gc.ca/census-recensement/2011/as-sa/98-310-x/98-310-x2011003_1-eng.cfm">The last time Canada saw such a level of growth was 1957</a>, during the post-war baby boom.</p>
<p>It’s no secret that Canada is a nation open to immigrants. Our active immigration and refugee process and welcoming attitude are baked into our national reputation. Multiculturalism is enshrined in federal policy and the cultural mosaic is touted as our model for integrating newcomers. </p>
<p>It’s also clear Canada depends on immigration to drive population and economic growth. Like many high-income countries, <a href="https://www.statcan.gc.ca/o1/en/plus/960-fewer-babies-born-canadas-fertility-rate-hits-record-low-2020">birth rates here are far below replacement levels as families are choosing to have fewer children.</a></p>
<p>This, coupled with an aging population and a pandemic that closed borders and slowed migration, has created <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/220621/dq220621b-eng.htm">critical labour shortages</a> nationwide. </p>
<h2>Matching jobs with skills</h2>
<p>The federal government’s economic recovery strategy relies heavily on increasing immigration targets.</p>
<p>The goal is to admit <a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/notices/supplementary-immigration-levels-2023-2025.html">500,000 new immigrants annually by 2025</a>, more than 60 per cent of whom will be economic applicants. An <a href="https://www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=323293&CVD=323294&CLV=0&MLV=4&D=1">economic applicant</a> is someone who’s been selected for their occupational skills, experience and ability to contribute to Canada’s economy. </p>
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Read more:
<a href="https://theconversation.com/the-problem-with-immigration-targets-theyre-guesstimates-easily-misunderstood-by-the-public-197309">The problem with immigration targets: They're 'guesstimates' easily misunderstood by the public</a>
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<p>Canada’s approach to labour migration sounds good in theory: select the most talented applicants and offer them one-way tickets to a welcoming country with bountiful jobs and endless opportunity. </p>
<p>But there’s one problem. Newly arrived immigrants typically struggle to find employment that matches their skills and qualifications. Research shows that <a href="https://doi.org/10.1353/ces.2022.0010">many end up working in precarious jobs</a> characterized by low wages, irregular hours and unstable contracts. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A bearded man in a dark blue suit gestures as he speaks." src="https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=412&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=412&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=412&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=517&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=517&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526828/original/file-20230517-23-d8dno6.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=517&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Immigration Minister Sean Fraser rises during Question Period in Ottawa.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Adrian Wyld</span></span>
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<p>Yet, if executed well, Canada’s ambitious immigration plan could benefit smaller communities and local employers desperately seeking workers. </p>
<p>In our recent study published in <a href="https://doi.org/10.1111/cag.12833"><em>The Canadian Geographer</em></a>, we showed that more immigrants are settling in small and mid-sized communities than in Canada’s largest metropolitan areas of Toronto, Vancouver and Montréal. </p>
<p>How do smaller urban areas ensure the economic integration of newcomers? To answer this, we focused our research on the city of Guelph, Ont., that has one of the <a href="https://www.therecord.com/local-guelph/business/2022/08/08/guelph-area-unemployment-rate-hits-lowest-point-since-2019.html">lowest unemployment rates</a> in the country. </p>
<h2>Driven by local industry</h2>
<p>Interviews with local service providers and employers in the city revealed that anyone who wants a job can get one. But as our research showed, the type and quality of jobs available were low-skilled and less desirable to the highly educated, highly skilled immigrants Canada typically admits annually. </p>
<p>Employment in small and mid-sized cities is largely driven by local industry, which varies depending on the region. In Guelph, it’s manufacturing; in Brandon, Man., it’s wheat; in Prince George, B.C., it’s forestry, and in Pictou County, N.S., it’s mining. </p>
<p>So, while there may be many jobs available, the sectors and locations of those jobs may not align with the skills, qualifications and work preferences of newcomers to Canada. One way to bridge this gap is through regional economic immigration programs such as the Provincial Nominee Program (PNP). </p>
<p>The <a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/notices/supplementary-immigration-levels-2023-2025.html">PNP allows provinces and territories</a> to select a specific number of immigrants to meet their local labour market needs. In 2023, close to one-quarter of anticipated immigrants are allocated to the PNPs. </p>
<p>Immigrants applying to the PNPs are awarded higher points for in-demand occupations and are nominated for permanent residence by the province or territory. As part of the program, immigrants must indicate they intend to work and reside in that province. </p>
<p>The impact of the PNPs has been <a href="https://www.canada.ca/content/dam/ircc/documents/pdf/english/evaluation/execsum-e1-2015-pnp-en.pdf">evaluated over time </a> and the outlook for participating immigrants is promising. The challenge for cities will be to retain newcomers once they arrive. </p>
<p>Studies show that <a href="https://www.theglobeandmail.com/politics/article-how-welcoming-are-communities-to-immigrants-researchers-design-a-new/">communities that have meaningful employment opportunities</a> fare better at attracting immigrants. </p>
<figure class="align-center ">
<img alt="A family of four holds up their citizenship certificates and smiles for a photo." src="https://images.theconversation.com/files/526825/original/file-20230517-25-xdku5.jpg?ixlib=rb-1.1.0&rect=0%2C242%2C4870%2C2725&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526825/original/file-20230517-25-xdku5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=378&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526825/original/file-20230517-25-xdku5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=378&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526825/original/file-20230517-25-xdku5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=378&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526825/original/file-20230517-25-xdku5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=475&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526825/original/file-20230517-25-xdku5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=475&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526825/original/file-20230517-25-xdku5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=475&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">A Haitian family poses for a photo after becoming new Canadians following a citizenship ceremony on Parliament Hill in 2019.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
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</figure>
<h2>Supporting skilled newcomers</h2>
<p>There is no disputing that our existing labour supply is being diminished by economic growth, aging populations and a low birth rate. In 1980, for every one retiree there were six workers. By 2036, there will be only <a href="https://www150.statcan.gc.ca/n1/pub/75-006-x/2019001/article/00004-eng.htm">three workers for every retiree</a>. </p>
<p>Canada’s response has been to boost immigration levels significantly. For that to be effective, we need integration policies that support skilled newcomers and a well-funded settlement sector that can keep pace with the entry of newcomers across all cities – large and small. </p>
<p>We also need governments to invest in better infrastructure, <a href="https://www.theglobeandmail.com/opinion/article-canadas-housing-and-immigration-policies-are-at-odds/">including housing</a> and improved health care capacity. </p>
<p>Smaller urban communities can help by taking pressure off the most heavily populated regions. With better alignment between policy and reality, immigrant employment experiences can improve over time.</p><img src="https://counter.theconversation.com/content/205460/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrea Baumann receives funding from the Canadian Institutes of Health Research (CIHR). </span></em></p><p class="fine-print"><em><span>Margaret Walton-Roberts receives funding from SSHRC.</span></em></p><p class="fine-print"><em><span>Bruce Newbold and Mary Crea-Arsenio do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Canada is counting on immigrants to drive economic growth. Smaller urban communities can help take pressure off Canada’s most heavily populated regions by attracting and retaining newcomers.Mary Crea-Arsenio, Senior Research Associate, Global Health, McMaster UniversityAndrea Baumann, Associate Vice-President, Global Health, McMaster UniversityBruce Newbold, Professor of Geography, McMaster UniversityMargaret Walton-Roberts, Chair professor, Geography and Environmental studies, Wilfrid Laurier UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1956012022-12-08T13:38:39Z2022-12-08T13:38:39ZAbiy Ahmed gained power in Ethiopia with the help of young people – four years later he’s silencing them<figure><img src="https://images.theconversation.com/files/498761/original/file-20221203-16-gyawnf.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ethiopians celebrate Prime Minister Abiy Ahmed's Nobel Peace Prize win in 2019.</span> <span class="attribution"><span class="source">Minasse Wondimu Hailu/Anadolu Agency via Getty Images</span></span></figcaption></figure><p>When Abiy Ahmed took power as Ethiopia’s prime minister in April 2018, he was the <a href="https://www.theglobeandmail.com/world/article-new-ethiopian-leader-abiy-ahmed-youngest-in-africa-sparks-hope-of/">youngest head of government</a> in Africa. </p>
<p>At 42, he represented a stark contrast to <a href="https://theconversation.com/paul-biya-has-been-cameroons-president-for-40-years-and-he-might-win-office-yet-again-194856">many ageing African leaders</a> who had been in position for decades. These leaders often stake their claim to power by referring to their victories in revolutionary wars many decades back. </p>
<p>Before Abiy’s entry, Ethiopia had been governed by the same party for 27 years – the Ethiopian People’s Revolutionary Democratic Front. This was a coalition of parties established by the Tigray People’s Liberation Front in 1991. The party claimed legitimacy by pointing to its victory in a <a href="https://www.britannica.com/place/Ethiopia/Socialist-Ethiopia-1974-91">civil war in 1991</a>. </p>
<p>It took mass protests from the youth – and an elite split within the government – to <a href="https://www.aljazeera.com/news/2018/2/20/ethiopia-mass-protests-rooted-in-countrys-history">overthrow this regime</a>.</p>
<p>After rising to power, Abiy replaced the old ruling party with the <a href="https://www.africanews.com/2022/03/12/ethiopian-pm-abiy-calls-for-peace-at-launch-of-party-s-first-congress//">Prosperity Party</a>. This, along with his relative youthfulness, was seen as a break with the past. </p>
<p>The hope was that this change would bring the political and economic inclusion of young people in Ethiopia. This category includes those aged 15 to 29, who make up <a href="https://www.usaid.gov/sites/default/files/documents/1860/Fact_Sheet_Developing_Ethiopias_Youth_Jul_2017.pdf">28%</a> of Ethiopia’s population of <a href="https://www.worldometers.info/world-population/ethiopia-population/">122 million</a>. </p>
<p>This group at the time experienced high unemployment levels and political marginalisation. Little has changed since then.</p>
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Read more:
<a href="https://theconversation.com/why-ethiopians-are-losing-faith-in-abiys-promises-for-peace-126440">Why Ethiopians are losing faith in Abiy's promises for peace</a>
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<p>My co-researchers and I have been <a href="https://www.cmi.no/projects/2177-nfr-youth-in-africa">investigating</a> regime-youth interactions in Ethiopia, Mozambique, Uganda and Zimbabwe since 2019. By exploring these interactions and the major policies addressing young people, we aim to see whether state policies empower the youth or keep them on the margins.</p>
<p>In Ethiopia, we <a href="https://www.cmi.no/publications/7829-neglect-control-and-co-optation-major-features-of-ethiopian-youth-policy-since-1991">identified</a> two major policy responses to the youth. The first was job creation. The second was political representation through youth-specific representative bodies. </p>
<p>We found that while these responses are officially meant to address economic and political marginalisation, they have instead been used to repress or co-opt the youth. </p>
<p>We argue that regime strategies towards the youth in Ethiopia – as in the other countries in our study – are part of the “menu” of authoritarian strategies for incumbents to hold on to power. </p>
<h2>The research</h2>
<p>Our research in the four countries started with the question: are youth agency and regime policy leading to empowerment, or to suppression and old patterns of subordination? </p>
<p>The question was particularly intriguing in the context of Ethiopia, where <a href="https://theconversation.com/why-young-ethiopians-in-oromia-and-sidama-fought-for-change-161440">youth-dominated protests</a> were instrumental in bringing Abiy to power. </p>
<p>Recognising this, Abiy and his allies <a href="https://www.theguardian.com/world/2018/jul/08/abiy-ahmed-upending-ethiopian-politics">promised to address</a> the demands of the youth for inclusion. This naturally created high expectations. </p>
<p>But more than four years after this promise, the situation for Ethiopia’s large youth population looks bleak. It’s <a href="https://www.theeastafrican.co.ke/tea/rest-of-africa/ethiopia-fractured-after-two-years-of-war-4007368">arguably even more so</a> than before. A two-year war in the country’s northern region of Tigray reinforced ethnic divisions and created a humanitarian crisis. Unemployment rates are still high and the youth are still being mobilised for political ends.</p>
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Read more:
<a href="https://theconversation.com/why-young-ethiopians-in-oromia-and-sidama-fought-for-change-161440">Why young Ethiopians in Oromia and Sidama fought for change</a>
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<p>Employment schemes, such as the <a href="https://chilot.me/wp-content/uploads/2017/11/995_2017-ethiopian-youth-revolving-fund-establishment.pdf">Youth Revolving Fund</a> and <a href="https://jobscommission.gov.et/who-we-are/">Job Creation Commission</a>, have been used as mechanisms to silence and co-opt the youth. Youth protest movements have either been co-opted into the established party machinery or turned into militarised vigilante groups. These became instrumental in the <a href="https://theconversation.com/ethnic-violence-in-tigray-has-echoes-of-ethiopias-tragic-past-150403">2020 war in Tigray</a>. </p>
<h2>Co-option</h2>
<p>Our <a href="https://www.cmi.no/publications/7829-neglect-control-and-co-optation-major-features-of-ethiopian-youth-policy-since-1991">case study of the Youth Revolving Fund</a> shows that this government scheme failed to create sustainable job opportunities and improve livelihoods. </p>
<p>Introduced at the height of the youth-dominated protest in <a href="https://www.youtube.com/watch?v=2dj-EKYZ8AA">2017</a>, the scheme was used to pacify the youth. Consequently, it lacked sufficient capacity and skills training components. Loans were made without proper guarantees for repayment, preventing money from revolving and becoming available to fund new youth projects. </p>
<p>Our study of regime-youth interactions in Oromia and Amhara – the most populous regional states in Ethiopia and home to the youth protests – revealed that the government resorted to co-opting and repressing young people. </p>
<p>In Oromia, Ethiopia’s largest state, material co-option was seen in the distribution of credit, land, rights over resources and even condominium housing. </p>
<p>In Amhara, in north-west Ethiopia, rhetorical co-option was used. The worldview dominant among protesters was ostensibly adopted so as to get their support. Abiy appeared to castigate the country’s federal system and emphasise “national unity”. </p>
<p>We also observed institutional co-option: bringing activists and opposition leaders into government. </p>
<h2>Repression</h2>
<p>While the immediate post-2018 period saw a decline in repressive tactics, it resumed as the youth <a href="https://www.reuters.com/article/us-ethiopia-oromos-insight-idUSKCN1N7108">started to challenge</a> the Abiy regime. </p>
<p>The Prosperity Party considers Oromia its home base – Abiy is considered an Oromo leader. The party was, therefore, less likely to tolerate dissent in the region. This, coupled with an active insurgency from the Oromo Liberation Army, made Oromia youth exceptionally vulnerable to repression. Arbitrary mass arrests and a crude counter-insurgency resulted in severe human rights violations. </p>
<p>In Amhara, the government resorted to repression as youth protests <a href="https://www.theguardian.com/world/2022/jul/05/villagers-massacred-western-ethiopia-says-state-appointed-body">returned</a> in 2019. </p>
<p>The government relaxed the use of force as it needed the Amhara youth following the outbreak of war in Tigray in 2020. Repression resumed when the government felt the initial threat from the Tigray People’s Liberation Front had been reversed.</p>
<h2>Next steps</h2>
<p>Co-option and repression weakened and fragmented the youth movements responsible for the anti-government protests of 2014-2018 in Ethiopia. </p>
<p>The war in Tigray – which is <a href="https://www.dw.com/en/cease-fire-agreed-to-stop-ethiopias-tigray-conflict/a-63640781">currently on pause</a> – also resulted in the heavy militarisation of the youth, especially in the Amhara region. </p>
<p>Our research demonstrates that governments coming to power riding a wave of youth protests can nonetheless resort to authoritarian tactics to neutralise dissent from the same movements. In authoritarian contexts, translating protest gains into genuine political (and economic) gains is an uphill battle. </p>
<p>The alternative is to think strategically about young people’s potential to achieve the “prosperity” the ruling party promises. </p>
<p>We also found that youth employment schemes can be turned into instruments to silence the youth.</p>
<p>Deeper analyses of youth-specific policies should be contextually grounded to reveal possible authoritarian uses beyond official objectives.</p><img src="https://counter.theconversation.com/content/195601/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lovise Aalen receives funding from the Norglobal programme at Research Council of Norway (project no. 288489). </span></em></p><p class="fine-print"><em><span>Amanuel Tesfaye is an associate researcher under the Youth in Africa project, currently writing on regime-youth interactions in post-2018 Ethiopia.</span></em></p>Governments coming to power riding a wave of youth protests can employ authoritarian tactics to silence dissent from the same movements.Lovise Aalen, Senior Researcher, Political Science, Chr. Michelsen InstituteAmanuel Tesfaye, Lecturer, Addis Ababa UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1900842022-09-11T08:23:27Z2022-09-11T08:23:27ZJob creation in South Africa: the president’s advisors discuss what it will take<figure><img src="https://images.theconversation.com/files/483271/original/file-20220907-14-vx202z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's education system has not given people numeracy and technical skills needed for jobs like plumbing. </span> <span class="attribution"><span class="source">Mujahid Safodien/AFP via Getty Images</span></span></figcaption></figure><p><em>At the end of 2021, South Africa recorded its highest unemployment rate since the dawn of democracy, at 35.3%. The figure has marginally dropped but there is still concern about how the country will tackle this issue. Dori Posel spoke to Trudi Makhaya, economic advisor to South Africa’s President Cyril Ramaphosa, as well as Kenneth Creamer and Liberty Mncube, who are on the Presidential Economic Advisory Council, about unemployment, job creation, the informal sector and the country’s challenges with excessive market power.</em> </p>
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<p><strong>Dori Posel:</strong> South Africa has not been very successful in chipping away at a very high rate of unemployment. What could help?</p>
<p><strong>Kenneth Creamer:</strong> There is a strong correlation between growth and job creation. The question is, why doesn’t South Africa have enough growth? I would say that there are historical and current factors.</p>
<p>Historically, colonialism and apartheid have meant that the country’s capital markets, our capital formation, has been distorted, and infrastructure investment has been distorted. If you look around the country, you can see that people in areas that were designated as “bantustans” under apartheid still don’t have the same level of health, education, and access to security services.</p>
<p>And capital formation itself was pretty much linked to mining. There was some diversification, but the country’s industrial policy was stunted and shaped in a way that didn’t create enough jobs.</p>
<p>The current reasons include vested interests that make it difficult to implement the policies that we need. For example, it is difficult to do the right thing and to implement the energy transition due to vested interests.</p>
<p>A second current problem has been weak state capacity, corruption and stealing. </p>
<p>We need growth to create jobs. And we need more growth to create enough jobs to cater for the growing size of South Africa’s labour market. In particular, we need expanded capital formation and infrastructure. And it’s really important that we look at our fixed investment levels. During the COVID pandemic, capital investment fell to 13% of GDP – a historic low. Government, state-owned companies and the private sector must all double their capital investment if South Africa is to increase its capital investment to the 25%-30% of GDP level required to reduce unemployment.</p>
<p><strong>Dori Posel:</strong> Why are there so few people starting very small businesses in the informal sector? </p>
<p><strong>Trudi Makhaya:</strong> The informal sector in countries similar to South Africa creates lots of jobs. In South Africa, the informal sector accounts for about 10% of jobs. That tells us South Africa has diverged from other emerging markets.</p>
<p>Our regulatory frameworks are geared towards corporates. And you can go through many aspects of regulation – zoning, how municipalities enforce bylaws, regulations and safety standards for food. You need safety standards, but you also need an enabling environment where you could have a street food culture like in Asian countries. South Africa’s regulatory environment doesn’t do that. We really over-regulate. We have a lot of requirements that are not appropriate for smaller businesses. That’s why we’ve been working on red tape reduction.</p>
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Read more:
<a href="https://theconversation.com/wto-head-ngozi-okonjo-iweala-how-trade-can-help-beat-inequality-190089">WTO head Ngozi Okonjo-Iweala: how trade can help beat inequality</a>
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<p>The human capital element is also important. South Africa’s education system has not given people the basic education and technical skills they need – to become plumbers, for example. It’s those those kinds of activities that become self employment activities in many developing countries. India comes to mind in terms of coding, and people being able to develop businesses from that. It involves fairly low skills.</p>
<p>A lot of the work that we need to do is in improving the quality of basic education. And it’s not about the quantity of money that’s been spent. As a proportion of GDP, South Africa’s education expenditure is already in line with many other countries. We’re not getting the outcomes that we need to get. </p>
<p>There are other factors too, including access to finance. There are so many concentrated industries; it becomes quite difficult for small businesses to thrive.</p>
<p><strong>Dori Posel:</strong> Excessive market power could also inhibit the growth of small businesses. Is there excessive market power in South Africa and what has been the response to this from competition policy?</p>
<p><strong>Liberty Mncube:</strong> South Africa has an excessive market power problem. Here are a few examples. For those lucky enough to afford private healthcare services, there are only three main hospital groups; in air travel, there are two main airlines. One firm controls more than 40% of each of the beer, spirits, ready-to-drink and cigarette industries. </p>
<p>The competition authorities have uncovered anti-competitive practices facilitated by excessive market power in many areas of business activity, including maize meal, bread, milk, poultry, beer, wheat flour, healthcare, aluminium, steel, bricks, cement and ticketing services. In the last two years, the Competition Tribunal has issued 48 orders in which firms have admitted to excessive market power and excessive pricing, not only in personal protective equipment including face masks, hand sanitisers and surgical gloves, but also in eggs and maize meal. </p>
<p>Excessive market power increases the cost of goods and services for consumers, depresses wages, stunts investment, blocks entrepreneurship, and retards innovation. It also concentrates economic power, which monopolies and oligopolies use to win favourable policies and further entrench their dominance. At the same time, excessive market power creates profits that flow disproportionately to the affluent in society. The left-out majority of South Africans are more likely to be the victims of excessive market power and have the least ability to avoid its costs. This dynamic exacerbates income inequality and inequality of economic opportunity. </p>
<p>There have been two responses from competition policy. </p>
<p>The first one has been embedding equality considerations into competition law. The 2018 amendments exemplify this, by placing emphasis on participation by black owned firms and small businesses as well as promoting a broad spread of ownership (inclusive of workers).</p>
<p>The second response concerns the effect competition policy generates through the promotion of greater competitiveness and subsequently on economic equality. For example, when Pepsi wanted to buy Pioneer Foods, one of the major agro-processing firms in South Africa, the Competition Tribunal approved the deal subject to a condition that it set up a broad based worker trust and implement a broad based black economic empowerment ownership plan. Last year, when ECP, a US based investment fund, sought to buy Burger King, the Competition Tribunal approved the deal subject to local procurement and creation of a worker owner plan in Burger King South Africa. </p>
<p><strong>Dori Posel:</strong> I would like us to consider another set of constraints on job growth, and this concerns issues around trust and corruption. South Africa is often described as having a “trust deficit”. What are your thoughts on how trust can be rebuilt in our institutions, and by implication, how our institutions can be made more trustworthy? </p>
<p><strong>Trudi Makhaya:</strong> The one thing that has been highlighted in various instances in the South African case is the culpability of the private sector. We see a lot of the companies slowly coming to the reckoning. </p>
<p>But I think if we’re going to rebuild trust, I would suggest that they have a lot more to do in terms of showing they have turned a corner, and understand the economic harm that has been done.</p>
<p>On the flip side of it all, we have a demoralised public sector. We do have good people who tend to err on over-compliance, being afraid to take risks. Being afraid to be innovative. </p>
<p>We also have to strike the balance between transparency and due process, and accepting genuine mistakes which are not related to corruption. </p>
<p>*<em>This is an edited excerpt of the University of the Witwatersrand School of Economics and Finance’s centenary webinar titled 100 Years of Economics at Wits: Reflecting on the Past, Looking to the Future. The event can be <a href="https://www.wits.ac.za/sef/webinar-series/">watched here</a>.</em></p><img src="https://counter.theconversation.com/content/190084/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dorrit Posel does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>High unemployment rates are among South Africa’s biggest challenges. Three of the president’s advisors talk through what is needed to change the status quo.Dorrit Posel, Professor in the School of Economics and Finance, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1851642022-07-20T13:52:52Z2022-07-20T13:52:52ZNigeria hasn’t been able to produce steel: remanufacturing could be the solution<figure><img src="https://images.theconversation.com/files/471457/original/file-20220628-14774-yzumkf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A steel plant.</span> <span class="attribution"><span class="source">Photo by Soeren Stache/picture alliance via Getty Images</span></span></figcaption></figure><p>Nigeria has pumped more than US$8 billion into <a href="https://www.ajaokutasteel.com/site/pagef.php?cnt=Background%20of%20Organization">Ajaokuta Steel Company</a>, a project which began more than 40 years ago but has yet to produce one tonne of steel. </p>
<p>Several attempts have been made to bring the plant into production, but without success. It was built to 98% capacity by <a href="https://africa-executive.com/industry-outlook/russia-ukraine-war-stalls-resuscitation-of-nigerias-steel-plant/">the Soviet Union’s Tyazpromoexport</a>. But the lack of a rail line around the plant, and changes in political and operational management over the years, stymied completion. </p>
<p><a href="https://www.sunnewsonline.com/ajaokuta-steel-complex-another-failed-project/">Bilateral discussions in 2019</a> raised the possibility of Russian funding to resuscitate the steel plant, but the COVID-19 pandemic and the Russia-Ukraine crisis may have stalled any unofficial agreements.</p>
<p>Another problem for the plant is that some of its installed equipment may have been corroded and degraded by now.</p>
<p>Steel corrodes quickly in acidic environments. Consumer-grade steel and other iron-rich metals can develop iron oxide (or rust) after just four or five days of exposure. Corrosion of parts has been reported by a team of Nigerian and Ukrainian experts auditing the plant.</p>
<p>Still, the Nigerian federal government is now having yet another go. It is looking for a core investor that can get it <a href="https://sweetcrudereports.com/ajaokuta-steel-concession-asset-doesnt-mean-loss-ownership-govt/">running profitably</a> on a concession basis.</p>
<p>The cost of revamping the steel company was put at <a href="https://businessday.ng/news/article/fg-inaugurates-implementation-committee-for-ajaokuta-steel-resuscitation/">$1.4 billion</a> in 2020.</p>
<p>Instead of concessioning, we propose remanufacturing as a way of rescuing the plant. <a href="https://doi.org/10.1016/j.spc.2021.02.013">Remanufacturing</a>
is an industrial process whereby used or broken down products or components are restored to useful life. </p>
<p>Based on <a href="https://doi.org/10.1007/s13243-020-00086-8">our research</a>, we argue that remanufacturing’s economic, social and environmental advantages would solve the Ajaokuta Steel Company Limited problem, make it competitive, meet contemporary demands of sustainable manufacturing and get it operational.</p>
<h2>Nigerian demand for steel</h2>
<p>Ajaokuta Steel was conceived in 1958 to meet Nigeria’s steel demand and launch Nigeria’s and West Africa’s manufacturing sector. The idea of a large-scale national steel production plant was based on the <a href="https://books.google.com.au/books/about/Steel_Development_and_Nigeria_s_Power_St.html?id=yzbUAAAAMAAJ&redir_esc=y">argument</a> that no country could talk about power status or the defence of national interests without its own steel industry. </p>
<p>Nigeria had a <a href="https://worldpopulationreview.com/countries/nigeria-population">fast growing population</a>, with rising demand for manufactured goods. A number of manufacturing <a href="https://www.ide.go.jp/library/English/Publish/Reports/Vrf/pdf/418.pdf">industries</a> sprang up in the 1960s and the 1970s. Local demand for steel products was about 3.5 million tonnes a year between 1985 and 1995, the bulk of which could only be met through imports. </p>
<p>The manufacturing industry <a href="https://data.worldbank.org/indicator/NV.IND.MANF.ZS?locations=NG">grew</a> from 9% in 1985 to 19% in 1995, encouraging government’s industrialisation drive. </p>
<h2>Challenges of concessioning</h2>
<p>As to how to meet that demand, a concessioning agreement for a steel plant presents some key challenges. </p>
<p>Although the concession may put the steel plant into the hands of a competent investor, it is only for 10 years. Then legal challenges may arise. The most recent operator, an Indian company called Global Steel Holdings Limited, had its 10-year concession agreement revoked by the Nigerian government and the matter ended in an <a href="https://dailytrust.com/despite-n4trn-investment-hope-dims-for-ajaokuta-steel-take-off">out-of-court settlement</a> in 2016.</p>
<p>A concession agreement with foreign operators cannot guarantee the involvement of local human resources, which Nigeria’s manufacturing desperately needs. </p>
<h2>Remanufacturing inputs</h2>
<p>A major challenge of reviving the Ajaokuta Steel plant is that much of its equipment is in a broken-down state. </p>
<p>We <a href="https://doi.org/10.1016/j.spc.2021.02.013">argue that</a> remanufacturing could restore the equipment and get it working. It could also develop the local capacity for remanufacturing among Nigerians.</p>
<p><a href="https://doi.org/10.1016/j.spc.2021.02.013">Remanufacturing</a> is an industrial process of steps that make make a used product as good as new. It is a key <a href="https://ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview">circular economy strategy</a>. </p>
<p>Broken-down parts are referred to as “cores”. They are passed through a number of standardised remanufacturing operations – inspection, sorting, disassembly, part reprocessing or refurbishment, reassembly and testing – to ensure they meet product standards. </p>
<p>The resulting output is a product which meets or exceeds the quality and performance <a href="http://dx.doi.org/10.1016/j.jclepro.2011.06.019">standards</a> of a newly manufactured product. </p>
<p>Studies suggest that remanufacturing can save up to <a href="https://wedocs.unep.org/handle/20.500.11822/31631">50%</a> of the cost of a newly manufactured product, 60% of the energy, 70% of the material and <a href="https://www.mdpi.com/2071-1050/10/7/2427">80%</a> of the air pollutant emissions. </p>
<p>Remanufacturing is labour intensive, so it can support new jobs and other jobs in the supply chain, such as transporting cores from the original manufacturers or disposal site to the remanufacturer’s site. </p>
<p>The UN Environmental Programme has studied how remanufacturing can <a href="https://wedocs.unep.org/handle/20.500.11822/31631">retain value</a>, finding that it can reduce new material requirements by between 80% and 98% and increase skilled labour hours by up to 120%.</p>
<p><a href="https://link.springer.com/chapter/10.1007/978-3-319-71084-6_28">Nigeria does engage in some remanufacturing</a>, for example remanufacturing of <a href="https://tribuneonlineng.com/remanufacture-answer-to-nigerias-poor-healthcare-equipment-circular-economy-challenges/">medical devices</a>, but it is largely unorganised and driven by small, independent operators. </p>
<h2>What makes remanufacturing ideal for Ajaokuta</h2>
<p>For remanufacturing to happen, cores must be available. It must be possible to disassemble the cores. And there must be labour and access to customers. </p>
<p>We have assessed the challenge with the Ajaokuta Steel Company Limited and concluded that the barriers to remanufacturing can be overcome. </p>
<p>First, the broken-down components in the steel facility form the remanufacturing cores. </p>
<p>Most of these <a href="https://www.pulse.com.gh/bi/politics/politics-after-gulping-dollar8-billion-in-39-years-ajaokuta-steel-factory-yet-to/6mp0mm8">mechanical components</a> (gearboxes, conveyor belts, cranes, blast furnace) can be disassembled and remanufactured.</p>
<p>The steel plant would serve as the original equipment manufacturer (and customer) and a supply route could be created using the road networks around <a href="https://punchng.com/ajaokuta-steel-experts-fault-fgs-plan-to-engage-british-firm/">Ajaokuta</a>, where the plant is located. A long term transport system should include a rail line to enable access to coal sites, for instance.</p>
<p>Nigeria has a <a href="https://www.statista.com/statistics/1121317/age-distribution-of-population-in-nigeria-by-gender/">young population</a> which could provide the unskilled and skilled labour for remanufacturing. </p>
<h2>How to revive the steel plant</h2>
<p>For effective engineering management, we propose that <a href="https://africa-executive.com/industry-outlook/russia-ukraine-war-stalls-resuscitation-of-nigerias-steel-plant/">Tyazpromoexport</a>, the Russian company that first installed the Ajaokuta Steel plant, should work with Nigerian engineers to remanufacture the plant. The same company has successfully installed steel plants in <a href="http://tyazh.ru/en/projects/">Egypt, Algeria, Pakistan and India</a>.</p>
<p>We recommend the following broad steps:</p>
<ul>
<li>audit and assess worn-out and broken-down components</li>
<li>determine what can be remanufactured and at what cost</li>
<li>assess supporting stakeholders: independent remanufacturers, local routes, raw materials, facilities and labour</li>
<li>remanufacture identified parts</li>
<li>procure parts that can’t be remanufactured</li>
<li>install remanufactured and newly procured parts.</li>
</ul>
<p>We understand that Ajaokuta Steel Company Limited faces other challenges. They include the <a href="https://www.sunnewsonline.com/ajaokuta-steel-complex-another-failed-project/">politicisation</a> of the steel project, the <a href="https://guardian.ng/business-services/russia-ukraine-crisis-may-stall-resuscitation-of-ajaokuta-steel-plant/">Russia and Ukraine crisis</a> and the resulting geopolitical fall-out. </p>
<p>However, with over <a href="https://www.pulse.com.gh/bi/politics/politics-after-gulping-dollar8-billion-in-39-years-ajaokuta-steel-factory-yet-to/6mp0mm8">$8 billion</a> already invested, zero production and the corroding of the facility, there is a need to urgently revive the steel complex.</p>
<p>Remanufacturing presents an excellent opportunity to resuscitate it in a green, efficient and sustainable manner.</p><img src="https://counter.theconversation.com/content/185164/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Ajaokuta steel plant stands unused after 40 years of construction and US$8 billion in investment.Okechukwu Okorie, Lecturer in Sustainable Manufacturing, University of ExeterNnaemeka Vincent Emodi, Research Fellow, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1810172022-04-24T14:02:45Z2022-04-24T14:02:45ZCompanies are mitigating labour shortages with automation — and this could drastically impact workers<figure><img src="https://images.theconversation.com/files/458963/original/file-20220420-22-3lmahn.jpg?ixlib=rb-1.1.0&rect=6%2C20%2C4516%2C3241&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The pandemic and the aging population are both partially responsible for the current labour shortage.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Last month, unemployment in Canada reached a record low of <a href="https://www.ctvnews.ca/business/canada-s-jobless-rate-has-hit-a-record-low-1.5853649">5.2 per cent</a>. Alongside low unemployment, many industries saw — and are still seeing — a worker shortage, with the number of job vacancies in Canada reaching 900,000 in January.</p>
<p>Both of these things are good for workers, right? </p>
<p>Prospective employers, desperate for new recruits, are “<a href="https://www.cbc.ca/news/canada/new-brunswick/hiring-incentives-labour-shortage-1.6296609">throwing cash at applicants</a>.” Many lower wage jobs have even seen an <a href="https://www.cbc.ca/radio/costofliving/the-price-of-food-is-going-up-maybe-your-salary-should-too-1.6388201/want-a-raise-now-is-the-perfect-time-to-ask-for-it-career-experts-say-1.6403924">increase in pay</a>, like the <a href="https://www.wsj.com/articles/walmart-raises-pay-to-attract-truck-drivers-11649336400">20 per cent wage increase</a> for truckers recently announced by Walmart.</p>
<p>The pandemic is partially responsible for this labour shortage, as the immigrant workforce supply dried up throughout the lockdown. However, the <a href="https://www.thestar.com/business/opinion/2021/11/07/labour-shortage-the-answer-is-to-bring-older-adults-back-into-the-workforce.html">aging population</a> in Canada has also been a factor.</p>
<h2>Is automation the answer?</h2>
<p>The solution to the worker shortage proposed by the <a href="https://www.cbc.ca/news/business/job-skills-shortage-1.6409237">Business Development Bank of Canada’s chief economist</a> is <a href="https://www.businesswire.com/news/home/20220119005323/en/Survey-Reveals-Businesses-Are-Doubling-Down-on-Automation-to-Balance-Against-the-Global-Labor-Shortage">increased automation</a>. </p>
<p>Advocates and critics have long argued over the impact of automation on employment. Advocates believe automation can be used to perform <a href="https://www.finance-monthly.com/2021/11/automating-the-mundane-how-it-solutions-can-rescue-staff-from-needlessly-repetitive-time-intensive-tasks/">mundane</a> or <a href="https://www.automate.org/blogs/how-robots-are-taking-on-the-dirty-dangerous-and-dull-jobs">physically demanding</a> jobs, freeing up workers to learn new skills and take on better jobs.</p>
<p>Recent <a href="https://doi.org/10.1287/mnsc.2020.3812">research from the University of Pennsylvania</a> supports the argument that automation creates jobs. The study found that investing in robots boosted the efficiency and quality of work while reducing costs, increasing productivity and creating more job opportunities. Similarly, a 2020 report from Statistics Canada also found that <a href="https://theconversation.com/the-robot-revolution-is-here-how-its-changing-jobs-and-businesses-in-canada-155267">companies that used robots hired more human workers</a>.</p>
<p>The impact of automation on work can only be assessed over the longer term and according to whether vacancies are created by those leaving their jobs or retiring and whether the activities of those departing are fully automated. </p>
<p>But critics have argued that automation and advancements in technology create an <a href="https://www.oxfordreference.com/view/10.1093/oi/authority.20110803095946632">hourglass economy</a> where opportunities only exist for highly and lowly skilled workers, leaving less work for semi-skilled workers who must either increase their skills or take <a href="https://www.resolutionfoundation.org/app/uploads/2014/08/The-Changing-Shape-of-the-UK-Job-Market.pdf">lower-skilled (and waged) work</a>.</p>
<figure class="align-center ">
<img alt="A building in an empty parking lot that says BLOCKBUSTER across the front" src="https://images.theconversation.com/files/458915/original/file-20220420-11-ip0gfs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/458915/original/file-20220420-11-ip0gfs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=416&fit=crop&dpr=1 600w, https://images.theconversation.com/files/458915/original/file-20220420-11-ip0gfs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=416&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/458915/original/file-20220420-11-ip0gfs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=416&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/458915/original/file-20220420-11-ip0gfs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/458915/original/file-20220420-11-ip0gfs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/458915/original/file-20220420-11-ip0gfs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Netflix automated the video rental business while Blockbuster retained its physical labour-intensive model until it was too late.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Jonathan Hayward</span></span>
</figcaption>
</figure>
<p>A common example used to illustrate the detriment of technology to employment is the case of <a href="https://hbr.org/2017/04/automation-makes-things-cheaper-so-why-doesnt-it-feel-that-way">Blockbuster</a>. Once a titan of physical video rental with 60,000 employees, Blockbuster was unable to compete with Netflix’s (who only had around 2,500 employees) new streaming services and <a href="https://www.cnbc.com/2020/09/22/how-netflix-almost-lost-the-movie-rental-wars-to-blockbuster.html">filed for bankruptcy in 2010</a>. Netflix automated the video rental business while Blockbuster retained its physical labour-intensive model until it was too late.</p>
<h2>Automation might not be so bad after all</h2>
<p>The reason why automation hasn’t had a more detrimental impact for workers can be explained by two factors. Firstly, employees are also consumers. To reduce employment is to reduce the market for products, which is bad for <a href="https://www.americanprogress.org/article/raising-minimum-wage-boost-economic-recovery-reduce-taxpayer-subsidization-low-wage-work/">manufacturers and capitalism itself</a>. </p>
<p>As a management professor, I often use an incident that supposedly occurred between <a href="https://www.economist.com/babbage/2011/11/04/difference-engine-luddite-legacy">Henry Ford II and Walter Reuther</a>, leader of the United Automobile Workers trade union, to illustrate this point. </p>
<p>While showing Reuther the new automated assembly lines at his car factory, Ford subtly threatened the future of the union: “How are you going to get those robots to pay your union dues?” Unfazed, Reuther replied: “How are you going to get them to buy your cars?” </p>
<figure class="align-center ">
<img alt="Two huge robotic arms sitting in a large, empty garage" src="https://images.theconversation.com/files/458961/original/file-20220420-15105-hp4bir.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/458961/original/file-20220420-15105-hp4bir.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/458961/original/file-20220420-15105-hp4bir.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/458961/original/file-20220420-15105-hp4bir.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/458961/original/file-20220420-15105-hp4bir.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/458961/original/file-20220420-15105-hp4bir.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/458961/original/file-20220420-15105-hp4bir.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">RoboTire patented robotic systems use software to automatically change vehicle tires.</span>
<span class="attribution"><span class="source">(Rick Osentoski/AP Images for RoboTire)</span></span>
</figcaption>
</figure>
<p>Secondly, firms can easily resolve issues with new technology by employing human workers to take over. Take for example, the failure of automation in the fast food industry and the tale of <a href="https://hbr.org/2021/11/automation-doesnt-just-create-or-destroy-jobs-it-transforms-them">Flippy, the burger flipping robot</a>, that lasted a single day, only to be replaced by human workers when it couldn’t keep up with demand. Such instances reveal the way in which workers offer an easy substitute for automation that fails to cut the mustard (or flip the burger).</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/covid-19-has-fuelled-automation-but-human-involvement-is-still-essential-153715">COVID-19 has fuelled automation — but human involvement is still essential</a>
</strong>
</em>
</p>
<hr>
<p>The current situation is different because employers are struggling to source workers. The reliance on automation is becoming a necessity, rather than a source of competitive advantage. Moreover, the labour shortage means that turning to workers as a substitute for failing technology is a less viable strategy, so firms are more likely to persevere in introducing new technology. </p>
<h2>The future of automation</h2>
<p>It has been argued that about half of the activities undertaken by workers could be <a href="https://www.mckinsey.com/%7E/media/mckinsey/featured%20insights/Digital%20Disruption/Harnessing%20automation%20for%20a%20future%20that%20works/MGI-A-future-that-works-Executive-summary.ashx">automated by 2055</a>. This does not mean that all of these activities will be automated. Nor does it mean that 50 per cent of jobs will necessarily disappear in the next 30 years without other jobs emerging as a result. </p>
<p>However, current circumstances, especially the shortage of workers, is a powerful motivation for automation. We could see a significant increase in automation use in the workplace over the next few years. </p>
<p>The challenges of filling worker vacancies may be good news for workers now, but the longer terms consequences still remain to be seen.</p><img src="https://counter.theconversation.com/content/181017/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geraint Harvey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With employers struggling to hire enough workers, reliance on automation is becoming more of a necessity than just a source of competitive advantage.Geraint Harvey, DANCAP Private Equity Chair in Human Organization, Western UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1699522021-10-15T07:00:49Z2021-10-15T07:00:49ZMunicipalities can play a key role in South Africa’s economic development. Here’s how<figure><img src="https://images.theconversation.com/files/426493/original/file-20211014-16-1ies09.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Medium-sized towns like Mossel Bay have a key role to play in South Africa's development.</span> <span class="attribution"><span class="source">Photo by Hoberman Collection/Universal Images Group via Getty Images</span></span></figcaption></figure><p>Local economic development and better municipal service delivery are vital if South Africa wants to broaden economic participation and reverse its <a href="http://www.statssa.gov.za/publications/P0211/P02112ndQuarter2021.pdf#page=8">unemployment trend</a>.</p>
<p>To achieve these objectives, it is necessary to strengthen municipal finances and investment. Good municipal governance is a prerequisite. <a href="https://www.sacities.net/wp-content/uploads/2021/03/IMC-Report-2021.pdf#page=12">Intermediate city municipalities</a> have an important role to play, because urban development is critical for growth and investment. It may also reduce the pressure caused by urbanisation to metros. </p>
<p>Municipalities should:</p>
<ul>
<li><p>provide democratic and accountable governance for local communities</p></li>
<li><p>ensure the provision of services in a sustainable way </p></li>
<li><p>promote social and economic development as well as a safe and healthy environment </p></li>
<li><p>encourage the involvement of communities in matters of local government. </p></li>
</ul>
<p><a href="https://www.agsa.co.za/Portals/0/Reports/MFMA/201920/Section%2001%20Executive%20Summary.pdf">Current outcomes</a> suggest that South Africa’s municipalities are failing in many of these respects.</p>
<p>The consequences for the country are dire and widespread. Municipal failure not only affects large businesses. It also has an impact on households, small, medium and micro-enterprises and other investors in local economies.</p>
<p><a href="http://www.statssa.gov.za/?p=14660">Economic growth</a>, job creation and local economic development initiatives depend on municipal finances. They become constrained when local governments don’t function well. Households directly suffer the consequences when basic service delivery is poor. But the problems extend beyond the household level. </p>
<p>Municipalities need to provide the infrastructure and basic services that support a favourable investment climate. Without this investment, deepening unemployment and poverty may follow. This has the further effect of eroding the local tax base, increasing municipal dependence on fiscal transfers and worsening South Africa’s already constrained fiscal environment. </p>
<h2>Ripple effects</h2>
<p>Two examples illustrate how municipal failure can have a direct negative impact on local economic development. </p>
<p>The first is Clover, the food and beverage company. It has announced that it’s <a href="https://www.iol.co.za/business-report/companies/clover-closes-sas-biggest-cheese-factory-due-to-poor-service-delivery-by-north-west-town-d737612c-a00c-4e4b-92c8-b71137d7b3f9">closing its cheese processing facility</a> in Lichtenburg in the North West province. Production will be moved to an existing plant outside Durban in KwaZulu-Natal. </p>
<p>The company attributed the decision to ongoing problems with service delivery by the Ditsobotla Local Municipality. It specifically mentioned water and electricity outages as well as the poor quality of roads. The move is estimated to lead to 330 job losses in the Lichtenburg economy.</p>
<p>Another example is <a href="https://www.astralfoods.com/">Astral Foods</a>, one of South Africa’s largest poultry producers. The company owns a processing plant in Standerton in the Lekwa municipality. Astral took legal action against the municipality due to severe supply disruptions caused by disintegrating infrastructure. Power cuts and water shortages reportedly <a href="https://www.astralfoods.com/assets/Documents/News/News/2020/Astral%20Final%20Results%20Press%20Release%20for%20the%20year%20ended%2030%20September%202020.pdf#page=2">cost the company around R62 million</a> in its latest financial year. </p>
<p>A court ordered the municipality to submit a long-term plan to repair and improve the infrastructure.</p>
<p>But this didn’t improve outcomes. Earlier this year <a href="https://www.news24.com/fin24/companies/standerton-chicken-producer-gets-court-order-to-force-govt-to-supply-town-with-water-electricity-20210413">a new court order</a> was issued. This required national government and the treasury to intervene and prepare a financial recovery plan. </p>
<h2>The scale of the problem</h2>
<p>We set out to better understand the degree of municipal failure across different types of municipalities. In <a href="https://www.ber.ac.za/BER%20Documents/BER-Research-Notes/?doctypeid=1070#15007">our research note</a> we drew a comparison between metros, <a href="https://www.sacities.net/wp-content/uploads/2021/03/IMC-Report-2021.pdf#page=9">intermediate city municipalities</a>, and other local municipalities.</p>
<p>The population density, potential economic activity and resource base of intermediate city municipalities suggest that good local government could unlock substantial economic opportunities in these hubs.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/426442/original/file-20211014-27-z3wshs.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/426442/original/file-20211014-27-z3wshs.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=642&fit=crop&dpr=1 600w, https://images.theconversation.com/files/426442/original/file-20211014-27-z3wshs.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=642&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/426442/original/file-20211014-27-z3wshs.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=642&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/426442/original/file-20211014-27-z3wshs.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=807&fit=crop&dpr=1 754w, https://images.theconversation.com/files/426442/original/file-20211014-27-z3wshs.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=807&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/426442/original/file-20211014-27-z3wshs.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=807&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Overview of different spheres of local government.</span>
<span class="attribution"><span class="source">Bureau for Economic Research/The State of South African Cities, 2016</span></span>
</figcaption>
</figure>
<p>Creating economic opportunities in intermediate city municipalities may also reduce some of the service delivery pressure caused by <a href="https://pmg.org.za/page/Urbanisation">urbanisation</a> to metros. It may help create a less skewed spatial distribution of economic activity and opportunities. </p>
<p>It is important to remember that municipalities have varying blends of service delivery responsibilities across rural and urban zones. They face different opportunities in terms of access to revenue. Hence, not all face an equal set of challenges. </p>
<p>In addition, municipalities form part of the broader architecture of government. They are therefore interdependent on national, provincial and district government functions. They also need entities such as the power utility <a href="https://www.eskom.co.za/Pages/Landing.aspx">Eskom</a> and the water boards to function properly. Municipalities cannot influence local economic development in isolation from these agents. </p>
<p><a href="https://www.ber.ac.za/BER%20Documents/BER-Research-Notes/?doctypeid=1070#15007">Our research note</a> identifies several cross-cutting problems within South Africa’s local government sphere.</p>
<p>We look at service delivery and explain how issues in supply chain management and the audit process can cause poor or non-delivery of basic services. We also highlight some financial performance metrics that contribute to poor outcomes. Examples include low expenditure on repairs and maintenance and inadequate debt collection rates.</p>
<p>Finally, personnel vacancy rates are high. And there is a lack of competencies. Political influence and interference in the appointment of managers and other municipal executives contribute to the problem. </p>
<h2>Solutions</h2>
<p>It is important to ensure that professionals have the necessary qualifications. </p>
<p>It may help if municipal managers are required to register with professional bodies. What may also assist is ensuring that appointments are merit-based and made without undue political influence. This is particularly important within the administrative arm of local municipalities.</p>
<p>Also, a mechanism that sanctions or removes municipal officials from their positions if they are consistently underperforming might contribute to better outcomes.</p>
<p>Supply chain management and audit processes need to prevent fraud and corruption. But they shouldn’t hamper spending. Nor should they shift the focus away from core municipal functions. The need to find a less cumbersome supply chain management process is critical. This should have a stronger focus on strengthening financial management and responsibility for service delivery. It wouldn’t simply focus on the minutiae of compliance and <a href="https://www.agsa.co.za/Portals/0/MFMA%202014-15/Section%201-9%20MFMA%202014-2015/FINAL%20MEDIA%20RELEASE%20(MFMA%202016)%20FN.pdf">post-facto audit interrogations</a>. </p>
<p>The regulatory system should enhance rather than paralyse service delivery. </p>
<p>The <a href="https://www.ber.ac.za/BER%20Documents/BER-Research-Notes/?doctypeid=1070#15007">complex developmental problems</a> that South Africa faces cannot be solved with local municipalities operating in isolation.</p>
<p>There is a need for better management of inter-jurisdictional collaboration between the players. They include municipalities, water boards, provinces, Eskom and national departments. </p>
<p>Public-private partnerships may also provide valuable opportunities. These could, for example, help improve the management, expansion, maintenance and operation of select revenue-generating components of service delivery. Water, sewerage and sanitation and solid waste management come to mind. </p>
<p>But not all municipalities have the skills to manage such projects. Many may need technical support. These initiatives should be planned well and should not be the consequence of inadequate capacity or skills within municipalities. These considerations could contribute to better outcomes and improved service delivery.</p>
<p>The important developmental role that intermediate city municipalities can play in creating employment and stimulating economic growth suggest that these areas in particular should be prioritised.</p>
<p><em>This article is an extract from <a href="https://www.ber.ac.za/BER%20Documents/BER-Research-Notes/?doctypeid=1070#15007">South Africa’s municipal challenges and their impact on local economic development</a>, a research note published by the Bureau for Economic Research at the University of Stellenbosch.</em></p><img src="https://counter.theconversation.com/content/169952/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The important developmental role that intermediate city municipalities can play in creating employment and stimulating growth suggests they should be prioritised.Johann Kirsten, Director of the Bureau for Economic Research, Stellenbosch UniversityHelanya Fourie, Senior Economist, Bureau for Economic Research, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1681242021-09-29T15:02:41Z2021-09-29T15:02:41ZSouth Africa’s employment tax incentive is not a success story<figure><img src="https://images.theconversation.com/files/422133/original/file-20210920-22-12fizgr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Young South Africans are bearing the brunt of the country's high joblessness numbers.</span> <span class="attribution"><span class="source">Anders Pettersson via Getty Images</span></span></figcaption></figure><p>South Africa has one of the highest unemployment rates <a href="https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?end=2020&name_desc=true&start=2020&view=map">in the world</a>. This was true even before unemployment increased as a result of the global financial crisis in 2008. And before COVID-19. </p>
<p>The country’s youth unemployment rate is <a href="https://theconversation.com/young-people-and-women-bear-the-brunt-of-south-africas-worrying-jobless-rate-167003">even higher than the average</a>. The (youth) employment tax incentive was supposed to help in addressing the problem. The incentive was <a href="https://pmg.org.za/bill/30/">adopted by Parliament in 2013</a> and came into effect in 2014. The original incentive offered to reduce the tax bill of firms that employed new workers between the ages of 18 and 29 who earned below R6,000 per month (US$400). The idea was that reducing the effective cost of hiring young workers, by subsidising up to 50% of their salary, would lead to firms creating more jobs for this group. </p>
<p>The policy was renewed in 2016 for another three years. And in 2018, shortly after Cyril Ramaphosa became president, it was extended for a further 10. The higher age limit remains at at 29. And it was made applicable to all new employees of firms operating in ‘special economic zones’ regardless of age. There are <a href="http://www.thedtic.gov.za/wp-content/uploads/SEZ-brochure_2021.pdf">currently</a> 11 formally designated such zones.</p>
<p>The adoption and implementation of the policy has been cited as a success story in two respects. Firstly, as a <a href="https://www.3ieimpact.org/evidence-hub/Evidence-impact-summaries/finding-ways-tackle-youth-unemployment-south-africa">triumph of evidence in public policy formulation</a>. Secondly, as <a href="https://www.news24.com/fin24/economy/sa-should-focus-on-creating-jobs-and-not-merely-paying-grants-says-mboweni-20210729">an effective approach to reducing unemployment that should be expanded</a>. </p>
<p>In a recently <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/dech.12676">published paper</a> I argue that the first claim is false and the second claim is not supported by existing evidence. </p>
<p>The analysis suggests that the decisions to adopt, extend and expand the policy were based on misrepresentations of the evidence available at the time. This was accompanied by concealing or downplaying the possible weaknesses and risks of the policy. </p>
<p>On top of this, the currently available evidence does not convincingly show any substantial effect on job creation. That means the incentive is effectively a subsidy to the profits of companies, so it’s increasing societal inequality rather than reducing it.</p>
<h2>Where it started</h2>
<p>The idea that reducing wages might increase employment seems fairly obvious. But it faces a number of serious challenges. </p>
<p>A lot has to do with the structure of the economy. If most unemployment in the country is ‘structural’ – which it is in South Africa – then simply reducing the direct cost of labour may have little effect. </p>
<p>Structural factors include many of the legacies of apartheid and colonialism:</p>
<ul>
<li><p>distance from work opportunities in urban areas</p></li>
<li><p>the sectoral structure of the economy and a lack of competition in some sectors</p></li>
<li><p>lack of skills or poor quality education, and,</p></li>
<li><p>various other dimensions of poverty that prevent working-age adults from fully participating in the economy. </p></li>
</ul>
<p>Historically, those who have favoured wage subsidies tend to one of two positions. They either downplay such factors and instead emphasise the role of trade unions in pushing up wages. Or they argue that a subsidy can offset the negative effects of structural factors on firms’ employment decisions.</p>
<p>While such debates have been happening for decades, the current employment tax incentive emerged from the work of a group of American economists appointed by then-president Thabo Mbeki to advise on economic growth. Their <a href="http://www.treasury.gov.za/comm_media/press/2008/Final%20Recommendations%20of%20the%20International%20Panel.pdf">final report in 2008</a> endorsed the idea of a youth wage subsidy in the form of a voucher of fixed value for all youth 18 and older that would subsidise their wage at any employer, on the condition that employers be allowed to fire such workers without having to provide reasons. </p>
<p>One panel member elaborated on that idea and then partnered with a group of researchers at the University of the Witwatersrand to test a version of it with an experiment funded mostly by the <a href="https://www.3ieimpact.org/">International Initiative for Impact Evaluation </a>(known as ‘3ie’).</p>
<p>Experiments of this kind <a href="https://theconversation.com/how-randomised-trials-became-big-in-development-economics-128398">have been claimed</a> by some influential economists to be the most credible form of evidence there is for policymaking, but that claim is vulnerable to <a href="https://theconversation.com/randomised-trials-in-economics-what-the-critics-have-to-say-128538">a range of criticisms</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/randomised-trials-in-economics-what-the-critics-have-to-say-128538">Randomised trials in economics: what the critics have to say</a>
</strong>
</em>
</p>
<hr>
<p>The basic purpose of the wage subsidy experiment was to estimate how responsive employment was to a subsidy. Whether such a policy is cost-effective depends on how many new jobs are created because of the money spent.</p>
<p>As far back as 2008, the then Finance Minister, Trevor Manuel, had <a href="http://www.pmg.org.za/briefing/20080529-national-treasury-minister%E2%80%99s-budget-speech">already endorsed</a> the idea of a youth wage subsidy based on the panel’s report. In 2011 the National Treasury produced a <a href="http://www.treasury.gov.za/documents/%20nationalbudget/2011/Confrontingyouthunemployment-Policyoptions.pdf">lengthy policy document</a> which also endorsed the basic idea. It projected that 178,000 new jobs would be created over three years at a cost of R5billion. </p>
<p>The problem with the Treasury’s work, and subsequent <a href="https://www.tandfonline.com/doi/full/10.1080/0376835X.2013.801197">academic modelling</a>, was that to make such forecasts it had to assume the answer to the fundamental question: how employment responds to a subsidy. In the face of opposition to the policy from trade unions in particular, government endorsed the idea of an experiment to test this assumption. </p>
<p>In the lead-up to the decision on the policy proposal by Parliament in 2013 the lead researcher behind the experiment <a href="http://www.mg.co.za/article/2013-11-01-00-give-youth-wage-subsidy-a-chance/">claimed</a> in the press that it had shown the subsidy would be a success:</p>
<blockquote>
<p>If a wage subsidy similar in size to the one tested is introduced … about 88,000 new jobs would be created a year. </p>
</blockquote>
<p>And the National Treasury referenced the positive results in the <a href="http://www.treasury.gov.za/documents/national%20budget/2013/review/FullReview.pdf">2013 Budget Review</a>.</p>
<h2>What the evidence really says</h2>
<p>A <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/dech.12676">close analysis of the experiment and its findings</a> shows that the study did not provide evidence that supported the wage subsidy. </p>
<p>Besides many other limitations, the experimental intervention was very different from the incentive and its main findings could just as easily have been the result of factors other than job creation. The nature of the relationship between the researchers and the Treasury, reflected in the researchers’ ‘policy influence plan’, suggested a shared desire to justify the policy proposal, rather than an objective effort to ascertain whether it would work.</p>
<p>And the study has never been published in any peer-reviewed outlet. All of which contradicts <a href="https://dirp4.pids.gov.ph/websitecms/CDN/EVENTS/ATTACHMENTS/3ie-jimenez.pdf">claims</a> that the intervention demonstrates the value of randomised policy experiments in developing countries.</p>
<p>The process to review the policy in 2016 was also deeply flawed. Again, studies that had been done in collaboration with the Treasury were cited as showing that the policy was a success. But, again, these were not published for scrutiny before Parliament took its decision. </p>
<h2>What should happen</h2>
<p>Since 1994 ANC governments have stated their ambition to <a href="https://www.hsrcpress.ac.za/books/constructing-a-democratic-developmental-state-in-south-africa">position South Africa as a ‘developmental state’</a>, including in the <a href="https://www.nationalplanningcommission.org.za/assets/Documents/NDP_Chapters/NDP%202030-CH13-Building%20a%20capable%20and%20developmental%20state.pdf">National Development Plan</a>. One of the critical characteristics of such states elsewhere is their ability to learn from mistakes, which includes a willingness to scrap failed or ineffective policies. </p>
<p>Such an approach should apply to the wage subsidy policy. Instead of reducing unemployment the policy appears to be serving as a costly subsidy to already-profitable firms for employees they would have hired anyway. If the real priority is addressing unemployment and the government is serious about being a successful developmental state, the policy should be ended and the resources directed elsewhere.</p>
<p><em>“The original article stated that the ETI age limit had been raised to 35 but this was a proposal that was not adopted. The age limit therefore remains at 29.</em></p><img src="https://counter.theconversation.com/content/168124/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Seán Mfundza Muller receives funding from a European Union-funded project, "Putting People back in Parliament", led by the Dullah Omar Institute (University of the Western Cape), in collaboration with the Parliamentary Monitoring Group, Public Service Accountability Monitor (Rhodes) and Heinrich Boell Foundation (South Africa). He also receives funding from the Council on Higher Education for research into the effects of recent higher education policy decisions. The views expressed are his own.</span></em></p>South Africa’s youth unemployment tax incentive is effectively a subsidy to the profits of companies.Seán Mfundza Muller, Senior Research Fellow, Johannesburg Institute for Advanced Study, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1674052021-09-20T14:20:29Z2021-09-20T14:20:29ZGlobal demand for cashews is booming. How Ghana can take advantage to create jobs<figure><img src="https://images.theconversation.com/files/419790/original/file-20210907-19-11zj5ct.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Key cashew producing countries in Africa are rolling out strategies to increase production and processing of raw cashew nuts.</span> <span class="attribution"><a class="source" href="https://www.pxfuel.com/en/search?q=salted+nuts">Wikimedia Commons</a></span></figcaption></figure><p>The <a href="https://unctad.org/news/cashing-cashews-africa-must-add-value-its-nuts">global cashew industry</a> has grown rapidly over the last decade, driven by increasing consumption of cashew nuts around the world. And the market for raw cashews is <a href="https://www.globenewswire.com/news-release/2021/01/12/2156832/28124/en/Outlook-on-the-Cashew-Kernel-Global-Market-Industry-Expected-to-Grow-at-a-CAGR-of-4-27-Between-2020-to-2025.html">forecast</a> to continue growing at an annual rate of 4.27% between 2020 and 2025. It is expected to reach almost US$7 billion by 2025.</p>
<p>The growing demand for cashew nuts around the world, particularly in developed and emerging economies, is driven by a number of factors. They include recognition of their <a href="https://www.cbi.eu/market-information/processed-fruit-vegetables-edible-nuts/cashew-nuts/market-potential">health and nutritional benefits</a> and the growth in plant based diets. Cashew nuts are also considered a substitute for <a href="https://www.cbi.eu/market-information/processed-fruit-vegetables-edible-nuts/cashew-nuts/market-potential">dairy products</a> and they represent a popular <a href="https://www.cbi.eu/market-information/processed-fruit-vegetables-edible-nuts/cashew-nuts/market-potential">savoury snack</a>. They are also a substitute for the ever popular <a href="https://www.cbi.eu/market-information/processed-fruit-vegetables-edible-nuts/cashew-nuts/market-potential">peanut butter</a>. </p>
<p><a href="https://unctad.org/system/files/official-document/ditccom2020d1_en.pdf#page=22">African countries</a> are at the forefront in responding to this growing demand. They have increased production.</p>
<p>Demonstrating this, the African continent now <a href="https://unctad.org/system/files/official-document/ditccom2020d1_en.pdf#page=23">accounts for over 50% of raw cashew nut</a>. <a href="https://unctad.org/system/files/official-document/ditccom2020d1_en.pdf">About 90%</a> of all Africa’s production is exported, mainly to Vietnam and India. These two countries account for 98% of the world’s raw cashew nut imports. Vietnam and India deshell and process cashews before re-exporting them to the US, Europe, the Middle East, China and Australia, where they are in turn roasted, salted and packaged prior to consumption.</p>
<p>The low rates of cashew nut processing in Africa’s cashew producing nations is driven by a number of factors. These include limited infrastructure and local processors. But a number of African governments have recently put in place policies and measures to address these shortfalls. There are still gaps though. Research is needed to understand better the structural challenges that constrain local processors.</p>
<p>Ghana is among Africa’s major producers of cashew nuts. Ghana currently produces around <a href="http://www.ijsaf.org/index.php/ijsaf/article/view/37">85,000 metric tonnes</a> of raw cashew nuts each year, which accounts for about one percent of the worlds’ total production. Of this, over 90% is exported to India and Vietnam by Asian exporters and processors.</p>
<p>Cashew production in Ghana dates back to the <a href="https://www.gardja.org/story-behind-cashew-production-ghana-2/">1960s</a>, with production for export markets expanding significantly in the last decade. </p>
<p>Our <a href="https://ijsaf.org/index.php/ijsaf/article/view/37">research</a> focused on the Brong Ahafo Region – now Bono East, Bono and the Ahafo regions. Here we sought to better understand dynamics and issues associated with Ghana’s growing cashew nut sector, including the particular challenges facing local processors.</p>
<h2>Local processors face many challenges</h2>
<p>Ghana has 14 cashew processing plants, with a total annual capacity of <a href="https://thebftonline.com/17/09/2020/govt-exploring-international-collaboration-to-boost-local-cashew-processing/">65,000</a> metric tonnes of raw cashews. While 10 of these plants are active, they process less than 10% of total annual cashew production. The remaining processing plants have either ceased operation, or have completely shut down.</p>
<p>There are a number of challenges that hinder local processing of cashew nuts in Ghana. Key amongst these is a lack of capital to maintain operations, alongside the inability of local processors to access raw cashew nuts from farmers - the latter of which is exacerbated by poor transport infrastructure. Although local processors are able to access loan and credit facilities from commercial banks, high interest rates leave this an unviable option, especially for small domestic operators.</p>
<p>Shortfalls in capital also limit the ability of local processors to purchase raw cashew nuts from farmers. Local processors also face intense competition from foreign processors and exporters – most notably from Asia – who drive up cashew nut prices. While Asian processors and exporters are able to afford high farmgate prices due to their access to preferential <a href="https://afsaap.org.au/wp-content/uploads/2020/03/vol40no1june2019_boafo-et-al_pp31-52.pdf">interest rates</a> in their home countries, local processors are unable to compete, leaving them simply unable to afford to purchase raw cashew nuts. </p>
<p>Cashew farmers also demonstrate a preference for selling their nuts to Asian processors and exporters who pay them immediately in cash. Local processors, in contrast, often purchase cashew nuts on credit.</p>
<p>These conditions leave Ghana off the field, thereby missing out on the significant opportunities for jobs and revenue generation via the booming global cashew industry. Recent estimates indicate this loss at about <a href="https://thebftonline.com/01/09/2021/economy-loses-us100m-revenues-annually-on-cashew-nuts-expert/">$100 million</a> each year. This loss is primarily tied to Ghana’s inability to process - and thereby add value to - its raw cashew nuts.</p>
<h2>The way forward: Ghana should learn from other countries</h2>
<p>Governments in key cashew producing countries across Africa are increasingly rolling out strategies to increase both the production and processing of raw cashew nuts. For example, in Cote d'Ivoire, the largest exporter of raw cashew nuts in the world, an <a href="https://www.cbi.eu/sites/default/files/vca-cashew-west-africa_0.pdf">export tax of FCFA 30 per kg</a> of raw cashew nuts has recently been introduced. Revenue from this tax is then used to subsidise and support local processors. This has incentivised local processing, making Côte d’Ivoire, Ghana’s neighbour, <a href="https://unctad.org/system/files/official-document/ditccom2020d1_en.pdf">the largest cashew processor in Africa</a>, with a capacity of 70,000 metric tonnes annually.</p>
<p>Similarly, Mozambique and Tanzania have <a href="https://www.intracen.org/uploadedFiles/intracenorg/Blogs/Cashew_Nuts_-_Main/Cashew%20quarterly%20bulletin%20Q2%20Final.pdf">adopted a range of measures</a> to protect and incentivise local cashew processors. These include granting local processors preferential access to raw cashew nuts. It also includes imposing export duties on raw cashew nuts. Meanwhile, since 2009 Kenya has introduced a <a href="https://www.intracen.org/uploadedFiles/intracenorg/Blogs/Cashew_Nuts_-_Main/Cashew%20quarterly%20bulletin%20Q2%20Final.pdf">ban on the export of raw cashew nuts</a>, a strategy which has increased local processing from <a href="https://www.intracen.org/uploadedFiles/intracenorg/Blogs/Cashew_Nuts_-_Main/Cashew%20quarterly%20bulletin%20Q2%20Final.pdf">30% in 2009 to 80%</a>in 2012.</p>
<p>The Ghana Export Promotion Authority is currently working with Cashew Industry Association of Ghana to increase local processing. This collaboration may benefit by drawing from the experiences of other African countries, including to guide a national cashew processing strategy. </p>
<p>Importantly, local processors must be protected against Asian competitors who come to Ghana to buy cashew nuts during cashew harvesting season. They also need tax incentives, affordable credit facilities and modern technology to thrive. </p>
<p>With appropriate support, Ghana may be able to take advantage of the growing demand and consumption of cashew nuts in the developed and emerging economies, with outcomes that will generate jobs and revenue.</p><img src="https://counter.theconversation.com/content/167405/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kristen Lyons is a senior research fellow with The Oakland Institute, and member of the Australian Greens. </span></em></p><p class="fine-print"><em><span>James Boafo does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ghana is losing out the booming global cashew industry in terms
of job and revenue generations.James Boafo, Lecturer in Geography and Sustainable Development, Kwame Nkrumah University of Science and Technology (KNUST)Kristen Lyons, Professor Environment and Development Sociology, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1670032021-09-07T14:55:37Z2021-09-07T14:55:37ZYoung people and women bear the brunt of South Africa’s worrying jobless rate<figure><img src="https://images.theconversation.com/files/418863/original/file-20210901-16-wk12bo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Women fill plastic shopping bags with light polyethelene plastics to make soccer balls from re-used plastics in Cape Town. Women bear the brunt of joblessness in South Africa.</span> <span class="attribution"><span class="source">EFE-EPA/Nic Bothma</span></span></figcaption></figure><p>South Africa’s unemployment figures have made for grim reading for a long time. The <a href="http://www.statssa.gov.za/publications/P0211/P02112ndQuarter2021.pdf">latest</a> for the second quarter of 2021 were, by several measures, gloomier than usual. The official unemployment rate for the second quarter <a href="https://www.news24.com/fin24/economy/one-in-3-south-africans-looking-for-jobs-and-it-could-get-even-worse-20210825">worsened to 34.4%</a>. This is the highest the rate has been since the survey was started in 2008.</p>
<p>Worse is still to come: analysts <a href="https://mg.co.za/business/2021-07-22-employment-bloodbath-on-the-cards/">have warned</a> that the effects of the July 2021 <a href="https://theconversation.com/what-lies-behind-social-unrest-in-south-africa-and-what-might-be-done-about-it-166130">violent unrest</a> that swept through two provinces that are the <a href="http://www.statssa.gov.za/publications/P0441/GDP%202020%20Q4%20(Media%20presentation).pdf#page=47">biggest contributors to economic output</a> are not yet reflected in employment figures.</p>
<p>We considered youth unemployment trends by using two sets of data – Statistics South Africa’s Quarterly Labour Force Survey and the long-running <a href="http://www.nids.uct.ac.za/">National Income Dynamics Survey</a>. As has long been the case, young people bear a disproportionate share of the unemployment burden. <a href="http://www.statssa.gov.za/?page_id=1856&PPN=P0211&SCH=72944">Nearly two-thirds</a>, or 64.4%, of people aged between 15 and 24 are unemployed. This is <a href="https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_737648.pdf">among the highest recorded in the world</a>.</p>
<p>We <a href="https://www.uj.ac.za/faculties/humanities/csda/Documents/Youth%20Unemployment%20report%20FINAL%20interactive.pdf">examined</a> why this is the case in a chapter, “South Africa’s high youth unemployment: structural features and current responses”, in the book <em>Youth in South Africa: Agency, (In)visibility and National Development</em>, edited by Ariane De Lannoy, Malose Langa and Heidi Brooks, due to be published in November.</p>
<p>Our analysis showed that youth unemployment is embedded in the long-standing structural dynamics of a labour market that has for several decades left far too many young people at the margins of the economy.</p>
<p>We developed a gap analysis, identifying what’s missing and what else needs to be done to address youth unemployment. The research found that most of the drivers of youth unemployment are addressed with current instruments. But the underlying causes of limited job growth, gender inequalities in employment and increasing discouragement among youth are not specifically addressed.</p>
<p>In addition, more needs to be done to ensure the coordination of policies to make the journey from learning to earning more seamless for a young person. </p>
<p>Finally, existing policy interventions can’t promote the levels of youth employment required in a context of low economic growth and low job growth.</p>
<h2>Unpacking the data</h2>
<p>Although the youth unemployment rate has been consistently high over the past two and a half decades, there was improvement between 2003 and 2007, a period when the country’s economic growth was high. <a href="https://www.uj.ac.za/faculties/humanities/csda/Documents/Youth%20Unemployment%20report%20FINAL%20interactive.pdf">Our analysis</a> reveals that this decrease in youth unemployment was explained largely by increases in the labour market’s capacity to absorb labour.</p>
<p>However, economic growth has been depressed since 2008 and the youth unemployment rate has steadily increased. From 2008 to 2020, the youth (15-34 years) unemployment rate – using the expanded definition – rose by 15 percentage points, from 38% to 53%. The <a href="http://www.statssa.gov.za/publications/P0211/P02112ndQuarter2021.pdf#page=17">expanded definition</a> includes both workers who are still actively searching for work and the discouraged workseekers. Comparatively, for those aged between 35 and 64 there was an increase of 10 percentage points, from 17% to 27%.</p>
<p>Racial and gender disparities in access to work are entrenched features of the South African labour market. African youth (15-34 years) have the worst unemployment rate compared to the other groups, at 57%. Young women (15-34 years) across the board experience a higher unemployment rate of 57%, while that of young men is 49%.</p>
<p>The statistics do reflect a positive relationship between economic growth and labour absorption among young people. This means that efforts to significantly reduce youth unemployment are made difficult by the <a href="https://www.afdb.org/en/countries/southern-africa/south-africa/south-africa-economic-outlook">sluggish economic growth rate</a>.</p>
<h2>Interventions</h2>
<p>Our analysis identified four key structural drivers of youth unemployment:</p>
<ul>
<li>low economic growth rates </li>
<li>skills mismatches </li>
<li>continued spatial inequalities </li>
<li>labour market inefficiencies. </li>
</ul>
<p>In response to these and other unemployment drivers, a number of Active Labour Market Programmes exist. These are macro-level interventions aimed at keeping people employed, ensuring that more people become employed, and <a href="https://openknowledge.worldbank.org/handle/10986/17053">improving the efficiency of the labour market</a>.</p>
<p>The first set of interventions are about protecting jobs – that is to limit the number of jobs lost during economic downturns or company difficulties. For instance, the department of employment and labour <a href="http://www.treasury.gov.za/documents/national%20budget/2019/ene/FullENE.pdf">sets aside a portion</a> of the Unemployment Insurance Fund annually for initiatives that support turnaround strategies for companies in distress. The funds are also used for reskilling employees to minimise job losses.</p>
<p>Perhaps the largest set of interventions are labour absorbing. These are programmes that create work opportunities funded through public expenditure, including the <a href="https://www.gov.za/about-government/government-programmes/expanded-public-works-programme">Expanded Public Works Programmes</a>, the <a href="https://www.gov.za/CommunityWorkProgramme">Community Work Programme</a> and the <a href="http://www.nyda.gov.za/Products-Services/National-Youth-Services-Programme">National Youth Service</a>. They are intended to absorb large numbers of unemployed people, and youth in particular, into work or service opportunities.</p>
<p>The third set of interventions give employers incentives to hire more workers. One example is the <a href="https://www.sars.gov.za/types-of-tax/pay-as-you-earn/employment-tax-incentive-eti/">Employment Tax Incentive</a>. It is a tax-based intervention which encourages employers to hire young people in return for a tax rebate on the pay-as-you-earn tax that the company is liable to pay for each employee.</p>
<p>The fourth type of intervention is labour market intermediation – interventions intended to achieve better connection between employers and employees. Such interventions include workseeker support offered through the department of employment and labour’s Public Employment Support programmes, and private employment agencies such as <a href="https://www.lulaway.co.za/">Lulaway</a>, <a href="https://www.giraffe.co.za/">Giraffe</a> and <a href="https://jobjack.co.za/">JobJack</a>. </p>
<p>Another example of intermediation efforts deals with spatial inequalities. In recent years, a transport subsidy has been tested to ascertain whether providing work seekers with a transport voucher would alleviate the transport costs barrier of work seeking. <a href="https://portal.cepr.org/discussion-paper/15926">Evidence shows</a> that the transport subsidy was ineffective in improving job placement chances.</p>
<p>Finally, a plethora of interventions occur on the supply-side of the labour market, seeking to address skills mismatches.</p>
<h2>Filling the gaps</h2>
<p>We developed our gap analysis by drawing on a <a href="https://www.uj.ac.za/faculties/humanities/csda/Documents/Youth%20Unemployment%20report%20FINAL%20interactive.pdf">synthesis of existing research on the drivers</a>, mapped against existing interventions. For every driver we considered whether an active labour market programme existed to address it. This allowed us to draw conclusions about gaps in the current offerings.</p>
<p>Our analysis reveals that for most of the drivers, programmes exist to address them. However, these are severely hampered by low job growth. </p>
<p>Further, we found that there is little coordination between interventions. This leaves many young people struggling to understand what their next step is in their labour market journeys. </p>
<p>Increasing discouragement rates also point to the need for better curated and coordinated support that is easily accessible to young people as they seek to navigate labour market opportunities.</p>
<p>The issue of gender is an oversight in current strategies. While many programmes have targets for reaching women, they don’t address some of the barriers that women face in entering and remaining connected to the labour market – such as the higher burden of care that women face (which has <a href="https://cramsurvey.org/wp-content/uploads/2020/07/Casale-Gender-the-early-effects-of-the-COVID-19-crisis-in-the-paid-unpaid-economies-in-South-Africa.pdf">increased since the COVID-19 pandemic began</a>). This suggests that even in a higher job growth labour market, women may still be left behind.</p>
<p>Finally, economic growth that promotes job growth is the key factor in shifting the youth unemployment challenge. Strategies to promote job-intensive economic growth must be at the forefront of policymakers’ minds. If such growth is achieved, the existing suite of programmes, with some additions to address discouragement and gender inequalities, should ensure that young people are well placed to take up jobs.</p><img src="https://counter.theconversation.com/content/167003/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lauren Graham receives funding from the National Institute for the Humanities and Social Sciences, the Capacity Building Programme for Employment Promotion, and the British Academy. </span></em></p><p class="fine-print"><em><span>Cecil Mlatsheni does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Racial and gender disparities in access to work are entrenched features of the South African labour market.Cecil Mlatsheni, Senior lecturer, School of Economics, University of Cape Town, University of Cape TownLauren Graham, Associate professor at the Centre for Social Development in Africa, University of Johannesburg, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1665792021-09-05T08:16:06Z2021-09-05T08:16:06ZHow the South African government can boost its credibility in the agricultural sector<figure><img src="https://images.theconversation.com/files/418864/original/file-20210901-24-1euivqd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Creating a set of classification and grading rules for each agricultural product has proved cumbersome and added to costs of production.</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>Governments can build credibility over time through consistent commitment to implementing policies efficiently and effectively. South Africa <a href="https://www.news24.com/fin24/Economy/South-Africa/mboweni-warns-that-without-big-reforms-its-game-over-for-sa-20200110">hasn’t done well</a> on this score. As a result of the poor record of policy implementation, investors and the general public have become <a href="https://www.blsa.org.za/implementation-is-key-to-economic-recovery-plan-blsa/">sceptical</a> of government policy pronouncements.</p>
<p>Recent examples of this credibility gap include its handling of two major policy initiatives. The first is the <a href="https://www.gov.za/sites/default/files/gcis_document/201409/ndp-2030-our-future-make-it-workr.pdf">National Development Plan</a> launched in 2012. The second is the National Treasury’s 2019 economic policy paper titled “<a href="http://www.treasury.gov.za/comm_media/press/2019/Towards%20an%20Economic%20Strategy%20for%20SA.pdf">Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa</a>”. Neither was ever fully implemented.</p>
<p>Once unveiled, it was up to government departments to pull ideas from them to enhance their strategies. But this wasn’t done. </p>
<p>The factors that lie behind poor policy implementation are varied and complex. They range from conflicting ideologies, a lack of capacity within the state and its institutions, corruption, and <a href="https://theconversation.com/small-towns-are-collapsing-across-south-africa-how-its-starting-to-affect-farming-162697">poor governance at local municipalities</a>.</p>
<p>But the government seems to be waking up to the fact that the key to success is public policy implementation. Take the <a href="https://www.gov.za/economy">Economic Reconstruction and Recovery Plan</a> launched in October 2020. The plan is focused on energy security, infrastructure development, green economy, food security, and the tourism sector, among others.</p>
<p>Unlike the slow policy implementation observed over the past decade, government has followed through with <a href="https://www.gov.za/speeches/mineral-resources-and-energy-amended-schedule-2-electricity-regulation-act-4-2006-13-aug">reforms</a> in the energy sector. It is worth highlighting that this is a sector that was already beset by <a href="https://businesstech.co.za/news/energy/467592/south-africas-power-crisis-is-going-to-get-worse-over-the-next-5-years-but-ramaphosa-says-there-is-a-plan-to-fix-it/">crisis</a>.</p>
<p>Elsewhere, the departments of Agriculture, Land Reform and Rural Development, and Trade, Industry and Competition have followed up with sectoral master plans. These include <a href="http://www.thedtic.gov.za/wp-content/uploads/Policy_Statement.pdf">building local industrial capacity</a>, for both domestic and export markets.</p>
<p>These are being drawn up with input drawn from a range of key stakeholders in each sector. This is a break from the past where government drew up plans and sought stakeholder input at the end.</p>
<p>The master plan for agriculture and agribusinesses, for example, has included government, farmer organisations, agribusiness, commodity organisations and labour representatives. This process too could suffer inertia if it only leans on grand ideas which are not implemented. </p>
<p>The department of agriculture and various social partners are nearing completion of the master plan for the sector. The document supports <a href="https://www.gov.za/speeches/president-cyril-ramaphosa-south-africa%E2%80%99s-economic-reconstruction-and-recovery-plan-15-oct">economic recovery plans set out by president Cyril Ramaphosa a year ago</a>. But what will make this particular plan different is the commitment to implementation and the costing of its activities.</p>
<p>Based on many years of <a href="http://www.thepresidency.gov.za/press-statements/president-appoints-economic-advisory-council">engaging with government</a> on <a href="https://www.agbiz.co.za/content/economic-research?page=economic-intelligence">the agricultural sector</a> policies needed to make it easy to do business in South Africa, I have distilled a few things that government can do to improve its policy credibility in the sector. I have also developed a list of what the private sector’s contribution can be.</p>
<h2>What government can do</h2>
<p>The first useful step government could take would be to implement all the regulatory interventions that require less capital. In the case of agriculture, these would include:</p>
<ul>
<li>the release of land already in government’s book to beneficiaries with tradable land right</li>
<li>improvement in efficiency in various regulations in the livestock industry, and animal hygiene which would assist in boosting exports, </li>
<li>improvements in the efficiency in registering new agro-chemicals that can help in making agriculture more efficient. </li>
</ul>
<p>It should also reprioritise the national budget in line with the master plan interventions. This will signal its commitment to ensuring its success.</p>
<p>Another important intervention would be for it to support state entities such as Transnet to improve the efficiency of the ports. This should go in tandem with intensifying efforts to open more export markets for South African agriculture. Then there is the <a href="https://landbank.co.za/About-Us/Pages/Our-Business.aspx">Land and Agricultural Development Bank</a>. Government should speed up the resolution of the bank’s <a href="https://landbank.co.za/Media-Centre/Press%20Releases/2021/Media%20Response%20Statement%20-%20Liability%20Solution%2031%20March%202021.pdf">financial challenges</a>. Resolving these would enable the bank to play an influential role in the rollout of the agricultural master plan.</p>
<p>The government should release land that it owns to new beneficiaries with long term tradable land rights or title deeds.</p>
<p>It also needs to root out corruption at various levels within the department to ensure the effectiveness and efficiency of staff.</p>
<p>Finally, the government needs to take action to cut red tape and reduce bureaucracy, and bring legislation up to date.</p>
<p>For example the <a href="https://www.gov.za/documents/fertilizers-farm-feeds-seeds-and-remedies-act-28-may-2015-1101">Fertilizers, Farm Feeds, Seeds and Remedies Act of 1947</a> which regulates the registration, importation and sale of fertilizers, farm feeds, seeds, and certain remedies dates back to 1947. Naturally, it doesn’t reflect the realities of the 21st century. Agro-chemicals suppliers and seed companies struggle to bring new technologies into the country because they aren’t covered in the law. Yet the technologies are key to <a href="https://www.project-syndicate.org/commentary/eu-review-policy-on-genetically-engineered-crops-africa-by-wandile-sihlobo-2-2021-05">boosting agricultural productivity</a>. </p>
<p>Then there is the <a href="https://www.gov.za/documents/agricultural-product-standards-act-6-mar-2015-1127">Agricultural Product Standards Act</a> which regulates the definition, classification and the grading of most agricultural produce. The problem doesn’t lie with the law itself but how government has chosen to implement it through a set of regulations for each product. These are onerous, and require auditing which adds to costs of production.</p>
<p>The department of agriculture <a href="https://wandilesihlobo.com/2021/05/18/south-africas-regulation-of-agricultural-product-standards-falls-short/">has assigned the enforcement</a> of the act to various entities whose services must be paid for by the private sector. This adds even more to operating costs which in turn are recovered through higher retail prices or lower profits for producers.</p>
<h2>What should the private sector do?</h2>
<p>The private sector has a role to play too. The first step should be to build trust among various farmer organisations and agribusiness to have a unanimous private sector voice that speaks to the government.</p>
<p>Private sector players also need to recognise the need for collaborative efforts in rebuilding South Africa and expanding the agriculture and agribusiness sector. One example of this is that they could develop partnerships with new entrant farmers in the development programmes of various commodity organisations.</p>
<p>The private sector also needs to participate in initiatives to help finance the new entrant farmers.</p>
<p>Lastly, it needs to showcase and expand partnership programmes that have proven a success in various commodities and parts of the country.</p>
<h2>Dealing with apartheid’s legacy</h2>
<p>South Africa’s history is unfortunately still mirrored, to an extent, by the farmer associations and commodity groups. There are some that largely represent black farmers, and some largely white farmers. This division contributes to different messages being carried to government. Ideally, farmer organisations and groups should, at least on broad issues, strive for a unanimous voice. But the key thing is building trust so that every participant can gain comfort knowing their views are represented.</p>
<p>Both lists are not exhaustive but the proposed interventions could move the needle in terms of translating the ideas on paper in various plans into tangible projects that could contribute to the growth and job creation in South Africa’s agriculture. Government’s priority should be on building credibility. This could be done by listening to business and social partners and effectively implementing the less financially costly programmes quickly. This will demonstrate the commitment and prove to be an encouragement to all role-players.</p><img src="https://counter.theconversation.com/content/166579/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Wandile Sihlobo is the Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz), and also a member of the South African President's Economic Advisory Council (PEAC).</span></em></p>To rebuild lost credibility, the South African government can start by listening to social partners and the business sector and implementing less financially costly policiesWandile Sihlobo, Visiting Research Fellow, Wits School of Governance, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1671652021-09-03T19:08:08Z2021-09-03T19:08:08ZPandemic hardship is about to get a lot worse for millions of out-of-work Americans<figure><img src="https://images.theconversation.com/files/419344/original/file-20210903-17-epc1ac.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5472%2C3645&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The door to unemployment benefits is closing for million of Americans.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakUnemployment/8467302427fd4c65b0facfa194f83a98/photo?Query=jobless%20AND%20U.S.&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=310&currentItemNo=38">AP Photo/John Minchillo</a></span></figcaption></figure><p>Millions of unemployed Americans lost pandemic-related jobless benefits as of Labor Day – just as surging cases of coronavirus <a href="https://www.bls.gov/news.release/empsit.nr0.htm">slow the pace of hiring</a>. </p>
<p>In all, an <a href="https://www.cnbc.com/2021/08/31/millions-of-americans-will-lose-unemployment-benefits-this-weekend.html">estimated 8.8 million people</a> stopped receiving unemployment insurance beginning on Sept. 6, 2021. Millions more will no longer get the extra US$300 a week the federal government has been providing to supplement state benefits. </p>
<p>But with the <a href="https://www.nytimes.com/interactive/2021/us/covid-cases.html">pandemic still raging</a> thanks to the rise of the delta variant, particularly in Southern states, the expiration of these benefits seems ill-timed. While some claim that the aid is no longer needed and doing more harm than good, <a href="https://sgpp.arizona.edu/people/jeff-kucik">we</a> <a href="https://clas.osu.edu/people/leonard.471">believe</a> that the data tell another story.</p>
<h2>Benefits lost</h2>
<p>Three federal programs created to support workers hurt by the COVID-19 pandemic and related lockdowns expired on Sept. 6:</p>
<ul>
<li><p>The Pandemic Extended Unemployment Compensation program offered 13 additional weeks in state unemployment benefits. An <a href="https://tcf.org/content/report/7-5-million-workers-face-devastating-unemployment-benefits-cliff-labor-day/">estimated 3.3 million</a> people who were getting benefits through this program lost them. </p></li>
<li><p>Pandemic Unemployment Assistance provided aid to gig workers and others not normally eligible for unemployment benefits. About <a href="https://www.dol.gov/ui/data.pdf">5.5 million people were receiving aid</a> because of this program – <a href="https://www.peoplespolicyproject.org/wp-content/uploads/2021/09/data.pdf">including those who just joined the rolls</a> in the second half of August.</p></li>
<li><p>The <a href="https://www.dol.gov/coronavirus/unemployment-insurance">Federal Pandemic Unemployment Compensation</a> program supplemented state benefits with an additional $300 in aid per week – down from $600 when it began in April 2020.</p></li>
</ul>
<p>All told, the end of these programs <a href="https://www.peoplespolicyproject.org/2021/09/02/35-million-people-will-lose-unemployment-income-on-sept-6/">may affect 35 million people</a> when you include families of the unemployed.</p>
<h2>Dropping aid didn’t boost jobs growth</h2>
<p><a href="https://www.wsj.com/articles/paying-americans-not-to-work-11587597150">Critics of these federal supplemental benefits claim</a> they reward Americans for not working by offering more in aid than they’d get from a job. This is why many Republican governors <a href="https://www.cnn.com/2021/05/11/politics/unemployment-benefits-gop-states/index.html">opted to drop out</a> of one or more of the federal programs in recent months. </p>
<p>“We see ‘Help Wanted’ signs everywhere,” <a href="https://gov.idaho.gov/pressrelease/its-time-to-get-back-to-work-gov-little-ends-idahos-participation-in-all-federal-pandemic-unemployment-compensation-programs/">Idaho Republican Gov. Brad Little said</a> on May 11, 2021. “We do not want people on unemployment. We want people working.”</p>
<p>But the data we have so far simply doesn’t back up these claims. </p>
<p>We compared employment growth in the 25 states that decided to drop the federal $300 supplement with those that kept it. Total employment in states that kept the federal supplement grew by 0.77% in July, compared with 0.54% for the states that gave it up, according to an analysis of <a href="https://www.bls.gov/news.release/laus.t03.htm">Bureau of Labor Statistics</a>, suggesting the benefits aren’t keeping workers on the sidelines. </p>
<p>The same pattern holds for sectors of the economy hit hardest by COVID-19. Leisure and hospitality jobs, such as waitstaff and cooks, accounted for <a href="https://www.bls.gov/news.release/empsit.t14.htm">roughly 1 in 4</a> of all jobs lost in 2020. Hiring rose 2.3% in those industries in states that kept the federal benefit, compared with 1.55% for other states. </p>
<p>This is consistent with a <a href="https://news.yale.edu/2020/07/27/yale-study-finds-expanded-jobless-benefits-did-not-reduce-employment">growing</a> <a href="https://www.cnbc.com/2021/08/23/ending-unemployment-benefits-had-little-impact-on-jobs-study-says.html">number</a> of <a href="https://www.cnbc.com/2021/07/22/cuts-to-unemployment-benefits-didnt-get-people-back-to-work-study-finds.html">studies</a> that show no correlation between the higher unemployment payments during the pandemic and lagging job growth.</p>
<p>We won’t know whether the trend continued until the state-by-state employment breakdown is released in mid-September. But for now, the evidence doesn’t support the claim that benefits keep folks at home.</p>
<h2>Jobless Americans still need support</h2>
<p>We do know that people who want to work are still being prevented from doing so because of COVID-19.</p>
<p>The <a href="https://www.bls.gov/news.release/empsit.nr0.htm">latest jobs report</a>, released on Sept. 3, 2021, showed that 5.6 million people were unable to work in August because their employer closed or lost business because of the pandemic, up from 5.2 million in July. </p>
<p>That may help explain why companies hired only 235,000 in August – <a href="https://www.bloomberg.com/news/articles/2021-09-03/u-s-jobs-post-slowest-gain-in-seven-months-amid-delta-spread?srnd=premium&sref=Hjm5biAW">a third of what economists had expected</a>. And there were no gains in leisure and hospitality, which <a href="https://www.bls.gov/web/empsit/ceseeb3a.htm">pay some of the lowest wages of any industry</a>. </p>
<p>As recently as late May, before the <a href="https://www.science.org/news/2021/08/what-does-delta-variant-have-store-us-we-asked-coronavirus-experts">delta variant began causing caseloads to climb</a>, pandemic-related unemployment claims were falling across all 50 states. Then, over June and July, <a href="https://oui.doleta.gov/unemploy/docs/weekly_pandemic_claims.xlsx">claims spiked</a> again as COVID-19 cases rippled across the country. </p>
<p><a href="https://oui.doleta.gov/unemploy/content/chariu2021/2021Jun.html">Nearly a third</a> of those currently unemployed come from three sectors of the economy: <a href="https://www.bls.gov/oes/current/oes_stru.htm#00-0000">health care and social assistance</a>; accommodation and food services; and <a href="https://www.bls.gov/oes/current/naics2_44-45.htm">retail trade</a>. According to industry wage data, none of these sectors provides a median wage that meets the <a href="https://www.unitedforalice.org/national-overview">minimum survival budget</a>s of American households.</p>
<p>All this shows why these three federal programs are still so important. </p>
<p>The extended benefits give unemployed people more time to find a job while helping them cover basic expenses. Gig workers, like Uber drivers and other independent contractors, need unemployment benefits too, especially as <a href="https://www.prnewswire.com/news-releases/new-report-shows-us-gig-workers-hit-hard-by-covid-19-with-nearly-3-out-of-5-now-earning-less-than-1-000-per-month-301157657.html">60% of them lost income during the pandemic</a> and many continue to struggle as business activity remains subdued. These workers are also <a href="https://hbr.org/2020/07/gig-workers-are-here-to-stay-its-time-to-give-them-benefits">less likely</a> to receive employer-sponsored benefits like health care. </p>
<p>And the $300 federal supplement is important because pre-pandemic state benefits – which are typically about <a href="https://www.cnbc.com/2020/07/23/average-unemployment-insurance-payment-in-each-us-state.html">$340 a week</a> – <a href="https://www.nber.org/digest/jul20/unemployment-benefit-replacement-rates-during-pandemic">replaced only 30% to 50% of lost earnings</a>. Even with the supplement, for most people, it’s still less than what they were earning from their job.</p>
<h2>Tough choices ahead</h2>
<p>That’s why the expiring benefits mean so much to lower-income families, especially now that the <a href="https://theconversation.com/cdc-eviction-ban-ended-by-supreme-court-4-questions-about-its-impact-answered-by-a-housing-law-expert-166926">Supreme Court has struck down</a> the Centers for Disease Control and Prevention’s ban on evictions. </p>
<p>For many, losing the benefit could <a href="https://www.cbpp.org/research/poverty-and-inequality/new-data-millions-struggling-to-eat-and-pay-rent">be the difference between choosing</a> to pay for food or rent, or forgoing a doctor’s visit because of the <a href="https://www.cnbc.com/2020/03/11/nearly-1-in-4-americans-are-skipping-medical-care-because-of-the-cost.html">high costs</a> of health care.</p>
<p>But after the benefits expire on Labor Day, making ends meet and staying in their homes will be significantly harder for millions of American families.</p>
<p>[<em>Over 110,000 readers rely on The Conversation’s newsletter to understand the world.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=100Ksignup">Sign up today</a>.]</p>
<p><em>Article updated to provide more detail about author analysis of BLS data and add background on composition of the unemployed.</em></p><img src="https://counter.theconversation.com/content/167165/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Three pandemic-related unemployment benefit programs expire on Labor Day, putting millions of mostly low-income families in financial jeopardy.Jeffrey Kucik, Associate Professor of Political Science, University of ArizonaDon Leonard, Assistant Professor of Practice in City and Regional Planning, The Ohio State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1552372021-04-28T15:00:42Z2021-04-28T15:00:42ZWill the pandemic really shape the future workplace?<figure><img src="https://images.theconversation.com/files/396058/original/file-20210420-19-uw024x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Some workers prefer a hybrid approach, whereby they can alternate between working at home and in the office</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>The workplace and modes of working have come into the spotlight amid COVID-19 lockdowns that have enforced remote working as the new norm for most businesses. Companies have had to review their practices to accommodate <a href="https://www.iol.co.za/business-report/companies/five-key-working-trends-for-2021-956411fb-64c3-42f6-99fd-17b1b595bc1d">a hybrid-approach</a> which allows employees to spend some time in the office to create social work experiences.</p>
<p><a href="https://theconversation.com/how-the-pandemic-will-shape-the-workplace-trends-of-2021-152277">Research</a> suggests that the pandemic could also shape other future workplace trends. Two trends stand out: the rise in telework and virtual collaboration on the one hand and the increasing divide between formal and informal work on the other.</p>
<p>The COVID-19 pandemic has reminded us about the great divide between ‘them’ and ‘us’, inequalities, and exploitation in informal workplaces. The dire reality of <a href="https://doi.org/10.31234/osf.io/gkwme">unemployment</a> is a major challenge. Joblessness is exacerbated by the use of the informal sector as a <a href="https://www.wits.ac.za/media/wits-university/faculties-and-schools/commerce-law-and-management/research-entities/scis/documents/SCIS%20Working%20Paper%204.pdf">shock absorber</a>.</p>
<p>The contractual labour market has shown a steady growth over the past decade. This <a href="https://ccs.ukzn.ac.za/files/Outsourcing%20in%20South%20African%20Universities.pdf">casualisation</a> of work can have positive and negative consequences. In South Africa, which has a long tradition of work casualisation, the effect has not always been positive as some workers have been <a href="https://www.researchgate.net/publication/318277114_CASUALIZATION_OF_WORK_IN_CONSTRUCTION_AND_THE_PLIGHT_OF_WORKERS_IN_BLOEMFONTEIN">victimised and exploited</a>. They have also not been provided with basic provisions, including personal protective equipment, to enable them to do their jobs. On the other hand, trends like the rise of the gig economy, flexible labour and self-employment form a significant part of the developing economy and the potential for job creation.</p>
<p>Faced with the pandemic and the key role of work in our lives it is important to consider the impact on work and workplaces. In particular, we should consider two questions: Who works and how or where are they working? These questions are particularly pertinent in countries like South Africa which have very high rates of job losses. These countries have also seen the expansion of remote work in the formal sector, opening up opportunities for more work casualisation.</p>
<h2>Informal versus formal</h2>
<p>The idea of who works centres on types of workers and their identity. The pandemic has highlighted the divide between types of workers, for example those in the informal versus formal sectors. It has further created new types of divides between ‘us’ and ‘them’, including ‘essential’ versus ‘non-essential’ and frontline versus remote workers. Workers in the formal sectors, for example, had more support from their organisations during the lockdown. Employers helped facilitate arrangements for working from home. Informal sector workers had no such support.</p>
<p>Most workers in developing countries, including South Africa, aren’t part of the formal employment labour force. They work in the informal sectors, and are often referred to as casual labour in <a href="https://www.jstor.org/stable/27667343?seq=1">precarious jobs</a>.</p>
<p>There are currently about 2.5 million casual or informal workers in South Africa. This working arrangement holds benefits, but also a potential dark side. The <a href="https://www.businessinsider.co.za/uber-eats-strike-and-pickets-at-fast-food-outlets-2021-1">strike by Uber Eats</a> drivers was a case in point. The Competition Commission found that these drivers were earning below the minimum wage. This trend of working in the <a href="https://www.investec.com/en_za/focus/economy/rocking-the-gig-economy.html">gig economy</a>, is also often not a choice but a necessity for workers. </p>
<p>But precariousness also offers greater flexibility and mobility for the higher skilled with greater negotiation power. In South Africa, <a href="https://www.investec.com/en_za/focus/economy/rocking-the-gig-economy.html">the gig economy has grown</a> as more people turn toward greater flexible work arrangements. They feel empowered and the demand for flexible working arrangements is growing. The lockdown has demonstrated to organisations that remote work which is enabled by technology is not only possible, but also efficient. More companies are creating opportunities for working remotely. </p>
<p>The spike in casualisation could also potentially help flip the paradigm and stimulate a new direction on how to ensure meaningful work for all. If leaders and people practitioners can evolve the best people practices deployed in the formal sector, to also serve the informal economy, it may open new avenues in stimulating economic and life empowerment. </p>
<p>This calls for applying standards on human dignity in work, as articulated by the <a href="https://www.ilo.org/global/standards/lang--en/index.htm">International labour organisation</a> and country labour laws, to how all people in the work cycle is treated. </p>
<p>This could be done by large employers holding their service providers accountable to ensure workers have the minimum standards in wages and benefits in place, and are treated with dignity and respect.</p>
<p>A large proportion of organisations deploy service providers or casual labour, to deliver parts of their business processes.</p>
<p>Organisational leaders should thus consider all workers in their operational value chain, formal and informal, through a humanitarian lens. This does not imply full time employment for all but rather, a level of accountability and dignity. </p>
<p>In so doing, contracting, and outsourcing along the value chain could include principal stipulations on minimal accepted people practices. Work in general serves a greater purpose than just earning an income, but can also provide <a href="https://repository.up.ac.za/bitstream/handle/2263/60501/Breytenbach_Relationship_2017.pdf?sequence=1">meaning</a> and purpose, <a href="https://journals-sagepub-com.ez.sun.ac.za/doi/full/10.1177/0890117118776735a">social connection</a>, status and structure. Business leaders therefore can contribute toward <a href="https://www.up.ac.za/media/shared/213/Articles%20on%20RL/Batch%203/mirvis-et-al-responsible-leadership-emerging-final.zp143780.pdf">responsible leadership</a> across the value chain in the full ecosystem of work. </p>
<p>Furthermore, beyond corporate social initiatives, business should have a sustainability and empowerment strategy that supports success of individuals beyond their own business success. The <a href="https://www.weforum.org/agenda/2020/11/whats-the-biggest-opportunity-for-change-after-the-pandemic/">World Economic Forum</a> recommends a ‘break out of the boardroom’ to see those outside formal business structures.</p>
<p>What matters is engaged and effective people who can thrive under responsible leadership in a supportive culture. Location then, as influenced by understanding the disruption, should facilitate collaboration and engagement, and match expected outputs with workers and their location.</p><img src="https://counter.theconversation.com/content/155237/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Natasha Winkler-Titus is affiliated with the Society of Industrial and Organisational Psychology South Africa. </span></em></p>If the best people management practices of the formal economy were to be deployed in the informal economy, new avenues of stimulating economic and life empowerment may be opened.Natasha Winkler-Titus, Senior Lecturer in Leadership and Organisational Behaviour at the Business School, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1567392021-03-28T13:39:11Z2021-03-28T13:39:11ZClimate action, job creation are top post-pandemic priorities for Canadians<figure><img src="https://images.theconversation.com/files/391452/original/file-20210324-19-607qmc.jpg?ixlib=rb-1.1.0&rect=700%2C1113%2C4401%2C2919&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A person sits on a tripod platform high above the street as protesters occupy an intersection during a demonstration to call for government action to on climate change in Vancouver in February 2021. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span></figcaption></figure><p>Since March 2020, the federal government in Canada has provided large-scale pandemic relief and economic stimulus, while the Bank of Canada has kept interest rates near zero <a href="https://www.bnnbloomberg.ca/bank-of-canada-already-pushing-limits-of-domestic-bond-market-1.1513097">and made large purchases of government bonds.</a></p>
<p>These extraordinary measures <a href="https://financialpost.com/opinion/jack-m-mintz-debt-dangers">have their critics</a>, but few would dispute the fact that they have helped keep the economy afloat and protect Canadians’ incomes.</p>
<p>Now what? Should we turn our attention to our newly acquired debt and focus on restoring business confidence, or do we “build back better” by investing in a social equity and climate change agenda?</p>
<p>As competing voices urge different priorities, we asked a random sample of Canadians two questions: What should Canada’s broader economic priorities be going forward? And what should the next federal budget focus on? </p>
<p>In January 2021, we conducted a national survey of 563 respondents across all 10 provinces. The survey had a margin of error of between plus and minus 4.13 per cent, 19 times out of 20. <a href="https://www.schoolofpublicpolicy.sk.ca/research/publications/policy-brief/the-post-pandemic-economy.php">Initial findings from the survey are further explored in a policy brief</a> issued by the Johnson Shoyama Graduate School of Public Policy at the University of Saskatchewan.</p>
<h2>Creating jobs a top priority</h2>
<p>Creating jobs and controlling inflation have been traditional goals of economic policy, and we expected our respondents to recognize them as legitimate policy priorities. But what about the debt? To gauge our respondents’ sense of the relative importance of different goals, we asked them to rank the five economic policy priorities from the most to the least important. </p>
<figure class="align-center ">
<img alt="A graph shows the importance respondents placed on certain economic priorities." src="https://images.theconversation.com/files/389218/original/file-20210312-18-pk29oj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/389218/original/file-20210312-18-pk29oj.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=298&fit=crop&dpr=1 600w, https://images.theconversation.com/files/389218/original/file-20210312-18-pk29oj.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=298&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/389218/original/file-20210312-18-pk29oj.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=298&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/389218/original/file-20210312-18-pk29oj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=375&fit=crop&dpr=1 754w, https://images.theconversation.com/files/389218/original/file-20210312-18-pk29oj.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=375&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/389218/original/file-20210312-18-pk29oj.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=375&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The relative importance of economic priorities, according to respondents.</span>
<span class="attribution"><span class="source">(Authors' calculations)</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>About 50 per cent of our respondents think that “creating jobs” should be either the first or second economic priority as we emerge from the pandemic. Fewer, but more than 40 per cent, think that controlling inflation (“controlling increases in the cost of goods and service”) should be the first or second priority. Very few, less than 10 per cent, see creating jobs and keeping inflation under control as the “least important” priorities. </p>
<p>Our respondents are sensitive to income issues. While 20 per cent think that “protecting the income of citizens” should be the most important priority going forward, an even larger proportion endorsed “reducing income inequalities.” Almost 30 per cent of respondents, in fact, ranked closing income gaps as the most important policy priority. </p>
<figure class="align-center ">
<img alt="People carry bags of donations to a homeless encampment." src="https://images.theconversation.com/files/391427/original/file-20210324-17-1rpha0s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/391427/original/file-20210324-17-1rpha0s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/391427/original/file-20210324-17-1rpha0s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/391427/original/file-20210324-17-1rpha0s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/391427/original/file-20210324-17-1rpha0s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/391427/original/file-20210324-17-1rpha0s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/391427/original/file-20210324-17-1rpha0s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Residents of Lions Bay bring bags and backpacks filled with donations of essential items to a homeless encampment at Strathcona Park in Vancouver in December 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
</figcaption>
</figure>
<p>These preferences signal a willingness to support active measures to shape income distribution. And if that means taking on more public debt, so be it. The traditional public finance goal of “reducing the level of government debt” received support from less than 15 per cent of respondents — and almost 50 per cent chose it as the least important of the five proposed priorities.</p>
<p>In short, reducing income inequality and creating jobs were ranked the top two most important economic policy priorities, regardless of age, gender, region of residence or household income. The only exception to this homogeneous response involves the importance of “creating jobs.” Seniors aged 65 and up, men, and residents in Atlantic Canada all ranked “creating jobs” as a more important policy priority than “reducing income inequalities.”</p>
<h2>Budget priorities</h2>
<p>Economic priorities are quite general, but budget priorities reveal the specific investment preferences of governments. To gauge how ordinary Canadians might approach budget priorities, we provided our respondents with a number of possible priority areas and asked them to identify the three areas they deemed most deserving of support — and the three areas least deserving.</p>
<figure class="align-center ">
<img alt="A graph shows the percentage of respondents who chose each area as most deserving of support" src="https://images.theconversation.com/files/389219/original/file-20210312-19-ov45zc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/389219/original/file-20210312-19-ov45zc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=307&fit=crop&dpr=1 600w, https://images.theconversation.com/files/389219/original/file-20210312-19-ov45zc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=307&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/389219/original/file-20210312-19-ov45zc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=307&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/389219/original/file-20210312-19-ov45zc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=385&fit=crop&dpr=1 754w, https://images.theconversation.com/files/389219/original/file-20210312-19-ov45zc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=385&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/389219/original/file-20210312-19-ov45zc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=385&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Percentage of respondents who chose each area as most deserving of support.</span>
<span class="attribution"><span class="source">(Authors' calculations)</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>It comes as no surprise to learn that Canadians believe public health initiatives deserve high priority. But perhaps the clearest message for our post-pandemic future is to be found in the second most important priority: Climate change and the green economy. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Chrystia Freeland gestures while speaking in the House of Commons" src="https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=434&fit=crop&dpr=1 600w, https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=434&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=434&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=546&fit=crop&dpr=1 754w, https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=546&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/391425/original/file-20210324-17-p0ewb3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=546&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Minister of Finance Chrystia Freeland delivers the 2020 fiscal update in the House of Commons on Parliament Hill in Ottawa in November 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
</figcaption>
</figure>
<p>This preference is shared by respondents across an array of different demographic and regional groups. Given signals contained in the federal government’s 2020 <a href="https://www.budget.gc.ca/fes-eea/2020/report-rapport/toc-tdm-en.html">Fall Economic Statement</a>, climate action may be one area where public priorities and political messaging are converging.</p>
<p>With their endorsement of strong Canadian supply chains and technology and innovation, the graph above also suggests respondents recognize the importance of a positive environment for business investment, <a href="https://www.cdhowe.org/council-reports/stimulus-spending-if-necessary-not-necessarily-stimulus-spending-cd-howe-institute-fiscal-and-tax">the principal concern of Canada’s business-oriented think tanks</a>.</p>
<p>More worrying, from a long-term investment perspective, is the relatively low priority accorded to education, whether job training, post-secondary or early childhood. The next graph shows that more than 20 per cent of our respondents list early childhood education among the least important priority areas. </p>
<p>And speaking of the lowest-ranked priorities — those deserving the least support — oil and gas pipelines lead the way by a wide margin. Respondents living in central Canada (Ontario and Québec) are slightly more inclined to label pipelines “least deserving,” but the regional differences are not large. If this choice is the flip side of the green economy preference, the message is quite clear: Canadians are looking toward a post-fossil fuel economy.</p>
<p>Some budget priorities are more ambiguous. “A universal basic income” is a good example of a policy preference embraced by a large segment of our respondents and rejected by an almost equally large segment. It will not be easy to find a middle ground.</p>
<figure class="align-center ">
<img alt="A graph shows the percentage of respondents choosing each area as least deserving of support" src="https://images.theconversation.com/files/389220/original/file-20210312-24-g445x3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/389220/original/file-20210312-24-g445x3.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=284&fit=crop&dpr=1 600w, https://images.theconversation.com/files/389220/original/file-20210312-24-g445x3.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=284&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/389220/original/file-20210312-24-g445x3.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=284&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/389220/original/file-20210312-24-g445x3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=357&fit=crop&dpr=1 754w, https://images.theconversation.com/files/389220/original/file-20210312-24-g445x3.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=357&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/389220/original/file-20210312-24-g445x3.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=357&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Percentage of respondents choosing each area as least deserving of support.</span>
<span class="attribution"><span class="source">(Authors' calculations) </span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Priorities could shift</h2>
<p>The results of our survey represent a snapshot in time. We have probed priorities, but priorities change. </p>
<p>As Canada emerges from the pandemic, creating jobs and achieving full employment are top priorities. Relegated to the back burner are traditional concerns for balanced budgets and declining debt levels. </p>
<p>Expect priorities to shift if inflation increases and interest payments on the debt begin to threaten the programs Canadians take for granted. Support for a green economy and reducing income inequalities are likely to be more durable preferences. The same goes for antipathy towards oil and gas pipelines. </p>
<p>But opinions are not uniform and governments will face pockets of resistance on almost all their initiatives.</p><img src="https://counter.theconversation.com/content/156739/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael M. Atkinson receives funding from the Social Sciences and Humanities Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Haizhen Mou receives funding from Social Sciences and Humanities Research Council of Canada (SSHRC). </span></em></p>As Canada emerges from the pandemic, creating jobs and achieving full employment are top priorities. Relegated to the back burner are balanced budgets and reducing debt.Michael M. Atkinson, Public Policy Professor Emeritus, University of SaskatchewanHaizhen Mou, Professor, Johnson Shoyama Graduate School of Public Policy, University of SaskatchewanLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1471902020-10-02T22:30:06Z2020-10-02T22:30:06ZWith over 300,000 young people left in limbo by COVID, we need a job cadet program<figure><img src="https://images.theconversation.com/files/361254/original/file-20201002-24-7bqe0z.jpg?ixlib=rb-1.1.0&rect=264%2C0%2C3161%2C2160&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/late-nightearly-morning-office-male-female-1114392698">Shutterstock</a></span></figcaption></figure><p>Australia should create a national job cadet program to help young people into work, according to a report released today by the Mitchell Institute.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Cover of Mitchell Institute report" src="https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=854&fit=crop&dpr=1 600w, https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=854&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=854&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1074&fit=crop&dpr=1 754w, https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1074&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/361284/original/file-20201002-15-1uocrw3.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1074&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Mitchell Institute report released today.</span>
<span class="attribution"><a class="source" href="https://www.vu.edu.au/sites/default/files/mitchell-institute-report-national-job-cadet-program.pdf">Mitchell Institute, Victoria University</a></span>
</figcaption>
</figure>
<p>In <a href="https://www.vu.edu.au/sites/default/files/mitchell-institute-report-national-job-cadet-program.pdf">the report</a>, Averting an Escalating Labour Market Crisis for Young People in Australia: A Proposed National Job Cadet Program, we highlight the extraordinary labour market challenges young people face.</p>
<p>Our analysis suggests the worst is yet to come, as young people compete for fewer available jobs in the transition from education to the workplace.</p>
<p>To help avert the crisis, we argue Australia should support employers to hire young people as cadets. The <a href="https://oecdedutoday.com/school-work-during-coronavirus-2008-global-financial-crisis/">evidence shows</a> programs such as these are effective in helping young people into viable careers, including at times of crisis.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/5-charts-on-how-covid-19-is-hitting-australias-young-adults-hard-147254">5 charts on how COVID-19 is hitting Australia's young adults hard</a>
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<hr>
<h2>What are cadetships?</h2>
<p>A cadetship combines formal training with practical work experience that includes some form of paid employment.</p>
<p>Like apprenticeships and traineeships, a cadetship program would mean young people train, study and earn an income. However, our proposed cadetships are aimed at jobs more often associated with diploma or bachelor degree qualifications. These cadetships will focus on areas of study – such as business, information technology and engineering – that are different to traditional trades.</p>
<p>This is similar to the <a href="https://www.bmbf.de/en/the-german-vocational-training-system-2129.html">German model of dual training</a>, which combines theory and training embedded in a real-life work environments. </p>
<p>Cadetships can take many forms. We describe two main streams in the table below.</p>
<p><iframe id="5ebrs" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/5ebrs/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>The first stream more closely resembles a traditional apprenticeship or traineeship, and draws on the relevant training provisions in industrial awards. This stream is for more unskilled and non-tertiary-qualified young people.</p>
<p>The second stream is for recent graduates, or those who already have some work experience, but who may need some further supported training to enter the labour market.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/advanced-apprenticeships-will-boost-skills-for-future-jobs-but-not-in-time-to-counter-covid-impacts-147113">Advanced apprenticeships will boost skills for future jobs, but not in time to counter COVID impacts</a>
</strong>
</em>
</p>
<hr>
<h2>Why do we need a cadetship program?</h2>
<p>Our research shows the <a href="https://www.pc.gov.au/research/supporting/jobs-ladder">already difficult labour market conditions</a> for young people are likely to get much worse.</p>
<p>Of particular concern is that fewer opportunities to enter the workforce will mean many young people will end up in the category known as “<a href="https://data.oecd.org/youthinac/youth-not-in-employment-education-or-training-neet.htm">NEET</a>” – “not in employment education or training”. It is the red flag of <a href="https://www.ncver.edu.au/research-and-statistics/publications/all-publications/who-are-the-persistently-neet-young-people#:%7E:text=While%20it%20is%20commonly%20accepted,months%20of%20NEET%20continuously%20and">education-to-work transitions</a> because it is associated with poor long-term outcomes.</p>
<p>These outcomes include higher rates of unemployment and underemployment, and lifetimes of insecure work and low pay.</p>
<p>The figure below shows the number of people between the ages of 15 to 24 who are in the NEET category in Australia. </p>
<p><iframe id="slcqC" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/slcqC/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>During the pandemic, about 100,000 more young people became NEET than would normally be the case. The most recent data show a reduction in their number, although it clearly remains higher than before. It is important to place these changes within a wider context.</p>
<p>Australia is experiencing the early economic impact of the coronavirus pandemic. <a href="https://onlinelibrary.wiley.com/doi/10.1111/1467-8462.12386">Based on previous recessions</a>, the most negative effects on young people will come progressively as cohorts graduating from education make the transition to the workforce. With lower rates of job creation it becomes harder for them to find work. </p>
<p>Indeed, data show the negative impacts of youth unemployment can linger long after an economic downturn has passed.</p>
<p>The chart below shows the historical incidence for 15-to-24-year-olds who are NEET since 1986, using a three-month rolling average.</p>
<p><iframe id="iNfi7" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/iNfi7/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>These trends suggest Australia may need to tackle the problem of a “bottleneck” forming in the youth labour market. This is when waves of young people try to move from the education system into the labour force. </p>
<p>However, when fewer jobs are available, young people are unable to find employment and a “queue” forms. The result is higher incidences of NEET that can take some time to dissipate.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/pupil-job-prospects-and-earnings-boosted-by-employer-links-to-schools-27548">Pupil job prospects and earnings boosted by employer links to schools </a>
</strong>
</em>
</p>
<hr>
<h2>How much will it cost?</h2>
<p>The challenge facing Australia is to create a greater quantity and quality of employment opportunities for young people.</p>
<p>Investing in cadetships for young people will help meet this difficult challenge.</p>
<p>To support businesses to hire cadets, we argue the Australian government should subsidise their wages. Wage subsidies <a href="https://businesslaw.curtin.edu.au/wp-content/uploads/sites/5/2017/05/ajle-vol-19-no-3-borland.pdf">have been shown to be effective</a> in creating extra employment.</p>
<p>We believe subsidies up to A$28,000 will help create the extra high-quality employment opportunities young people need. This matches the <a href="https://www.employment.gov.au/supporting-apprentices-and-trainees">current support provided</a> to certain employers of apprentices and trainees. The final amount an employer receives can be adjusted according to criteria such as the size of the business or amount of skills development required to do the job. </p>
<p>While cadetships will cost money, the cost of doing nothing is enormous. The <a href="https://www.oecd-ilibrary.org/social-issues-migration-health/society-at-a-glance-2016/neet-costs-are-significant-in-many-oecd-countries_soc_glance-2016-graph8-en">OECD estimates</a> the cost to the Australian economy of young people not being in education, training or employment is about 1% of GDP, or about A$40,000 per person per year.</p>
<p>Ultimately, the investment we make now in a job cadet program will deliver long-term rewards.</p><img src="https://counter.theconversation.com/content/147190/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Dawkins has received research grants. </span></em></p><p class="fine-print"><em><span>David G. Lloyd and Peter Hurley do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The pandemic has hit young people very hard. The long-term costs of having them neither studying nor working more than justify investment in a national program to help them enter the workforce.Peter Hurley, Policy Fellow, Mitchell Institute, Victoria UniversityDavid G. Lloyd, Vice-Chancellor and President, University of South AustraliaPeter Dawkins, Vice Chancellor, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1384732020-07-20T11:09:40Z2020-07-20T11:09:40ZHow local governments can attract companies that will help keep their economies afloat during COVID-19<figure><img src="https://images.theconversation.com/files/345529/original/file-20200703-33950-tj7us6.jpg?ixlib=rb-1.1.0&rect=94%2C74%2C4345%2C2801&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Protestors voice their displeasure during a New York City Council hearing on Amazon's plan to locate a headquarters in the city.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/protestors-voice-their-displeasure-during-a-new-york-city-news-photo/1091271432?adppopup=true">Drew Angerer/Getty Images</a></span></figcaption></figure><p><a href="https://www.wsj.com/articles/new-york-city-businesses-struggle-to-stay-afloat-amid-closures-11584398430">As companies labor to stay afloat amid the coronavirus pandemic</a>, some businesses that feel hemmed in by local or statewide workplace safety mandates have <a href="https://www.theguardian.com/world/2020/may/10/elon-musk-threatens-to-move-tesla-hq-out-of-california-over-covid-19-restrictions">threatened to relocate to more accommodating locations</a>. </p>
<p>Before the pandemic, governments offered packages of tax breaks, grants and loans to entice businesses to relocate and encourage businesses to employ more people. <a href="https://www.taxpolicycenter.org/briefing-book/how-do-taxes-affect-economy-short-run">Tax deductions allow companies</a> to invest earnings in production and output. Economic theory suggests that <a href="https://www.cbpp.org/economy/economic-growth-causes-benefits-and-current-limits">the increased employment and consumption that results will spur higher rates of economic growth</a> than what the government could have achieved with the tax revenue.</p>
<p>Johnston County, North Carolina, saw just that when it lured Novo Nordisk to the area. The multinational pharmaceutical company <a href="https://www.wraltechwire.com/2018/12/04/novo-nordisk-plans-22m-expansion-in-johnston-county-more-jobs/">revitalized the local economy</a> by creating jobs and injecting new spending into the community. And in 2018, Alabama and its local governments offered more than <a href="https://www.al.com/news/huntsville/2018/01/toyota-mazda_incentive_package.html">US$800 million in incentives</a> for the construction of a Toyota-Mazda plant outside of Huntsville. The plant is expected to bring $1.5 billion in new construction and <a href="https://www.al.com/news/2020/04/mazda-toyota-wont-open-on-time-because-of-coronavirus.html">4,000 jobs to the region</a>.</p>
<p>As a <a href="https://spia.ncsu.edu/people/faculty_staff/bmcdona">public finance professor</a>, I recently joined my colleagues to <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/puar.13163">analyze the impact of five types of financial incentives</a> on local economies. Though previous studies have shown that <a href="https://www.urban.org/research/publication/state-tax-incentives-economic-development">financial incentives can spark economies</a>, we found that not all incentives improve local conditions. </p>
<p><a href="https://www.fresnobee.com/news/local/article244028647.html">Investment tax credits</a>, which allow businesses to deduct a percentage of their investments, <a href="https://news.mit.edu/2020/state-rd-tax-credits-growth-new-businesses-0612">research and development tax credits</a>, offered to businesses in exchange for their engagement within the community, and <a href="https://www.nhbr.com/will-covid-bring-a-flood-of-property-tax-abatement-requests-in-nh/">property tax abatements</a> all failed to help struggling local economies. </p>
<p>It’s only when incentives are strictly tied to job creation or job training that we found positive economic impacts. That means that locales that want to attract businesses with financial incentives would do well to focus on two things: job creation tax credits and job training grants.</p>
<h2>Amazon, a prime example</h2>
<p>Local governments that decide to help finance private businesses shouldn’t forget to keep an eye on their own fiscal health. </p>
<p>As <a href="https://www.brookings.edu/research/five-economic-development-takeaways-from-the-amazon-hq2-bids/">Amazon searched for its HQ2 headquarters</a>, local governments in Maryland put together incentive packages valued in the billions but with no clear plan to capture economic growth. The governments planned to receive income taxes on high employee wages, which would help defray the costs of the incentives. But the economic benefits from income taxes could take 15 to 20 years to materialize.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&rect=38%2C28%2C3128%2C2050&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&rect=38%2C28%2C3128%2C2050&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/345520/original/file-20200703-25-l24c5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">People opposed to Amazon’s plan to locate a headquarters in New York City protest outside an Amazon book store.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/people-opposed-to-amazons-plan-to-locate-a-headquarters-in-news-photo/1065471442?adppopup=true">Stephanie Keith/Getty Images</a></span>
</figcaption>
</figure>
<p>Amazon’s planned <a href="https://www.theverge.com/2019/2/14/18224993/amazon-hq-2-queens-new-york-backlash-pulls-drops">expansion into New York City</a> fell flat after <a href="https://www.nytimes.com/2019/03/19/nyregion/newyorktoday/AOC-Amazon-nyc.html">local opposition, led by Alexandria Ocasio-Cortez</a>, questioned the return in value to the community that the $3 billion tax incentives would have brought. Among the concerns were fears that HQ2 would drive up housing prices, increase traffic on public transportation and require increases in local taxes to cover the cost of the incentive.</p>
<p>[<em><a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=experts">Expertise in your inbox. Sign up for The Conversation’s newsletter and get expert takes on today’s news, every day.</a></em>]</p>
<p>Both Maryland and New York could have learned from our study that found incentives focused on job creation tax credits and job training grants work better than other types of incentives. These job-related incentives center on employing residents, either by helping businesses defray the cost of salaries or by funding on-the-job training programs for new employees. Both types of incentives transitioned people into better paying jobs and spurred growth. </p>
<p>These findings could prove essential as states respond to the COVID-19 pandemic. </p>
<p>We’re watching North Carolina, which has provided <a href="https://www.journalnow.com/business/nc-gains-6-million-federal-workforce-training-grant/article_42d475cf-9454-5283-92d8-ae2abb5af605.html">$6 million in training grants</a> to help hire displaced workers by allowing businesses to recover the cost of training new employees during the pandemic. It will take at least a year before the impact of this program can be measured but our research suggests that their approach is on target.</p>
<p>Since the start of the outbreak, many state and municipal governments have expanded their incentive packages by adding <a href="https://www.forbes.com/sites/advisor/2020/04/10/list-of-coronavirus-covid-19-small-business-loan-and-grant-programs/#5db7c5a1cc4b">new grants and loans</a> for businesses to help cover operating expenses. In San Francisco, small businesses can apply for a 0% interest hardship loan of up to $50,000. Connecticut is offering loans of up to $75,000, or three months of operating expenses, to businesses impacted by the pandemic.</p>
<p>For many small businesses, these grants and loans may mean the difference between reopening and failure. At least half of U.S. small businesses could fail due to pandemic if they do not receive help, according to a <a href="https://www.latimes.com/california/story/2020-05-16/about-half-of-all-small-businesses-in-danger-of-failing-during-pandemic-new-report-says">survey by the National Federation of Independent Business</a>. As of June 15, more than <a href="https://www.marketwatch.com/story/41-of-businesses-listed-on-yelp-have-closed-for-good-during-the-pandemic-2020-06-25">140,000 small businesses</a> in the United States have already closed their doors. </p>
<p>During the pandemic, the capacity of governments to afford financial incentives has emerged as a major concern. The recession has slashed state and local government coffers by reducing sales and income taxes they receive. Consequently, many governments have become <a href="https://ssrn.com/abstract=3571827">fiscally unstable</a> when demand for public services is at its highest.</p>
<p>Still, the U.S. <a href="https://www.politico.com/news/2020/04/22/mitch-mcconnell-bankruptcy-route-201008">Senate has refused to bail out state and local governments</a>, further shrinking their abilities to kick-start their economies. Absent federal action, local governments would do well to focus economic development on incentives geared towards employment and training, which provide benefits to businesses and their communities.</p><img src="https://counter.theconversation.com/content/138473/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce D. McDonald III does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As state and local governments lure businesses to their shores with financial incentives, a recent study finds that two forms of stimulus spur growth more than others.Bruce D. McDonald III, Associate Professor of Public Budgeting and Finance, North Carolina State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1412922020-07-02T14:49:58Z2020-07-02T14:49:58ZTechnology is a powerful determinant of change, but labour can shape its direction<figure><img src="https://images.theconversation.com/files/343753/original/file-20200624-132951-zprsn7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Technology is a powerful determinant of change but so are trade unions and the state</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Technology is a product of human labour. The working class and society can therefore shape its direction. <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_553682.pdf">According to the International Labour Organisation</a> (ILO), long-term technological change has created more employment than it has destroyed, and has pushed overall living standards to new levels, notwithstanding the disruption that it inevitably brings. </p>
<p>What’s more, the ILO concludes in a <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_553682.pdf">2017 report</a>, there’s no “clear sense that this will be otherwise in the foreseeable future”.</p>
<p>The <a href="https://www.wits.ac.za/scis/">Southern Centre for Inequality Studies</a> has embarked on a research project comparing countries across the global South to explore, through global production networks, the impact of new technology on the future of work and workers. Global production networks have gained increased importance in global production organisation, co-ordination and associated international trade. Using global production networks to anchor an analytical framework enables a focus on the actors involved in the geographically dispersed, multi-scale, multi-dimensional, <a href="https://books.google.co.za/books?hl=en&lr=&id=b5UUDAAAQBAJ&oi=fnd&pg=PP1&dq=(Coe+%26+Yeung,+2015)&ots=4SmfX2nm04&sig=vpKYYxgiw5DXiCGa6ohUJfL_Hv0#v=onepage&q=(Coe%20%26%20Yeung%2C%202015)&f=false">globalised structures of production and trade</a>. </p>
<p>This includes a focus on workers. </p>
<p><a href="https://www.global-labour-university.org/fileadmin/GLU_Working_Papers/GLU_WP_No.58.pdf">My research</a> focuses on the automotive manufacturing sector – South Africa’s leading manufacturing sector. The research shows that, while technology is indeed a powerful determinant of change, it is important to recognise the role that worker organisation and the state, through its industrial policy, play in shaping the direction of change. </p>
<h2>Technological change and job disruption</h2>
<p>My findings indicate a decline in employment in the final vehicle assembly segment by 8,600 workers, from 38,600 in 1995 to 30,000 in 2017. </p>
<p>During the same period, investment by final vehicle companies, known as original equipment manufacturers, increased from R0.8 billion in 1995 to R8.2 billion in 2017. </p>
<p>Figure 1 below shows the relationship between the investment and employment trends. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/344730/original/file-20200630-103673-1k2yd5c.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/344730/original/file-20200630-103673-1k2yd5c.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=361&fit=crop&dpr=1 600w, https://images.theconversation.com/files/344730/original/file-20200630-103673-1k2yd5c.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=361&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/344730/original/file-20200630-103673-1k2yd5c.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=361&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/344730/original/file-20200630-103673-1k2yd5c.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=454&fit=crop&dpr=1 754w, https://images.theconversation.com/files/344730/original/file-20200630-103673-1k2yd5c.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=454&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/344730/original/file-20200630-103673-1k2yd5c.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=454&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Author’s own design.</span>
</figcaption>
</figure>
<p>The role of the state’s industrial policy through the Motor Industry Development Programme <a href="https://www.global-labour-university.org/fileadmin/GLU_Working_Papers/GLU_WP_No.58.pdf">played a key role</a> from September 1995 to December 2012 in attracting increased investment. The plan offered incentives, including import rebate credit certificates. The incentives gave automotive exporting companies reduced import duty, or duty-free imports, on the components that they did not source locally or vehicle models they did not produce in the country.</p>
<p>Increased automation of production, a key part of investment by original equipment manufacturers, wasn’t introduced in isolation. With it came global production systems, new methods of work and ways of co-ordinating production, all more effective than the previous ones. </p>
<p>The changes included rationalisation of vehicle model platforms, in certain instances down to single vehicle platform assembly plant operations. </p>
<p>From January 2013 <a href="https://www.global-labour-university.org/fileadmin/GLU_Working_Papers/GLU_WP_No.58.pdf">investment in the automotive manufacturing sector</a> was led by the Automotive Production and Development Programme. This was made up of several incentives. These included a cash grant of 25%–30% of the value of qualifying investment for the vehicle assembly segment and 25%–35% for the components manufacturing segment, payable over three years. </p>
<p>The global economic crisis of 2008 badly affected investment, production and employment in original equipment manufacturers. This is reflected in Figure 1 above, and Figure 2 below. </p>
<p>Yet these manufacturers achieved remarkable productivity from 1995, as a result of technological change and the accompanying work reorganisation and restructuring. </p>
<p>During the period 1995 to 2017, they gained double the capacity of output per worker. Figure 2 below shows their total production volumes divided by their total employment. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/344736/original/file-20200630-103636-1inh4m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/344736/original/file-20200630-103636-1inh4m.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=366&fit=crop&dpr=1 600w, https://images.theconversation.com/files/344736/original/file-20200630-103636-1inh4m.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=366&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/344736/original/file-20200630-103636-1inh4m.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=366&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/344736/original/file-20200630-103636-1inh4m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=460&fit=crop&dpr=1 754w, https://images.theconversation.com/files/344736/original/file-20200630-103636-1inh4m.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=460&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/344736/original/file-20200630-103636-1inh4m.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=460&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Author’s own design.</span>
</figcaption>
</figure>
<p>The 38,600 workers employed by the manufacturers in 1995 produced 388,442 vehicles, averaging an output of 10 vehicles per worker. The rise in production surpassed half a million, reaching a peak of 652,965 vehicles in 2008. These were produced by a reduced workforce of 35,900 workers – that is the 1995 workforce less 2,700 workers. </p>
<p>The average output per worker increased to about 16 vehicles in 2008. The increase reached double capacity in 2014 from that of 1995, to an average of 20 vehicles per worker. In 2014 the manufacturers’ workforce was reduced to 27,715 – that is the 1995 workforce less 10,885 workers. </p>
<p>The trends presented here reflect the original equipment manufacturers’ specific reality. The research findings show that there are production conditions that, if strong enough, can counteract the reduction in the workforce, and even result in an increase in the workforce, which is important for industrial policy. This is clearly demonstrated by the case of VW, highlighted below. </p>
<h2>Worker agency</h2>
<p>In 2015, VW decided to <a href="https://m.engineeringnews.co.za/article/auto-industry-2018-02-09/rep_id:4433">invest</a> R6.1 billion, including R564 million for 330 new robots, at its vehicle body construction plant in Uitenhage, Eastern Cape province. </p>
<p>About 600 robots, including the 300 new ones, <a href="https://www.businesslive.co.za/bt/business-and-economy/2018-02-03-more-robots-but-more-workers-too-as-vw-modernises-car-assembly/?&external">were expected to complete the structure of each vehicle</a> in a reduced time of one minute and 57 seconds.</p>
<p>The new robots resulted in 40 qualified fitters being declared redundant (not to speak of less skilled workers). VW served the National Union of Metalworkers of South Africa (NUMSA) with a retrenchment notice. The union challenged VW, resulting in an agreement for the retraining of the fitters as electricians. This paved the way for their jobs to be saved. </p>
<p>VW globally also allocated more production volumes to its Uitenhage plant. This helped save the jobs of (less skilled) production workers that could otherwise have been disrupted by the use of robots. And it resulted in an additional 300 production workers being required. </p>
<p>The plant’s production increased to 133,000 vehicles in 2018, of which 83,000 were for export markets. The 2018 output reflected an increase of 23,000 vehicles from 110,000 in 2017. In 2019 the plant reached its target of 160,000 vehicles, 27,000 more than in 2018. </p>
<h2>Conclusion</h2>
<p>The decline in overall manufacturers’ employment from 1995 to 2017 in the context of increased capital investment and productivity underlines the necessity of increasing local production to save jobs and create additional employment. This social upgrading through the targeting of employment creation is an important industrial policy consideration and can be linked with the investment incentives given by the state.</p>
<p>The VW case shows that increased production localisation in global production networks can benefit employment in two important ways, despite technological disruption. Firstly, it counteracts retrenchments consequent on the way new technology is adopted. Secondly, it creates additional employment. As the role played by NUMSA at VW indicates, organised labour can shape the direction of new technology and its impact on workers.</p><img src="https://counter.theconversation.com/content/141292/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mohubetswane Mashilo is a post-doctoral fellow with the Southern Centre for Inequality Studies (SCIS) at the University of the Witwatersrand, Johannesburg. He has previously received funding (research stipend) from the Hans-Böckler Foundation which supported the publication in 2019 of a Working Paper that he produced, titled 'Auto Production in South Africa and Components Manufacturing in Gauteng Province', as part of the project 'Global value chains, economic and social upgrading' at the Berlin School of Economics and Law. He is a member of the African National Congress and the South African Communist Party.</span></em></p>Increased capital investment and productivity need not result in job losses. Government can use industrial policy to link investment incentives to job preservation and even job creation.Alex Mohubetswane Mashilo, Postdoctoral Research Fellow, Southern Centre for Inequality Studies, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1393862020-07-01T02:17:34Z2020-07-01T02:17:34Z3 planning strategies for Western Sydney jobs, but do they add up?<p><em>This is the third of <a href="https://theconversation.com/au/topics/western-sydney-jobs-deficit-88804">three articles</a> based on newly released <a href="https://www.westernsydney.edu.au/cws/policy">research</a> on the impacts of a lack of local jobs on the rapidly growing Western Sydney region.</em></p>
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<p>The problem of not enough jobs in Western Sydney has been in the public spotlight for half a century. At the same time, though, <a href="https://theconversation.com/governments-population-plan-is-more-about-maximising-win-wins-than-cutting-numbers-114190">record immigration levels</a> and cheap housing on new residential estates way out on the urban fringe have fuelled growth in the region’s labour force. <a href="https://theconversation.com/jobs-deficit-drives-army-of-daily-commuters-out-of-western-sydney-139384">Long-distance commuting by car</a> is one consequence. </p>
<p>Our estimate in our newly released research <a href="https://www.westernsydney.edu.au/cws/policy">reports</a> is that by 2036, should nothing change, Western Sydney’s 1.5 million resident workers will confront a shortage of 325,000 jobs. This will mean a daily outflow from the region of over 560,000 workers. And that would be a planning disaster.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/jobs-deficit-drives-army-of-daily-commuters-out-of-western-sydney-139384">Jobs deficit drives army of daily commuters out of Western Sydney</a>
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<a href="https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=352&fit=crop&dpr=1 600w, https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=352&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=352&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=443&fit=crop&dpr=1 754w, https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=443&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/342608/original/file-20200618-41209-fu1yuj.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=443&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Centre for Western Sydney, Data: .id</span>, <span class="license">Author provided</span></span>
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<p>The good news is that governments are aware of the problem. Perhaps they have been sensitised by <a href="https://www.abc.net.au/news/2019-05-14/federal-election-2019-the-battle-for-western-sydney/11076762?nw=0">increasingly close election results</a> in Western Sydney seats. </p>
<p>Governments are looking to three strategies to solve the problem – although none has yet generated a permanent job. A COVID-19 recession has arrived to make start-up even more difficult. </p>
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<em>
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Read more:
<a href="https://theconversation.com/recession-will-hit-job-poor-parts-of-western-sydney-very-hard-139385">Recession will hit job-poor parts of Western Sydney very hard</a>
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<h2>Plan A: Western Sydney Airport</h2>
<p>The first strategy is the <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/Background_Papers/bp9798/98BP20">Western Sydney Airport</a>. A first runway is planned for 2026 and a second around mid-century. </p>
<p>The <a href="https://pmtranscripts.pmc.gov.au/release/transcript-23425">federal government</a> and <a href="https://www.westernsydneyairport.gov.au/sites/default/files/47-volume-3-references.pdf">impact statements</a> say a fully operational airport by 2063 will generate 88,000 airport jobs. It will also create 25,000 jobs on an adjoining business park and a further 29,000 jobs elsewhere around Western Sydney. If realised, these impressive numbers would make a major contribution to the region’s job needs – but not for a long time yet.</p>
<h2>Plan B: Western Sydney City Deal</h2>
<p>The second strategy is the <a href="https://www.infrastructure.gov.au/cities/city-deals/western-sydney/files/western-sydney-city-deal.pdf">Western Sydney City Deal</a>, which includes the promise of what it calls an <a href="https://pmtranscripts.pmc.gov.au/release/transcript-41486">aerotropolis</a>. This is the idea an airport can attract high-value enterprises to its vicinity. A <a href="https://www.wcaa.sydney/about-us">Western City and Aerotropolis Authority</a> (WCAA) has been established with the promise of 200,000 jobs across a new <a href="https://www.greater.sydney/metropolis-of-three-cities/vision-of-metropolis-of-three-cities/western-parkland-city-vision">Western Parkland City</a>. </p>
<p>It’s a hugely ambitious project. Many have <a href="https://theconversation.com/the-future-of-sydney-a-tale-of-three-cities-88568">questioned</a> both the <a href="https://theconversation.com/flying-into-uncertainty-western-sydneys-aerotropolis-poses-more-questions-than-answers-73682">idea of an aerotropolis</a> and the possibility of one in Western Sydney yielding 200,000 permanent jobs.</p>
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<strong>
Read more:
<a href="https://theconversation.com/western-sydney-aerotropolis-wont-build-itself-a-lot-is-riding-on-what-governments-do-97462">Western Sydney Aerotropolis won't build itself – a lot is riding on what governments do</a>
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<h2>Plan C: Metropolis of 3 Cities</h2>
<p>The third strategy is the set of plans in the Greater Sydney Commission’s <a href="https://www.greater.sydney/metropolis-of-three-cities">A Metropolis of Three Cities</a>. The plans divide Western Sydney into two cities, the <a href="https://www.greater.sydney/metropolis-of-three-cities/vision-of-metropolis-of-three-cities/central-river-city-vision">Central River City</a> and the <a href="https://www.greater.sydney/metropolis-of-three-cities/vision-of-metropolis-of-three-cities/western-parkland-city-vision">Western Parkland City</a>, broadly the inner (and older) and outer (and newer) districts of the region. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=676&fit=crop&dpr=1 600w, https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=676&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=676&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=849&fit=crop&dpr=1 754w, https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=849&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/342622/original/file-20200618-41238-1i0xc8f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=849&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Greater Sydney Commission’s ‘Three Cities’ strategy has commendable goals but is vague about where all the jobs will come from.</span>
<span class="attribution"><span class="source">Greater Sydney Commission</span></span>
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<p>Commendably, the commission stresses the need to integrate population, housing and job targets into Sydney’s land-use planning. The commission aspires to the <a href="https://theconversation.com/access-across-australia-mapping-30-minute-cities-how-do-our-capitals-compare-117498">30-minute city</a> as a daily travel range for every Sydney household.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-close-is-sydney-to-the-vision-of-creating-three-30-minute-cities-115847">How close is Sydney to the vision of creating three 30-minute cities?</a>
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<p>The commission estimates 817,000 extra jobs are needed from 2016-36 to accommodate metropolitan Sydney’s labour force growth. Western Sydney’s share of this total, according to <a href="https://opendata.transport.nsw.gov.au/dataset/employment-projections">Transport for NSW</a>, is 49.6%, equal to 405,000 jobs.</p>
<p>The commission’s plans contain forecasts of job growth in each of the metropolitan area’s strategic centres. For the Central River City, centred on Parramatta, the commission nominates ten strategic centres and predicts a baseline growth of 71,400 jobs for 2016-36. For the Western Parkland City, the fringe suburbs plus the airport, the plan proposes only three strategic centres and predicts growth of only 24,000 jobs for 2016-36. </p>
<p>So, the total growth in jobs from 2016-36 assigned to Western Sydney’s strategic centres is 95,400. That leaves over 300,000 jobs to be found by 2036 from growth somewhere else in Western Sydney.</p>
<p>While the commission acknowledges the importance of the airport and aerotropolis for jobs in the Western Parkland City, it fails to attach job targets to these ventures. This makes sense, given the uncertainty about the level of jobs generation that will flow from these projects. And neither of these ventures is expected to become fully operational until after mid-century.</p>
<p>Absent airport-aerotropolis jobs, the commission nods in the direction of greenfields employment areas to provide more than 57,000 jobs over the next 30 years. A fancy <a href="https://theurbandeveloper.com/articles/thinktank-meet-to-discuss-australias-5bn-smart-city">science park</a> to accompany a new residential estate at Luddenham is to deliver 12,000 jobs. But little detail is provided in either case.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/reimagining-sydney-with-3-cbds-how-far-off-is-a-parramatta-cbd-102197">Reimagining Sydney with 3 CBDs: how far off is a Parramatta CBD?</a>
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<h2>Huge risks and uncertainties remain</h2>
<p>So each of the three interventions carries risk. The airport is being constructed at a time of great volatility for air travel. There is a high degree of uncertainty about the nature and volume of air traffic in the longer term. In any case, the airport’s big benefits won’t come until the 2050s. </p>
<p>The spillover effects from the airport into an aerotropolis are untested and, like the airport, can only ramp-up around mid-century. </p>
<p>Then, to get 50,000 jobs from greenfields industrial areas in Western Sydney would mean a monumental shift from a pattern of transport and logistics investments with low job creation that have dominated equivalent sites over the past decade.</p>
<p>There’s not much here to give confidence that a Western Sydney planning disaster will be averted. The region’s chronic jobs deficit is central to the problem. More detailed planning, rigorous assessment and generous resourcing are all urgently needed.</p>
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<p><em>The Centre for Western Sydney has released three reports on Western Sydney’s growing jobs deficit. You can read the reports <a href="https://www.westernsydney.edu.au/cws/policy">here</a>.</em></p><img src="https://counter.theconversation.com/content/139386/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Phillip O'Neill does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A new airport, aerotropolis and development of two of the ‘three cities’ in the metropolitan strategy all aim to create jobs in Western Sydney. But right now the only certainty is a huge jobs deficit.Phillip O'Neill, Director, Centre for Western Sydney, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1405052020-06-18T12:18:46Z2020-06-18T12:18:46ZConservation could create jobs post-pandemic<figure><img src="https://images.theconversation.com/files/341716/original/file-20200615-153849-1cxzlgq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People have been rediscovering nature during the pandemic, but it's not just good for public heath. Conservation also creates jobs.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/visitors-walk-along-the-path-to-start-a-backpacking-trip-on-news-photo/1249037902?adppopup=true">Ezra Shaw/Getty Images</a></span></figcaption></figure><p>Earlier this month, President Trump signed an executive order making it easier for pipeline projects and <a href="https://www.washingtonpost.com/climate-environment/2020/06/04/trump-sign-order-waive-environmental-reviews-key-projects/">other oil and gas development to progress</a>, <a href="https://www.nbcnews.com/politics/donald-trump/trump-admin-relaxes-regulations-fight-coronavirus-also-loosens-environmental-rules-n1177761">claiming environmental regulations cause economic burdens</a> and cost jobs.</p>
<p>A more effective way to stimulate the economy and protect the environment, my work suggests, is to pass legislation such as the <a href="https://www.congress.gov/bill/116th-congress/senate-bill/3422">Great American Outdoors Act</a>, a bill the Senate <a href="https://www.azcentral.com/story/news/politics/2020/06/17/national-parks-bill-addresses-long-deferred-maintenance-projects/3205195001/">passed on June 17, 2020</a>. The House introduced <a href="https://cunningham.house.gov/media/press-releases/cunningham-bipartisan-colleagues-introduce-great-american-outdoors-act">companion legislation</a> earlier this month.</p>
<p><a href="https://scholar.google.com/citations?user=paBX4XYAAAAJ&hl=en">I’m an expert in employment in the U.S. economy</a>, and my <a href="https://www.bu.edu/pardee/files/2020/06/Employment_Impacts_of_Conservation_Spending-Peltier2020.pdf">recent research</a> shows that conservation and park development create far more jobs than oil and gas. These two categories are not always mutually exclusive, but often a choice must be made about how to use public lands – conserve them, develop them as parks or open them up to exploration for oil and gas. </p>
<h2>Conservation creates more jobs than fossil fuel development</h2>
<p>My research uses the input-output model, a tool economists use to study the economic impacts of spending <a href="https://www.bea.gov/data/industries/input-output-accounts-data">changes in a national or regional economy</a>. Expansion of the oil and gas industry, for instance, can be compared to expansion of conservation or park development. </p>
<p>Using this type of model, researchers can capture the links among different industries and estimate the economy-wide impact of any spending change, including the change in employment that results by spending US$1 million in conservation in comparison to oil and gas. Employment changes that result from both public and private spending can be evaluated using this model. </p>
<p>The model shows that each $1 million of spending creates between 17 and 31 jobs in conservation and related industries, while only eight jobs are created through oil and gas.</p>
<h2>Stimulating the environment helps the economy</h2>
<p>Trump’s recent executive order wasn’t signed in a vacuum. As of May 20, 2020, <a href="https://www.nytimes.com/interactive/2020/climate/trump-environment-rollbacks.html">The New York Times reported</a> that 100 environmental rollbacks were underway, with 66 completed over the past three years and 34 in progress. </p>
<p>Together, these rollbacks <a href="https://climate.law.columbia.edu/climate-deregulation-tracker">allow for more carbon emissions</a> and other pollution from industrial facilities and vehicles. They also <a href="https://www.law.nyu.edu/sites/default/files/climate-and-health-showdown-in-the-courts.pdf">open up land for more oil and gas development</a> by reducing protections for land, water and wildlife.</p>
<p>But oil and gas development are among the most capital-intensive industries in the economy, meaning that the bulk of the spending in these industries is for equipment, including drilling platforms, pipelines and refining plants. Only a small portion of the spending is for labor costs – <a href="https://apps.bea.gov/iTable/iTable.cfm?ReqID=51&step=1">13% as of 2018</a>.</p>
<p>Conservation is much more labor intensive, with a higher proportion of overall spending going to pay workers rather than buy equipment and materials. </p>
<p>It’s true that oil extraction is often privately funded, but when public lands are used for oil and gas development, this precludes other uses such as conservation or outdoor recreation. </p>
<h2>Conservation in the Senate</h2>
<p>Funding conservation also happens to be an area with <a href="https://www.congress.gov/bill/116th-congress/senate-bill/3422/cosponsors?searchResultViewType=expanded&KWICView=false">bipartisan support</a>, as the great outdoors appeals to anglers, nature enthusiasts, hunters and wildlife lovers alike.</p>
<p>The Great American Outdoors Act <a href="https://www.congress.gov/bill/116th-congress/senate-bill/3422#:%7E:text=Great%20American%20Outdoors%20Act,maintenance%20projects%20on%20federal%20lands">fully funds the Land and Water Conservation Fund</a>. This <a href="https://www.lwcfcoalition.com/about-lwcf">fund</a> supports parks at the city, state and national level and protects various natural areas.</p>
<p>Fully funding the Land and Water Conservation Fund, at $900 million per year, would support up to 28,000 jobs, according to my estimates. An additional $1.9 billion per year for five years contained in the Great American Outdoors Act would support an added 59,000 jobs in parks development and restoration of public lands nationwide.</p>
<p>The act could therefore support close to 100,000 jobs annually. These jobs include not only the park and conservation workers themselves – what we call the “direct jobs” – but workers throughout the supply chain, such as bus drivers, restaurant workers and sporting goods retailers.</p>
<p>Conservation and park jobs, in addition to having a wide range of skill level and pay, also are spread throughout the country, unlike oil and gas development, which is <a href="https://www.eia.gov/state/seds/sep_prod/SEDS_Production_Report.pdf">concentrated</a> in the Gulf states, Pennsylvania, Ohio, North Dakota, Alaska and the Pacific Northwest.</p>
<p>The pandemic of COVID-19 has had devastating economic effects on individuals and businesses. Research shows that funding conservation and outdoor recreation is one way to help Americans get back on their feet. </p>
<p>[<em>You need to understand the coronavirus pandemic, and we can help.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-help">Read The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/140505/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Heidi Peltier does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Trump administration is rolling back environmental regulations, claiming it’s good for the economy. But research shows that conservation is better both for public health and for job creation.Heidi Peltier, Research Professor in Political Science; Faculty Research Fellow at the Pardee Center for the Study of the Longer-Range Future, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1359702020-05-19T14:29:47Z2020-05-19T14:29:47ZCape Town’s creative firms are business innovators – but they’re vulnerable<figure><img src="https://images.theconversation.com/files/335756/original/file-20200518-83384-c3zmmj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A mural by famed Cape Town artist Faith47.</span> <span class="attribution"><span class="source">Frédéric Soltan/Corbis/Getty Images</span></span></figcaption></figure><p>In 1941 Hedy Lamarr, a Hollywood actress, and George Antheil, an experimental composer, patented “frequency hopping”. The technique is still used today for secure radio communications, Wi-Fi, GPS and Bluetooth. </p>
<p><a href="https://link.springer.com/chapter/10.1007%2F0-306-46999-5_11">Frequency hopping</a> employs a spectrum of frequency for radio communications that’s repeatedly changed according to an agreed sequence between sender and receiver. This secures a message against interception. Lamarr hoped the <a href="https://www.businessinsider.com/hedy-lamarr-george-antheil-frequency-hopping-2014-7?IR=T">idea</a> would help in the <a href="https://www.britannica.com/topic/electronic-warfare">defence</a> of her adopted country, the US, in the second world war. </p>
<p>Antheil’s experience helped. He composed for multiple players, up to 16 pianos at a time, and had developed a mechanism to help keep them in sync. This also worked to enable frequency hopping technology. It’s one startling example of how combining the creative imagination with the world of technology can lead to new discoveries. </p>
<p>We wanted to find out more about South African firms that are fusing creative skills with digital technologies to produce new products and services. </p>
<p>In November 2019, the <a href="https://www.southafricanculturalobservatory.org.za">South African Cultural Observatory</a> partnered with a group of UK academics to <a href="https://www.southafricanculturalobservatory.org.za/article/the-overlaps-between-the-digital-and-creative-sectors-innovation-and-technology-in-the-creative-economy">track</a> how these firms – graphic designers, film makers, music producers and the like – are using this fusion to drive growth.</p>
<p>There’s increasing interest in the <a href="https://www.southafricanculturalobservatory.org.za/article/creative-industries-can-drive-economic-growth-job-creation-report">contribution</a> of the creative economy to growth and job creation in South Africa. But innovation research is still mostly focused on STEM sectors – science, technology, engineering and mathematics. </p>
<p>Our research examined the links and connections between digital technologies, innovation, intellectual property, and diversity in the cultural and creative industries. Our findings showed that there is an agile group of mostly small, highly innovative, firms that combine cultural and digital skills to meet market demand. </p>
<h2>Our study</h2>
<p>Cape Town was chosen for a pilot <a href="https://www.southafricanculturalobservatory.org.za/article/the-overlaps-between-the-digital-and-creative-sectors-innovation-and-technology-in-the-creative-economy">study</a> because of its reputation as a creative city. The <a href="https://en.unesco.org/creative-cities/cape-town">concept</a> refers to clusters of creative firms, but also includes events and skills. </p>
<p>A cluster of 349 cultural and creative firms operating in the Cape Town metro area were located and mapped. Through telephone interviews and an online survey 74 responses were received. The research design was partly based on a similar <a href="http://www.brightonfuse.com/wp-content/uploads/2013/10/The-Brighton-Fuse-Final-Report.pdf">study</a> in the UK’s Brighton cluster, which allowed for interesting international comparisons. </p>
<p>South Africa does not have an officially recognised definition of the cultural and creative industries, but much research and policy makes use of UNESCO’s <a href="https://en.unesco.org/creativity/files/cultural-economy-unescos-framework-cultural-statistics">Framework for Cultural Statistics</a>. This includes more ‘traditional’ cultural sectors – like fine art, heritage, performing arts, music, film and book publishing – and also more commercial ones – like fashion, architecture, video games and advertising. </p>
<p>Forming the largest group responding to our survey were firms related to design (fashion design 19%; graphic design 14%; architecture 1%). This was followed by film, television, video and radio (12%); crafts (12%); music and performing arts (7%); and photography (7%). The sample also had representatives from advertising and marketing (12%); IT, software and computer services (4%); museums, galleries and libraries (3%). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/335760/original/file-20200518-83397-ranl0i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The main hall of the new Zeitz Museum of Contemporary African Art in the cultural city of Cape Town.</span>
<span class="attribution"><span class="source">Rodger Bosch/AFP/Getty Images</span></span>
</figcaption>
</figure>
<h2>We found an agile business community</h2>
<p>There is strong evidence of a cluster of firms in Cape Town that are “fused” to combine digital technology with creative inputs to produce goods and services. </p>
<p>They exhibit high levels of innovation in business processes, goods and services, with 82% reporting involvement in some form of innovation over the last three years. Most common was process innovation (the way of running the business), which included things like digitisation (82%), big data usage (21%), and artificial intelligence (18%). Next most frequent were development of new products or services and/or the significant improvement of existing ones (72%), and marketing innovations (50%). Some form of formal research and development was engaged in by 45% of firms. </p>
<p>They’re an interdisciplinary cluster. An average of 51% of employees had a qualification in design; 42% in arts or humanities; 32% in commerce; and 20% had a STEM qualification. </p>
<p>More than a third of firms are start-ups, founded in the past five years. Most are small. The median number of employees was four, and 23% were owner operated with no employees. But they have the ability to draw on a wide range of external skills. A median of five freelancers were employed per firm in the previous financial year. The most commonly sourced skills were graphic, multimedia and web design and software development. Similar to what was found in Brighton, this business model allows them to be agile and productive in the volatile, project-based world of the creative economy.</p>
<p>Our results showed that, for at least some of these small firms, combining a range of skills crossing between the creative or cultural and digital sectors has resulted in faster growth rates than their bigger, older counterparts. </p>
<h2>But it’s a vulnerable time</h2>
<p>Yet it is this project-based way of working that makes many of these firms especially vulnerable during tough economic times. An <a href="https://www.southafricanculturalobservatory.org.za/download/460/98b297950041a42470269d56260243a1/The+Employment+of+Youth+and+Women+in+Cultural+Occupations+in+South+Africa">analysis</a> of the Statistics South Africa Labour Force Survey, using the UNESCO definitions, showed that 50% of people in cultural occupations are employed informally, compared to 32% in other occupations. Freelancers make up 35% of cultural workers, compared to 10% of non-cultural workers. </p>
<p>The cultural and creative sector has also always had a vital, but seldom acknowledged, role to play in innovation. Despite this, only a minority of firms in our study used formal intellectual property protection, or earned revenue from intellectual property.</p>
<p>The exclusion of the cultural and creative sector from South Africa’s Draft White <a href="https://www.gov.za/documents/white-paper-science-technology-and-innovation-draft-14-sep-2018-0000">Paper</a> on Science, Technology and Innovation (2018) may be a mistake. Similar papers by other countries, like the <a href="https://www.gov.uk/government/publications/culture-white-paper">UK</a>, do acknowledge the link between culture, technology and innovation. </p>
<p>Similarly, cultural <a href="http://www.dac.gov.za/white-papers">policy</a> could profitably include support for various kinds of innovations taking place in the cultural and creative industries, such as by these firms. </p>
<p>Especially in times of change and upheaval, the next marvellous idea may just come from those working at the interface between the creative and the technological.</p><img src="https://counter.theconversation.com/content/135970/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research presented in this article is part of an international collaboration entitled "The roles of IP and diversity in the creative industries: Networking South Africa and the UK" which was funded by the Arts and Humanities Research Council (UK). It was also supported by the South African Cultural Observatory, which is funded by the South African Department of Sport, Arts and Culture.</span></em></p>There aren’t a lot of studies on South Africa’s cultural economy. A new one finds a cluster of creative firms in Cape Town with high levels of innovation.Jen Snowball, Professor of Economics and Researcher at the South African Cultural Observatory, Rhodes UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1249222019-10-09T22:35:44Z2019-10-09T22:35:44ZDrop the doom and gloom: Climate journalism is about empowerment<figure><img src="https://images.theconversation.com/files/296105/original/file-20191008-128652-1k2rhjz.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4000%2C2634&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A farmer who installed solar panels to power his irrigation systems on the family farm walks by the panels near Claresholm, Alta., in June 2019. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Jeff McIntosh</span></span></figcaption></figure><p>There is a simple irony in dealing with climate change. To get a handle on the problem means that, at a certain level, the conversation has to move away from climate change. What does that mean?</p>
<p>The secretary general of Amnesty International shed some light on this apparent contradiction ahead of September’s United Nations climate change conference in New York.</p>
<p>“I think one of the catastrophic mistakes we made in 1992, when the Rio Earth Summit happened, was framing our response to the threat of climate change solely or primarily as an environmental issue,” <a href="https://www.democracynow.org/2019/9/19/kumi_naidoo_climate_change_global_strikes">Kumi Naidoo said</a> on the news program <em>Democracy Now!</em></p>
<p>“I think we needed to have done then what we are trying to do now … which is to ensure that we bring a cross-cutting understanding of climate change and bring a more human-centric approach to addressing (it).”</p>
<p>This means, Naidoo said, dealing with climate change by focusing on human rights and on reducing inequality.</p>
<h2>Broadening the climate conversation</h2>
<p>When it comes to climate-related economic issues, news narratives typically focus on the trade-off between jobs and protecting the environment. </p>
<p>That was one of the findings of a <a href="https://www.policyalternatives.ca/jobs-vs-environment">December 2018 study</a> by the Canadian Centre for Policy Alternatives. “Although they tend to choose different sides, mainstream and alternative media both frequently reinforce the assumption that there is an inevitable trade-off between environmental protection and job creation,” the study concluded.</p>
<p>What if the discussion in the news media, and in politics, instead focused on what a post-carbon economy would actually look like, and, crucially, how such an economy would actually thrive? It’s the vision of a society and of a prosperous, modern economy that has climate change <a href="https://www.economist.com/leaders/2019/09/19/the-climate-issue">baked into it</a>.</p>
<p>But how does the world actually get there, especially when mitigating climate change is still largely seen as an impediment to economic growth?</p>
<p>Better climate change communication is a good place to start.</p>
<h2>Making the uncomfortable comfortable</h2>
<p>Mitigating climate change is often seen in the context of making choices that can be undesirable: flying less, buying less, ditching the car.</p>
<p>Instead, the choices people must make to fight climate change can be framed as enjoyable, desirable or even moral, instead of avoidable. In other words, things that people actually want to do.</p>
<p>To make that shift, University of Michigan sustainability professor Andy Hoffman argues for a “<a href="https://ssir.org/book_reviews/entry/climate_science_as_culture_war">consensus-based</a>” approach to climate change. Such an approach treats climate change as a cultural issue instead of simply as a scientific and environmental problem. It “frames climate change mitigation as a gain rather than a loss to specific cultural groups,” Hoffman writes. He adds:</p>
<blockquote>
<p>“To be effective, climate communicators must use the language of the cultural community they are engaging.”</p>
</blockquote>
<p>It’s important to speak to people about climate change <a href="https://beccconference.org/wp-content/uploads/2018/10/marshall_presentation2018.pdf">through values</a> that make sense to them.</p>
<p>Stories of people taking action that others around them <a href="https://www.semanticscholar.org/paper/SOCIAL-NORMS%3A-AN-UNDERESTIMATED-AND-UNDEREMPLOYED-Griskevicius-Cialdini/8791b3ce170ee1328adb2df83d75c36fdad326e9">can relate to</a> also have a huge impact. A neighbour enjoying their electric vehicle (and saving on gas) has a far more persuasive influence over other residents on the block than an expert on the news telling people they need to drive less.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/296301/original/file-20191009-3894-h2vr9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/296301/original/file-20191009-3894-h2vr9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/296301/original/file-20191009-3894-h2vr9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/296301/original/file-20191009-3894-h2vr9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/296301/original/file-20191009-3894-h2vr9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/296301/original/file-20191009-3894-h2vr9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/296301/original/file-20191009-3894-h2vr9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A neighbour’s love of her electric car is likely a lot more compelling than experts urging people to drive electric vehicles.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>A different narrative</h2>
<p>When it comes to climate change coverage, doom and gloom is <a href="https://shorensteincenter.org/media-disengagement-climate-change/">usually the lead</a>. There is also a heavy emphasis in conventional climate journalism on <a href="https://www.cbc.ca/news/canada/british-columbia/individual-action-matters-climate-communicators-need-to-give-useful-advice-researcher-says-1.5085245">individual lifestyle changes</a>.</p>
<p>Instead, climate journalism can play a much more important role in painting the picture of how a post-carbon economy might actually work. That process can begin with a conversation around solutions that are already being implemented, especially those that are happening through collective action and a sense of empowerment.</p>
<p>A great example is <a href="https://globalnews.ca/video/5958382/tsou-ke-nation-becomes-model-for-sustainable-living">a recent Global News report</a> on the T’Sou-ke Nation on Vancouver Island, a community that is taking renewable energy production into its own hands. Or <a href="https://www.macleans.ca/news/canada/eden-mills-ontario-canadas-first-carbon-neutral-community/">a story in <em>Maclean’s</em> magazine</a> about an Ontario town that is working toward a greener future.</p>
<p>These <a href="https://www.researchgate.net/publication/327141609_Engaging_climate_communication_Audiences_frames_values_and_norms">forms of storytelling</a> are crucial for the conversation to shift toward a new default position: climate change as the current upon which the economy rides. Ultimately, it will require political will for the world to get there. But support is building, and it’s the masses who are leading the way.</p>
<p>“If you actually look at the most beautiful parts of our histories, it’s mass movements, it’s collectives, it’s groundswells,” author and activist Rebecca Solnit <a href="https://www.cbc.ca/radio/thecurrent/the-current-for-sept-30-2019-1.5300478/everyone-loves-a-good-hero-story-but-this-author-says-we-need-to-look-at-the-bigger-picture-1.5303050">recently said</a> on CBC Radio’s <em>The Current.</em></p>
<p>“We need a framework in which maybe everybody is potentially a hero, and it’s not the exceptional but the ordinary people who change the world.”</p>
<p>As stories about collective action become a more prominent feature of climate journalism, so too will climate change start to feel more accessible and less scary. In the near future, climate change will not be something big, distant and seemingly impossible to overcome.</p>
<p>Instead, it will just be a fact of life around which everything else revolves, including human rights, jobs and the economy. The best climate change story, in other words, may very well not be a climate change story at all.</p>
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<p class="fine-print"><em><span>Kamyar Razavi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Climate journalism can play an important role in painting the picture of a post-carbon economy. It should start by encouraging collective action and a sense of empowerment for everyday people.Kamyar Razavi, PhD candidate in the School of Communication, Simon Fraser UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1227452019-09-12T13:01:06Z2019-09-12T13:01:06ZSouth Africa’s informal sector creates jobs, but shouldn’t be romanticised<figure><img src="https://images.theconversation.com/files/291083/original/file-20190905-175691-1oo9pz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Working hours in the informal sector are long, and earnings often low</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The publication of South Africa’s <a href="http://www.statssa.gov.za/?p=12376">latest unemployment figures</a> was accompanied by the usual wringing of hands and promises of job creation. This time, however, a new controversy arose because of an argument that official statistics don’t count economic activities in the informal sector.</p>
<p><a href="https://www.biznews.com/good-hope-project/2019/08/22/gg-alcock-recognise-informal-economy">The claim</a> that official employment data underestimates the informal sector is largely based on the premise that many people who undertake activities in the informal sector are mistakenly counted as unemployed. </p>
<p>Statistics South Africa has two surveys which measure informal sector employment. The <a href="http://www.statssa.gov.za/?s=Quarterly+Labour+Force+Survey&sitem=publications">Quarterly Labour Force Surveys</a> (QLFS) provide the official unemployment numbers. They also count informal sector activities using an internationally comparable definition endorsed by the <a href="https://www.ilo.org/wcmsp5/groups/public/---americas/---ro-lima/---sro-port_of_spain/documents/meetingdocument/wcms_306276.pdf">International Labour Organisation</a>. </p>
<p>In addition, every four years the <a href="http://www.statssa.gov.za/?s=Survey+of+Employers+and+the+Self-Employed+&sitem=publications">Survey of Employers and the Self-Employed</a> interviews owners or operators of small businesses which are not registered for value added tax identified in the QLFS.</p>
<p>What do these surveys show? The latest <a href="http://www.statssa.gov.za/publications/P0211/P02112ndQuarter2019.pdf">QLFS</a> found about 3 million people were working in the informal sector. This is just under 20% of total employment. </p>
<p>Critics of official data argue that a wide range of informal sector activities are not visible. Analysis of QLFS data by activity suggests otherwise. By way of example, analysis of QLFS data finds 92 600 mechanics, 71 800 construction labourers, 52 100 traditional medicine practitioners, 35 700 electricians and plumbers and 26 500 tavern and shebeen operators, among many other activities. </p>
<p>In short, official statistics suggest that the informal sector accounts for a large share of total employment. There seems to be little sense in quibbling about the numbers without compelling evidence to suggest that they are way off.</p>
<h2>A shadow economy?</h2>
<p>Some characterise the informal sector as the <a href="https://www.biznews.com/thought-leaders/2019/08/23/response-gg-alcock-toby-chance">“shadow economy”</a>. They also bemoan the lack of taxes paid by informal sector operators. These criticisms are one such outcome of misrepresenting the size and shape of the informal sector. The vast majority of informal operators (73%) earn well below the <a href="https://www.sars.gov.za/TaxTypes/PIT/Pages/default.aspx">income tax threshold </a> of R79 000 per annum (about US$5 372) set by the South African Revenue Service. For example, the hourly earnings of the typical own-account worker in the informal sector are R18 (US$1.20) for men and R13 (US$0.88) for women. </p>
<p>In addition many informal sector workers – and particularly those in retail – pay VAT on their purchases. But unlike their counterparts in the formal sector they are not able to claim these amounts back from the tax authorities.</p>
<p>This is not to deny that some informal sector businesses are more successful and have the potential to create employment. The <a href="http://www.statssa.gov.za/publications/P0276/P02762013.pdf">Survey of Employed and the Self-employed data</a> suggests that these operators are largely men and working in transport and construction. It is also true that incentivising them to register and pay taxes would benefit the economy. However, the data suggest that this intervention would not be appropriate for the vast majority of own account operators in the informal sector. </p>
<p>We would argue that the informal sector is worth supporting because it is a large part of the workforce. Further, while earnings are often very low in the informal sector, this type of employment is particularly important in keeping households above <a href="https://www.econ3x3.org/article/job-informal-sector-reduces-poverty-about-much-job-formal-sector">the poverty line</a>. </p>
<p>But what kind of support should be given to the sector?</p>
<h2>Do no harm</h2>
<p>The critical first step is “do no harm” measures. Regulations, like municipal by-laws that often <a href="http://www.seri-sa.org/images/SERI_SALGA_Informal_Trade_Jurisprudence_WEB.pdf">criminalise work</a> in the informal sector, need to be reviewed. </p>
<p>If we are serious about supporting the informal sector, we should not assume that it will expand and grow on its own amidst contradictory, opaque and even hostile regulations and practices. </p>
<p>A key driver in punitive approaches is an attempt to regulate the activities of foreign migrants. Research on foreign migrants in the informal sector shows that, contrary to popular claims, they are <a href="https://africacheck.org/2015/04/17/analysis-are-foreigners-stealing-jobs-in-south-africa/">in the minority</a>. It outlines multiple <a href="http://samponline.org/">contributions</a> by immigrants to employment, rent, food security and the tax base.</p>
<p>The need for a conducive environment for informal sector activity applies to South Africans and immigrants alike, and the blunt instrument of harsh regulation damages livelihoods and denies consumers access to the goods and services informal operators provide. </p>
<p>Recent actions to tackle counterfeiting in inner city Johannesburg have gone way beyond this claimed intention, and prejudiced many traders not involved in selling counterfeits. These actions have effectively destroyed a hub of cross border trade, with <a href="https://drive.google.com/file/d/1tUa8PXswc4lkSTzA6uUAt7JH6rhb03o5/view">annual turnovers</a> twice that of <a href="https://sandtoncity.com/">Sandton City</a>, South Africa’s upmarket shopping centre. </p>
<p>In the face of state failure, immigrants are easy scapegoats. Targeted closures of immigrant businesses are not only a violation of <a href="http://www.saflii.org/za/cases/ZASCA/2014/143.pdf">immigrants’ rights</a> – but also fundamentally damages the economy. </p>
<h2>Support measures</h2>
<p>In addition to the frequent emphasis on access to financial services and training, research on the informal sector demonstrates that investing in the relevant infrastructure has an important and positive impact on the resilience and productivity of <a href="https://www.hsrcpress.ac.za/books/the-south-african-informal-sector-providing-jobs-reducing-poverty">informal workers</a>.</p>
<p>Those working in public spaces need access to basic infrastructure such as water and toilet facilities. They also need <a href="http://www.wiego.org/wiego/working-in-warwick-street-traders">access</a> to infrastructure to support their work: shelter, storage and sorting facilities. </p>
<p>Homes are the workplace of many informal workers. But too little attention is paid to this in approaches to the upgrading of informal settlements and low-cost housing developments. </p>
<p>And for women working in the informal sector, care responsibilities affect productivity and the ability to earn reliable income and accumulate assets. Far greater attention needs to be paid to affordable and accessible child care and assistance with other care responsibilities.</p>
<p>The informal and formal economies are interlinked in multiple ways. Detailed analyses of value chains could inform more sophisticated policy interventions. </p>
<p>That said, it is important not to romanticise working in the informal sector. <a href="http://www.redi3x3.org/sites/default/files/Rogan%20%26%20Skinner%202017%20REDI3x3%20Working%20Paper%2028%20Informal%20sector%20in%20SA%20-%20QLFS%20analysis.pdf">Our research</a> has shown that working conditions are often difficult with few protections against shocks. This points to the importance of tackling decent work and social protection deficits in the informal sector. </p>
<p>Putting aside the controversy around the numbers, it is worth supporting those working in the informal sector. However constructing a narrative that suggests a massive shadow economy not captured by the statistics is not helpful in tailoring policies which address the realities.</p><img src="https://counter.theconversation.com/content/122745/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mike Rogan is a research associate in the Urban Policies Programme of WIEGO (Women in Informal Employment: Globalizing and Organizing). </span></em></p><p class="fine-print"><em><span>Caroline Skinner is urban research director for the global research-policy-advocacy network Women in Informal Employment: Globalising and Organising (WIEGO).</span></em></p>The informal sector represents an opportunity to improve the lives of a large part of the workforce. Government should desist from harming livelihoods and broaden the scope of policy measures.Mike Rogan, Associate professor, Rhodes UniversityCaroline Skinner, Senior researcher at the African Centre for Cities, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1219532019-09-03T13:05:22Z2019-09-03T13:05:22ZHow potential of massive e-waste dump in Ghana can be harnessed<figure><img src="https://images.theconversation.com/files/289832/original/file-20190828-184202-13injzf.jpg?ixlib=rb-1.1.0&rect=0%2C44%2C960%2C580&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Separated display screens (TVs) at the site.</span> <span class="attribution"><span class="source">Alison Stowell</span></span></figcaption></figure><p>Agbogbloshie in Ghana is a vast urban area that houses a massive e-waste recycling dump. Situated on the banks of the Korle Lagoon alongside the Old Fadama slum, it is home to <a href="https://www.ban.org/news/2019/4/24/rotten-eggs-e-waste-from-europe-poisons-ghanas-food-chain">around 80 000 people</a>. Back in the <a href="https://www.atlasobscura.com/places/agbogbloshie">1960s as Ghana industrialised</a>, migrants flocked to Accra and settled in Old Fadama. Then, around the year 2000, ships started to come in with e-waste.</p>
<p>Today, many work at the “digital dumping ground”, sorting through technological products like washing machines, cookers, vehicles, cell phones and computers. These products have historically been sourced from higher income countries such as the US or those in Europe. But there has been a <a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/full/10.1111/geoj.12077">shift in where e-waste is sourced</a>: domestically Ghana now produces its own e-waste, with imports being mainly made up of reusable electronics. </p>
<p>Agbogbloshie often receives bad press – it’s even been nicknamed “<a href="http://www.welcome-to-sodom.com/">Sodom</a>” after the Biblical city destroyed by God for its residents’ sins. Workers burn cables covered in plastic so they can get at the valuable copper contained in many digital devices faster. This contributes to air, soil and water pollution. There are also <a href="https://www.who.int/ceh/risks/ewaste/en/">health risks</a> involved – workers can inhale toxic fumes, and nearby contaminate <a href="https://www.theguardian.com/global-development/2019/apr/24/rotten-chicken-eggs-e-waste-from-europe-poisons-ghana-food-chain-agbogbloshie-accra">food sources</a>.</p>
<p>But I saw a different side of Agbogbloshie when I visited it in 2018. As an academic who <a href="http://www.research.lancs.ac.uk/portal/en/people/alison-stowell(2878fcb4-b9d6-4201-9f2f-42e318815872).html">researches e-waste</a>, <a href="https://www.lancaster.ac.uk/pentland/research-areas/waste-and-the-circular-economy/">waste and the circular economy</a>, I was struck by the site’s thriving hierarchical ecosystem of entrepreneurial activity. Everything had its place. There were dedicated spaces for dismantling and handling different waste streams, repair and refurbishment activities and weighing scales. </p>
<p>There were also food shacks selling deep fried plantains, makeshift protective clothing (T-shirt masks), and forms of sanitation with toilets scattered around the place.</p>
<p>Agbogbloshie, and sites like it elsewhere in the developing world, provide a valuable service. They offer opportunities for job creation, profit and cleaning up environments littered with waste. These activities also give discarded goods a new lease of life, encouraging second-hand markets in electronic and electrical goods while recognising the skills associated with repair. </p>
<p>Worldwide we discard <a href="https://www.itu.int/en/ITU-D/Climate-Change/Documents/GEM%202017/Global-E-waste%20Monitor%202017%20.pdf">44.7 million metric tonnes</a> worth of electronics and electrical equipment. These devices contain materials that have a collective higher value than <a href="https://www.weforum.org/agenda/2019/01/how-a-circular-approach-can-turn-e-waste-into-a-golden-opportunity/">120 countries’ Gross Domestic Product</a> – in the region of Ghanaian cedis 333 billion or €55 billion. And, for every 1000 tonnes discarded, there is an opportunity to <a href="https://www.epa.ie/pubs/reports/research/waste/strive110-re-evaluate-re-useofelectricalandelectronicequipment.html">create 15 recycling jobs and 200 repair jobs</a>. </p>
<p>Three steps could be taken to harness the potential of Agbogbloshie and sites like it. </p>
<p>First, formal recognition by investors, the government and the private sector. This would help to ensure a boost in funding; improved, safer infrastructure and healthier worker conditions. Second, there must be a focus on how to manage the flow of materials to and from e-waste sites. This is in line with the requirements outlined by the <a href="http://www.basel.int/">Basel Convention</a>, which aims to control the movement of hazardous waste to protect human health and the environment. And third, the people working at similar sites could co-create new and relearn old practices. Knowledge sharing is key.</p>
<h2>Recognition</h2>
<p>Some of the workers at Agbogbloshie told me that they didn’t tell people outside the immediate area what they did for a living. This was because their work was considered dirty. A local expert, Karim Saagbul, from <a href="http://www.wiego.org/category/regions/sub-saharan-africa/ghana">Ghana WIEGO</a> – which works to empower informal workers, particularly women – confirmed the stigma attached to this work. The organisation supports informal waste workers at Agbogbloshie. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/290073/original/file-20190829-106486-5r05pb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/290073/original/file-20190829-106486-5r05pb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/290073/original/file-20190829-106486-5r05pb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/290073/original/file-20190829-106486-5r05pb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/290073/original/file-20190829-106486-5r05pb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/290073/original/file-20190829-106486-5r05pb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/290073/original/file-20190829-106486-5r05pb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A jumble of wires in a wheelbarrow. Plastic is burned off the wires to get at the valuable copper inside.</span>
<span class="attribution"><span class="source">Alison Stowell</span></span>
</figcaption>
</figure>
<p>There have been <a href="http://citifmonline.com/2018/03/waste-pickers-association-appeals-health-post/">some calls</a> for the work at Agbogbloshie to be recognised as legitimate and important for national development. This is crucial. Waste picking and repair work allows people to make a reasonable living, though they earn <a href="https://wageindicator.org/salary/living-wage/ghana-living-wage-series-january-2018">below the country’s average</a>: monthly <a href="https://www.mdpi.com/1660-4601/14/2/135/htm">salaries range from $70 to $140</a> for a scrap collector to $1050 for middlemen who act as the intermediaries between the dealers and recyclers, which in turn supports the country’s economy. </p>
<p>There are also economic benefits to expanding the life span of products that might otherwise stay on the junk heaps. This appears to make sense to the <a href="http://www.ghanaiantimes.com.gh/fisrt-part-of-agbogbloshie-e-waste-project-inaugurated/">German government</a>: it has funded new e-waste facilities at Agbogbloshie in an ongoing effort to offer training in safer recycling practices; a hospital; and a football pitch for entertainment. This initiative aims to support the development of a more sustainable and inclusive e-waste management system that brings together informal and formal groups operating within this space. </p>
<p>Securing a reliable source of e-waste and second-hand electricals is a <a href="https://www.rivisteweb.it/doi/10.3240/89695">challenge</a> both for developed and developing countries. </p>
<p>If you want to operate a refurbishment or recycling business, you need a supply of materials. If organisations engaged directly with the informal sector, they could be responsible suppliers of second-hand goods and secure valuable resources for their production processes. It is lucrative business as <a href="https://www.apnews.com/f9a0d071d1d646edb2b53fd22fd8548c">Ghana imports approximately 150 000 tonnes</a> of second-hand electrical and electronic goods a year. </p>
<p>Due to the hazardous chemicals contained within e-waste products such as lead, cadmium, mercury, amongst others, the flows are governed by <a href="http://www.basel.int/Implementation/Controllingtransboundarymovements/Overview/tabid/4325/Default.aspx">voluntary agreements</a> and <a href="https://news.weeelogic.com/africa-news-ghanas-e-waste-legal-framework">legislation</a>. These policies would need to be revisited to ensuring the transportation and handling of goods was done in an appropriate manner but did not inhibit the flow. </p>
<p>Confidence in <a href="https://www.iso.org/isoiec-27001-information-security.html">data security or destruction</a> would also need to be considered, especially for data baring technologies like mobile phones, tablets and laptops; nobody wants to be at risk of identify or data theft. Engagement on this level could encourage goods for reuse to actually be goods for reuse, rather than those <a href="https://allafrica.com/stories/201709300031.html">illegally traded or dumped</a>. </p>
<h2>Knowledge transfer</h2>
<p>Finally, knowledge transfer is vital to develop inclusive, creative and safer practices. </p>
<p>Even with mature infrastructures, globally <a href="https://www.un.org/sustainabledevelopment/blog/2015/05/un-environment-chief-warns-of-tsunami-of-e-waste-at-conference-on-chemical-treaties/">1 million people die of occupational poisoning</a> caused by chemicals in their bodies. That number is just the registered employees, the figure may be higher if the waste pickers and informal workers were to be included. So, working with established organisations, there is an opportunity to share safer practices. </p>
<p>Collaboration presents an opportunity to co-create new practices, or share and re-learn those that already exist. The youth-driven <a href="https://qamp.net/">Agbobloshie Makerspace Place Project</a> presents exciting opportunities for exactly this. It offers community makerspaces to educate, produce tools, design products and a digital platform to encourage the repair, recycling and new trades. The kiosks are put together by hand and welcome all.</p><img src="https://counter.theconversation.com/content/121953/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alison Stowell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Sites like Agbogbloshie provides a valuable service. They offer opportunities for job creation, profit and cleaning up environments littered with waste.Alison Stowell, Lecturer at Lancaster University Management School, and Associate Director of the Pentland Centre for Sustainability in Business Research Centre., Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1180932019-07-16T11:21:40Z2019-07-16T11:21:40ZWhen migrants go home, they bring back money, skills and ideas that can change a country<figure><img src="https://images.theconversation.com/files/284126/original/file-20190715-173355-f32jhk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Between 1990 to 2015, nearly half of all migrants worldwide went back to their country of birth, whether by choice or by force.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/376411762?src=TlTS6yMNp_oevIHbyu0gTg-1-4&studio=1&size=vector_eps">Shutterstock</a></span></figcaption></figure><p>Escaping violence, war, poverty and environmental disaster, more people than ever are <a href="http://www.worldbank.org/en/news/press-release/2015/12/18/international-migrants-and-remittances-continue-to-grow-as-people-search-for-better-opportunities-new-report-finds">migrating worldwide</a>. Some <a href="https://www.iom.int/global-migration-trends">258 million people</a> – 3.4% of the global population – live outside their country of birth. </p>
<p>In 1970, <a href="https://publications.iom.int/system/files/pdf/wmr_2018_en.pdf">about 2% of the world’s 3.7 billion people</a> lived abroad. Historically, those immigrants would have settled where they landed, raised families and joined a new society. </p>
<p>Today, however, more migrants are <a href="https://www.pnas.org/content/116/1/116">returning home</a>, whether by choice or by force. Between 1990 to 2015, nearly half of all migrants worldwide <a href="https://www.pnas.org/content/116/1/116">went back to their country of birth</a>. </p>
<p>Migrants come home different than when they left, studies show. They are <a href="http://www.redalyc.org/pdf/171/17122051006.pdf">wealthier</a>, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5353851/">multilingual</a> and <a href="https://econpapers.repec.org/article/eeedeveco/v_3a95_3ay_3a2011_3ai_3a1_3ap_3a58-67.htm">more educated</a> than most in their local community. Migrants also have more <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-9442.00158">work experience</a> than people who have never lived abroad, as well as <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5353851/">bigger social networks and novel technical abilities</a> acquired in foreign schools and jobs.</p>
<p>As a result, their homecomings are a kind of “brain gain” that benefit not just a migrant’s family but also the community – even their country.</p>
<h2>Agents of change</h2>
<p>After lengthy stays in Western European and North America, for example, migrants from Mali have been shown to bring back <a href="https://econpapers.repec.org/article/eeejcecon/v_3a42_3ay_3a2014_3ai_3a3_3ap_3a630-651.htm">democratic political norms</a> that contribute to higher electoral participation. They also demand more integrity from government officials, which encourages political accountability. </p>
<p>Researchers in Cape Verde have documented similar <a href="https://elibrary.worldbank.org/doi/abs/10.1093/wber/lhr009">improvements in political accountability and transparency</a> in communities with relatively more return migrants. </p>
<p>Migration doesn’t always engender positive changes. Filipinos returning from stints in the Middle East, for example, <a href="https://brill.com/view/journals/ejea/8/2/article-p245_6.xml?lang=en">are frequently less supportive of democracy when they get home</a>. And the <a href="https://theconversation.com/ms-13-is-a-street-gang-not-a-drug-cartel-and-the-difference-matters-92702">Los Angeles street gang MS-13</a> took root in Central America <a href="https://theconversation.com/central-american-gangs-like-ms-13-were-born-out-of-failed-anti-crime-policies-76554">after the U.S. deported hundreds of its members</a> to El Salvador in the early 2000s.</p>
<p>Along with economists José Bucheli and Matías Fontenla, I have studied the impact of return migration on Mexico. Today, <a href="https://theconversation.com/more-mexicans-are-leaving-the-us-than-coming-across-the-border-51296">more Mexicans are leaving the U.S. than going to it</a>.</p>
<p>Our research builds on a <a href="http://www.redalyc.org/pdf/171/17122051006.pdf">2011 study</a> that Mexican households with at one least return migrant reported higher access to disposable income and funds for investment, as well as better access to clean water, dependable electricity, better-quality housing and education.</p>
<p>With data analysis and in-person interviews in Guanajuato state, we determined that migrants returning to Mexico actually improve <a href="http://www.benjaminjameswaddell.com/wp-content/uploads/2011/09/Waddell-The-Mexican-Dream.pdf">living conditions for many others in their communities</a>, too. Return migrants tap into the <a href="https://www.sciencedirect.com/topics/social-sciences/return-migration">new skills</a> they’ve acquired abroad – like fluent English – to <a href="https://usmex-today-podcast.simplecast.com/episodes/return-migration-and-economic-developme-e9TXQGtc">promote local economic development</a>, creating jobs, increasing wealth and demanding more government accountability. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/284120/original/file-20190715-173342-1ozlayc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Many call centers in Latin America, like the Firstkontact Center in Tijuana, employ U.S. deportees who can provide English-language customer service for American companies, Aug. 13, 2014.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Mexico-Dialing-Deportees/50f0fe4b80cd4562ace0c536c1eed1d8/11/0">AP Photo/Alex Cossio</a></span>
</figcaption>
</figure>
<p>One return migrant I met in 2011 said he tried to run his tortilla stand “like my bosses ran their businesses back in the U.S.” </p>
<p>“I open every day at the same time, I pay attention to quality control and I always make the customer my priority,” he said.</p>
<p>Several other Mexicans who’d lived in the U.S. told me they now expected more of public officials. They expressed disgust, for example, at the <a href="https://www.ganintegrity.com/portal/country-profiles/mexico/">corruption of the Mexican police</a>, who can be bribed out of ticketing drivers.</p>
<p>“I’ve seen how things can work differently and I’m now determined to contribute to a better Mexico,” one man told me.</p>
<p>The presence of return migrants actually <a href="https://www.sciencedirect.com/science/article/abs/pii/S0305750X18304443">reduces the likelihood of violence</a> in Mexico, our research shows. There, when migrants come home, they inject their hometowns with <a href="https://www.nytimes.com/2017/09/30/world/americas/mexico-inequality-violence-security.html">much-needed social and human capital</a>. That creates a kind of local revival that leads crime to drop.</p>
<h2>Juan Aguilar: The entrepreneurial deportee</h2>
<p>The next phase of my research on return migration is focused on Nicaragua. </p>
<p>Between the Somoza dictatorship of the 1970s, the revolution that ousted his regime, the civil war of the 1980s and, most recently, the <a href="https://theconversation.com/nicaragua-protests-threaten-an-authoritarian-regime-that-looked-like-it-might-never-fall-95776">political strife of Daniel Ortega’s presidency</a>, waves of people from all social classes have <a href="https://theconversation.com/bloody-uprising-in-nicaragua-could-trigger-the-next-central-american-refugee-crisis-99924">fled Nicaragua</a> in recent decades. </p>
<p>I have interviewed more than 70 Nicaraguans who’ve since returned home. Their personal stories are varied, but they share a common denominator: Drawing on their experiences abroad, they are changing Nicaragua.</p>
<p>“I grew up in LA. And now I live here, in a country I never knew,” Juan Aguilar, an imposing man with a fading teardrop tattoo near his left eye and the letters “L.A.” inked under his baseball cap, told me in unaccented English. </p>
<p>Aguilar was carried into the U.S. on foot by his mom at the age of 2. In 2010, he was deported for dealing drugs and gang activity. </p>
<p>“I was devastated at first. I wanted to go back,” he said over cappuccino at Managua’s Casa del Café in March 2018. “But I’m happy here now. I wouldn’t go back even if I had the chance.”</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/284152/original/file-20190715-173329-1jokke0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/284152/original/file-20190715-173329-1jokke0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=612&fit=crop&dpr=1 600w, https://images.theconversation.com/files/284152/original/file-20190715-173329-1jokke0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=612&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/284152/original/file-20190715-173329-1jokke0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=612&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/284152/original/file-20190715-173329-1jokke0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=769&fit=crop&dpr=1 754w, https://images.theconversation.com/files/284152/original/file-20190715-173329-1jokke0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=769&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/284152/original/file-20190715-173329-1jokke0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=769&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Juan Aguilar in Managua, shortly after being deported.</span>
<span class="attribution"><span class="source">Juan Aguilar</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Juan and his partner, Sarah, own five call centers in Managua that provide customer service for U.S. health care providers, student loan companies and other lucrative businesses. </p>
<p>The call centers employ more than 100 people, more than half of whom are U.S. deportees who speak English, the most <a href="https://www.weforum.org/agenda/2015/10/which-languages-are-most-widely-spoken/">widely spoken language in the world</a>.</p>
<p>“We try to give people the benefit of the doubt,” he said of their brushes with the law. </p>
<p>Even doctors work at Juan and Sarah’s call centers. There, they can make up to US$1,000 a month – twice what <a href="https://www.laprensa.com.ni/2010/01/29/nacionales/14629-maestros-y-medicos-en-alianza-por-salario">they’d make in Nicaragua’s crumbling public hospitals</a>. </p>
<p>I asked Juan what explained his seemingly unlikely success story as an entrepreneur.</p>
<p>“English,” he said. “And the fact that I know how to run a business. Those are things I learned in the States.”</p>
<h2>Piero Bergman, the CEO</h2>
<p>Piero Bergman and his family left <a href="https://www.bbc.co.uk/news/world-latin-america-19735631">civil war in Nicaragua</a> during the 1980s for Boca Raton, Florida. As upper-class Nicaraguans, they arrived to the United States with visas in hand.</p>
<p>When Bergman returned to Nicaragua in the late 1990s after decades in the telecommunications industry, he came back with a business idea: cyber cafes.</p>
<p>“I was traveling a lot, 60-something countries a year,” he told me. “I used to go to internet cafes frequently, particularly in Argentina.” </p>
<p>In Buenos Aires, internet cafes dotted the streets. Managua, Bergman’s hometown, had none.</p>
<p>Bergman launched a chain of cybercafes in Managua, bringing publicly accessible internet to the Central American country.</p>
<p>“The thing took off, and we put them up nationwide,” he said. Eventually, Bergman’s company was providing IP services to over 1,500 internet cafes across the country. </p>
<p>After in-home internet undercut Piero’s businesses, he shifted his focus to digital security. Today, Piero is the <a href="https://www.linkedin.com/in/piero-bergman-78b78790">president of Intelligent Solutions</a>, a Nicaraguan electronic security company with more than 100 employees. </p>
<p>Bergman attributes his success to the time he spent living and traveling abroad. </p>
<p>“I came down here with a different mindset and ideas about how to do things,” he said.</p>
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<p class="fine-print"><em><span>Benjamin Waddell does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Deportees and other migrants return home wealthier, more educated and with more work experience than people who never left. This ‘brain gain’ benefits the whole community, financially and politically.Benjamin Waddell, Associate Professor of Sociology, Fort Lewis CollegeLicensed as Creative Commons – attribution, no derivatives.