tag:theconversation.com,2011:/es/topics/unemployment-608/articlesUnemployment – The Conversation2024-03-24T08:50:02Ztag:theconversation.com,2011:article/2255822024-03-24T08:50:02Z2024-03-24T08:50:02ZWhy do identical informal businesses set up side by side? It’s a survival tactic – Kenya study<p>The population on the African continent will have <a href="https://www.un.org/en/global-issues/population">nearly doubled</a> by 2050, according to UN projections. About <a href="https://www.mckinsey.com/mgi/our-research/reimagining-economic-growth-in-africa-turning-diversity-into-opportunity">800 million</a> more young Africans will enter the job market by then. Combine this forecast with the <a href="https://ilostat.ilo.org/african-youth-face-pressing-challenges-in-the-transition-from-school-to-work/#:%7E:text=True%2C%20nearly%2013%20million%20young,for%20and%2For%20obtaining%20jobs.">high youth unemployment rate</a> in many African countries today, then the pressing question is: who will create stable jobs at mass scale?</p>
<p>Many policies to create new employment at scale focus on solution templates that have worked elsewhere, often outside Africa. These include enabling entrepreneurship to create high-growth start-up ventures, bringing in technological advances to potentially unlock new industries, or the establishment of outsourcing hubs for low-cost labour.</p>
<p>Few policies directly support homegrown solutions that already have a track record of creating large-scale stable employment.</p>
<p>Together with my coauthors, I looked for answers in a seemingly unlikely place. <a href="https://pubsonline.informs.org/doi/10.1287/orsc.2023.17644">We studied</a> how car repair businesses were organised. Specifically, we studied the neighbourhood of Dagoretti Corner in Nairobi, Kenya. </p>
<p>Here, 105 largely identical car repair businesses set up shop close to one another. Imagine corrugated iron sheets as fences to demarcate businesses which offer exactly the same service in the same location. </p>
<p>This phenomenon <a href="https://www.africanbookscollective.com/books/african-markets-and-the-2028utu-buntu-business-model">is common</a> in major African cities. Thousands of different traders – from fruit sellers to furniture makers – set up next door to each other and co-locate. This doesn’t make sense as a competitive strategy, so why do it?</p>
<p>We found that these businesses do this in part because it generates an informal welfare system. In our study, the car repair businesses mutually supported each other in a variety of ways to ensure they survived and thrived. </p>
<p>Our findings make a case that policymakers should focus on supporting these informal welfare systems. They abound in urban areas and create employment at scale. Yet, policies tend to support individuals, as opposed to groups, in informal economies. This could risk eroding these welfare systems, putting livelihoods at risk.</p>
<h2>Informal welfare system</h2>
<p>Over the past two decades, car repair businesses in Dagoretti Corner grew from 11 to 105 identical businesses. As the satellite images in the video below show (car repair businesses shaded in yellow), they have massively expanded and are now fully integrated into the urban infrastructure. </p>
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<p>The agglomeration of businesses in this way is often seen as a sign of failed economic and urban development policy by industry analysts, development practitioners and policy makers. They tend to believe that agglomerated businesses should reach higher levels of efficiency, competitiveness, specialisation and innovation. </p>
<p>Yet, many businesses continue to operate the same way they did a decade ago with little change or upgrading. What benefit are these businesses reaping?</p>
<p>Through our fieldwork in Dagoretti Corner, visiting car repair businesses and conducting interviews with 45 owners, we identified five ways in which business owners create their own welfare system: </p>
<p>First, they save and invest money together. This is often done in small scale, informal rotating savings and investment associations. In Kenya these are known as chamas and Savings and Credit Cooperative Organisations (Saccos) and are akin to credit unions and cooperatives. Saving money together enables owners to get a loan and enables business owners to make investments together. Rather than being competitors, businesses are interdependent and trust each other to grow together.</p>
<p>Second, businesses offer apprenticeship opportunities, enabling the youth from rural Kenya to get trained and equipping them with the knowledge and resources to start their own car repair businesses. Through apprenticeships, mechanics become familiar with the welfare system and continue its upkeep into the future.</p>
<p>Third, trust is fragile and business owners come up with ways to self-police against free riding and theft. They address competitive behaviour through self-organised committees. Poaching customers from a peer business is seen as theft and is policed. Repeated shoddy repair work and alcohol abuse among mechanics is also policed. Particularly exploitative customers are blacklisted. After all, the owners want to make sure that customers perceive Dagoretti Corner as a safe place for customers to entrust their valuable cars.</p>
<p>Fourth, businesses support each other in times of crisis when nearing bankruptcy to ensure survival. Chamas and Saccos make emergency money available to smooth over gaps. Businesses temporarily loan out their employees to other businesses to ease the financial burden of paying a wage. And businesses sub-contract repair work to distressed businesses, ensuring at least some cash flow until business picks up again.</p>
<p>Fifth, in times of personal crises when livelihoods are at stake, due to high medical bills or funeral costs, peer businesses step in and provide a type of insurance policy. Owners, employees and apprentices collectively contribute funds to support those in dire need and prevent them from slipping into destitution. This informal insurance scheme even extends to family members.</p>
<p>This informal social welfare system is critical because it provides stable employment, saving and investment opportunities and insurance at considerable scale. </p>
<p>Policies that support the growth of individual entrepreneurs in these areas – such as through training and cash infusions geared towards business differentiation – are likely to introduce competitive behaviours among identical businesses. This risks the collapse of welfare systems and thus also employment at scale.</p>
<h2>Policies must strengthen informal welfare systems</h2>
<p>We concluded from our research that policies need to further enable, strengthen and then leverage the existing welfare systems of co-locating businesses to engender firm and employment growth. These are strongholds of cooperative behaviour that need to be protected rather than transformed or displaced. </p>
<p>One way this can be done is through the creation of transparent cooperative structures and exit pathways for individual businesses to grow. This would strengthen the welfare system and needs to be the starting point of policy discussions. </p>
<p>For example, targeted governance interventions could make chamas and Saccos more robust to safeguard them against fraud and enhance their self-organising capacity. Digital technologies can play a role here to bring these saving and investment schemes into the modern age. Once made robust, cash infusions by the government to support firms in the informal economy can then happen through these rather than through separate, government-run entities. </p>
<p>We do not rule out the potential for policy interventions seeking to support individual firms. Yet, these need to be context-sensitive so that they can enable businesses to scale without eroding the social order. </p>
<p>This is just a starting point. In light of the pressing challenge to bring about labour-intensive growth in African societies, it is paramount to not only focus on importing solutions from elsewhere but to be intentional about enabling and supporting homegrown solutions that already work.</p><img src="https://counter.theconversation.com/content/225582/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Weiss 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>Identical informal businesses set up next to each other because they’ve created an informal welfare system.Tim Weiss, Assistant Professor, Department of Management and Entrepreneurship, Imperial College LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2220922024-02-29T17:37:32Z2024-02-29T17:37:32ZIndians are fleeing their growing economy to work abroad – even in conflict zones. Here’s how to create more jobs at home<figure><img src="https://images.theconversation.com/files/576217/original/file-20240216-18-l70jpr.jpg?ixlib=rb-1.1.0&rect=0%2C59%2C7951%2C5237&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/people-workers-standing-line-outside-construction-728813566">Rahul Ramachandram/Shutterstock</a></span></figcaption></figure><p>Israel <a href="https://www.bbc.co.uk/news/world-asia-india-68027582">plans</a> to bring in 70,000 workers from abroad, including 10,000 from India, to boost its construction sector. A labour shortage has emerged after 80,000 Palestinian workers were barred from entering the country after the October 7 Hamas-led attacks.</p>
<p>Figures suggest that India is one of the <a href="https://www.spglobal.com/marketintelligence/en/mi/research-analysis/india-seizes-crown-of-fastest-growing-g20-economy-dec23.html">fastest-growing</a> economies in the world. Between July and September of 2023, it grew at a pace of 7.6%. If it continues along this current growth trajectory, India will become the world’s <a href="https://www.forbes.com/sites/benjaminlaker/2024/02/23/india-to-become-third-largest-economy-by-2027-implications-for-leaders/">third-largest</a> economy by 2027.</p>
<p>The fact that thousands of Indian workers are nonetheless queuing up to secure a job in a conflict zone abroad is a consequence of a jobs crisis at home. Despite the country’s apparent economic growth, many Indians – even those with a university degree – are struggling to secure stable employment.</p>
<p>Casual work makes up <a href="https://eastasiaforum.org/2023/04/10/indias-workforce-woes/#:%7E:text=About%2052%20per%20cent%20of,cent%20are%20regular%20salaried%20workers.">25% of the workforce</a>, while only 23% of workers are paid a regular salary. The remainder are self-employed, and quite vulnerable to irregular and insecure income too.</p>
<p>But India has a large working-age population (people between 15 and 64 years of age), so the demand for jobs is immense. India needs to create an <a href="https://eastasiaforum.org/2023/04/10/indias-workforce-woes/">estimated</a> 10 million to 12 million jobs each year for the unemployed, new workforce entrants, and surplus agricultural workers to be able to secure non-farm work.</p>
<p>How can India provide jobs for its increasingly educated young? It needs even faster economic growth and for this growth to be labour intensive. This will, in turn, generate demand in the economy from all sections of society (not just the middle class and above).</p>
<h2>Structural change</h2>
<p>Between 2004 and 2014, India’s economy grew at a rate of <a href="https://thewire.in/economy/modi-claims-india-saw-a-lost-decade-between-2004-and-14-is-that-true">nearly 8% per year</a> (despite the global financial crisis in 2008). This rapid growth was accompanied by a hastening of structural change in employment.</p>
<p>During that period, the economy created on average <a href="https://ideas.repec.org/a/spr/ijlaec/v64y2021i2d10.1007_s41027-021-00317-x.html">7.5 million</a> new non-farm jobs every year. The number of manufacturing jobs in India rose from 53 million in 2004 to 60 million by 2012.</p>
<p>However, ₹500 (£4.78) and ₹1000 (£9.56) notes were <a href="https://www.aeaweb.org/articles?id=10.1257/jep.34.1.55">taken out of circulation</a> in 2016, making 86% of India’s currency illegal. The cash recall was intended to accelerate the country’s transition towards a formal economy. But it led to acute shortages of cash, destroying jobs in the construction and manufacturing sectors.</p>
<p>Growth slowed to 2020 when, at the beginning of the COVID pandemic, the Indian government imposed a nationwide lockdown at <a href="https://www.bbc.co.uk/news/world-asia-india-52081396">four hours’ notice</a>. The lockdown caused India’s gross domestic product (GDP) to <a href="https://www.indiabudget.gov.in/economicsurvey/">contract by 5.8%</a> – more than twice the rate at which the global economy shrank.</p>
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<img alt="Six Indian police officers wearing masks and standing on a city street." src="https://images.theconversation.com/files/576586/original/file-20240219-22-2qhktj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/576586/original/file-20240219-22-2qhktj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576586/original/file-20240219-22-2qhktj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576586/original/file-20240219-22-2qhktj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576586/original/file-20240219-22-2qhktj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576586/original/file-20240219-22-2qhktj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576586/original/file-20240219-22-2qhktj.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">
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<span class="caption">Police in Gujarat, India, enforcing the COVID lockdown.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bharuch-gujarat-india-april-05-2020-1702650391">Kunal Mahto/Shutterstock</a></span>
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<p>Employment in manufacturing jobs fell again, especially in labour-intensive manufacturing where employment had already been in decline for five years following the botched implementation of demonetisation. Around <a href="https://thewire.in/economy/what-we-know-about-indias-post-covid-economy-recovery-and-rising-inequality">60 million workers</a> returned to jobs in agriculture, reversing the structural change in employment that had been underway for 15 years.</p>
<p>To take advantage of its bulging working-age population, India needs to create more non-farm jobs. In his new book, “Breaking the Mould”, the former governor of the Reserve Bank of India, Raghuram Rajan, <a href="https://www.penguin.co.in/book/breaking-the-mould/">says</a> that India needs to focus on exports of services, drawing on the country’s new digital infrastructure and IT-based services growth for the domestic (and export) market.</p>
<p>But a focus on services alone will not suffice. This “New India” economy currently constitutes <a href="https://indianexpress.com/article/opinion/columns/indian-economy-gdp-growth-capex-global-market-share-digital-public-infrastructure-9073549/">less than 15%</a> of the country’s economy and a fraction of that in employment. Such a strategy will generate jobs mainly for highly skilled people, rather than the millions of Indian workers that are searching for non-farm jobs.</p>
<p>What India needs is a <a href="https://www.eastasiaforum.org/2022/02/03/make-in-india-a-work-in-progress/">manufacturing strategy</a> akin to China’s that focuses on labour-intensive manufacturing. China has pursued an industrial policy since the 1950s, which has become even more evolved since the 1980s, helping the country establish dominance in global high-tech manufacturing.</p>
<h2>Creating jobs in India</h2>
<p>In India, the demand for jobs will only be met if several different factors come together. Construction activity needs to continue at its current brisk pace. But, for the next year or two, it must be led by public sector investment as private investment remains sluggish. </p>
<p>India’s investment-to-GDP ratio is <a href="https://www.indiabudget.gov.in/economicsurvey/">still below 30%</a>, and has remained below the 31% inherited by the current government when it came to power ten years ago. The potential for a twofold increase in construction employment (a trend that was observed between 2004 and 2012) over the next five years hinges on the revival of private investment.</p>
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<img alt="A group of workers in hi-vis jackets at a construction site." src="https://images.theconversation.com/files/576587/original/file-20240219-28-phmg80.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/576587/original/file-20240219-28-phmg80.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576587/original/file-20240219-28-phmg80.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576587/original/file-20240219-28-phmg80.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576587/original/file-20240219-28-phmg80.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576587/original/file-20240219-28-phmg80.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576587/original/file-20240219-28-phmg80.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&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">Labour workers building an overhead metro in Bangalore, India.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bangalore-karnataka-india-january-21-2014-282302282">PI/Shutterstock</a></span>
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<p>Labour-intensive manufacturing by micro, small and medium enterprises also needs a sustained fillip. The government’s focus is currently on large companies – so-called “national champions” like industrial conglomerates Tata and Mahindra – which are being encouraged through <a href="https://thewire.in/political-economy/why-the-modi-government-policy-of-national-champions-is-unravelling">subsidies</a>.</p>
<p>If these subsidies were instead redirected towards smaller enterprises, they might do more for employment generation. Large corporations <a href="https://www.cambridge.org/core/books/planning-in-the-20th-century-and-beyond/817DA53ABC693583B3E3D052CA5B2CE5#fndtn-information">typically</a> use highly capital-intensive methods of production, whereas smaller ones tend to absorb more labour. Historically, it is the latter that has generated <a href="https://archive.org/details/developmentwithh0000unse/mode/2up">most</a> of the non-farm jobs in developing countries.</p>
<p>The third area where employment can be generated is, indeed, services. Public expenditure should prioritise public health, education, vocational training and universities.</p>
<p>These sectors are labour-intensive, contribute to the creation of public goods, and will build the human capital needed by both manufacturing and modern export-oriented services. That is the only way India’s health and education services can reach the <a href="https://www.adb.org/sites/default/files/publication/385696/hcd-sa.pdf">levels observed</a> in east Asia and attract more foreign investment.</p>
<p>A renewed focus on smaller enterprises across these sectors is needed. Inclusive growth requires providing jobs rapidly at the bottom of the pyramid, not only at the top of the wage – and skill – distribution.</p><img src="https://counter.theconversation.com/content/222092/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Santosh Mehrotra 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>India needs to follow a path akin to China’s to find answers to its job woes.Santosh Mehrotra, Visiting Professor at the Centre for Development Studies, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2222332024-02-21T13:24:18Z2024-02-21T13:24:18ZYoung people are lukewarm about Biden – and giving them more information doesn’t move the needle much<figure><img src="https://images.theconversation.com/files/576872/original/file-20240220-16-qvln0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Young voters in Ann Arbor, Mich., fill out applications to cast their ballot in the midterm elections in November 2022. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/zachary-rose-fills-out-an-application-to-cast-his-ballot-news-photo/1244584443?adppopup=true">Jeff Kowalsky/AFP via Getty Images</a></span></figcaption></figure><p>Recent polling for the November 2024 election shows that President Joe Biden is struggling with young voters, who have traditionally supported Democrats. </p>
<p>A <a href="https://www.nytimes.com/interactive/2023/12/19/us/elections/times-siena-poll-registered-voter-crosstabs.html">December 2023 poll</a> showed that 49% of young people supported former President Donald Trump, while just 43% of 18- to 29-year-olds said they preferred Biden. </p>
<p>Biden is even struggling with young people who identify as Democrats. A <a href="https://iop.harvard.edu/youth-poll/46th-edition-fall-2023">Fall 2023 Harvard Kennedy School</a> poll shows that just 62% of Democrats aged 18 to 29 years old said they would vote for Biden in 2024. </p>
<p>Many Democrats are <a href="https://thehill.com/homenews/campaign/4138154-democrats-worry-young-people-souring-on-party/">increasingly anxious</a> that young voters who <a href="https://www.cnn.com/election/2020/exit-polls/president/national-results">supported Biden in 2020</a> will boycott the general election in 2024, support a third-party candidate or <a href="https://www.vox.com/politics/24034416/young-voters-biden-trump-gen-z-polling-israel-gaza-economy-2024-election">vote for Trump</a>. </p>
<p>Polls this far from Election Day are <a href="https://gking.harvard.edu/files/abs/variable-abs.shtml">notoriously variable</a> and not reliable for predicting election results. Furthermore, some political pundits are asking whether young voters <a href="https://www.nytimes.com/2023/11/27/upshot/poll-biden-young-voters.html">will return to the Biden coalition</a> once the campaign season heats up and they learn more about the two candidates. </p>
<p>As scholars of <a href="https://neilobrian.com">public opinion</a> and the <a href="https://scholar.google.com/citations?user=J4Vp11wAAAAJ&hl=en&oi=sra">U.S. presidency</a>, we are deeply interested in the prospect of young voters, particularly Democrats, defecting from the Biden coalition. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A young, white woman with brown hair wearing shorts and a beige cardigan walks past a bulletin board with flyers on it for vioting." src="https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576870/original/file-20240220-28-6gi2uw.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>
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<span class="caption">An Emory University student in Atlanta walks past voting information in October 2022.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/young-woman-walks-past-voting-information-flyers-on-the-news-photo/1244204334?adppopup=true">Elijah Nouvelage/AFP via Getty Images</a></span>
</figcaption>
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<h2>Mixed evidence on young voters’ support for Biden</h2>
<p>About <a href="https://www.pewresearch.org/politics/2015/04/07/a-deep-dive-into-party-affiliation/">51% of young voters</a>, aged 18 to 29 years old, identify as Democrats. This compares with 35% of these voters who identify as Republicans. In 2020, young voters in this age group made up an <a href="https://circle.tufts.edu/latest-research/election-week-2020#when-and-how-young-people-voted">estimated 17%</a> of the electorate. </p>
<p>In a close election, securing the youth vote will be paramount in order for Biden to win reelection.</p>
<p>We wanted to understand how young voters might change their election pick preferences if they learn more about different topics, such as the economy, likely to feature in this election season. </p>
<p>We recruited 1,418 respondents from across the country to participate in an online survey experiment in December 2023, including 860 people who identify as Democrats.</p>
<p>In this experiment, we exposed respondents to different messages that the Biden campaign might employ, to see if young Democrats could be persuaded back to Biden.</p>
<p>A quarter of the respondents saw information about how <a href="https://apnews.com/article/biden-inflation-reduction-climate-anniversary-9950f7e814ac71e89eee3f452ab17f71">inflation and</a> <a href="https://apnews.com/article/biden-unemployment-jobs-inflation-interest-rates-b1c21252024d697765d047a60f41e900">unemployment decreased</a> during the Biden administration. </p>
<p>Another quarter of respondents were given information about Trump’s norm-violating behavior, such as <a href="https://www.reuters.com/legal/government/us-capitol-riot-probe-turns-focus-trump-allies-extremist-groups-2022-07-12/">encouraging an insurrection</a> at the U.S. Capitol building on Jan. 6, 2021.</p>
<p>The next quarter of respondents were given information about Biden’s and Trump’s positions on abortion, and whether the U.S. should accept immigrants from the Gaza Strip. </p>
<p>The final group of respondents received no information about a particular topic.</p>
<p>In our research, which has yet to be published, we found mixed evidence that undecided young Democrats would be persuaded to vote for Biden based on any new information we shared with them. </p>
<p>Among the people we polled who were given no information, 66% of 18-year-old to 34-year-old Democrats said they would vote for Biden. This roughly tracks with national polling. </p>
<p>Would learning about the strength of the economy boost Biden’s support? </p>
<p>About 69% of young Democrats who read about dropping inflation and unemployment rates said they would vote for Biden, compared with 31% who said they would vote for Trump or another candidate. This reflects a modest increase in support for Biden, compared to people who had no information on this topic. </p>
<p>We then tested whether providing information to voters about the candidates’ policy positions would change support for Biden. </p>
<p>It is possible that voters are just unaware of the candidates’ positions on issues <a href="https://www.nytimes.com/2023/11/16/upshot/kamala-harris-biden-voters-polls.html?action=click&module=RelatedLinks&pgtype=Article">and, after getting more information</a>, will change their views. </p>
<p>We found that 71% of respondents who learned about Biden’s and Trump’s policy positions on abortion and Palestinian refugees from Gaza said they would vote for Biden, compared with the 66% who did not read any new information on these topics before deciding their pick. </p>
<p>Finally, we gave people information about Trump’s norm-violating behavior. This actually marginally decreased support for Biden, dropping from the 66% among people who did not have any of this information given to them in the survey to 63% among people who did. This change, though, lacked what social scientists call statistical significance – meaning that we cannot say this difference is not just attributable to chance alone. </p>
<p>Overall, we found that giving young Democrats access to three different pieces of information generally led to small increases in whether they said they would vote for Biden or not. </p>
<p>Next, we asked respondents “How enthusiastic would you say you are about voting for president in next year’s election?” and how likely they are to vote in the upcoming presidential election. We found that the three different pieces of information each led to a small increase in reported vote intention among young Democrats, but didn’t, on average, increase their enthusiasm about voting. In other words, if young voters feel compelled to vote, they may do so, but without enthusiasm.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Young people sit around a table, and two young people, both wearing white T-shirts, stand near a screen that says 'Canvass training'" src="https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/576873/original/file-20240220-20-e11nih.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">Abortion rights canvassers gather for a canvass training in Columbus, Ohio, in November 2023.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/pro-choice-canvassers-gather-for-a-canvass-training-meeting-news-photo/1766360809?adppopup=true">Megan Jelinger/AFP via Getty Images</a></span>
</figcaption>
</figure>
<h2>The power of persuasion</h2>
<p>Taken together, these results show little movement among young Democrats. This is particularly striking when compared to older Democrats in our sample. </p>
<p>When presented with information about the strength of the economy, the candidates’ divergent policy positions or Trump’s norm-violating behavior, support for Biden among likely voters who were 55 years old or older and identified as Democrats increased from 73% to around 90%.</p>
<p>These results suggest an uphill battle for the Biden campaign to bring back young voters. Young voters, even if they identify as Democrats, are perhaps less attached to a party, or democratic institutions more generally, <a href="https://www.washingtonpost.com/opinions/2023/12/18/democracy-young-people-voters-trump/">than older voters</a>. This means campaign messages about democratic norms might be less persuasive among younger voters. </p>
<p>On the other hand, there are reasons to expect young voters might return to Biden: The economy is doing well, which <a href="https://news.northeastern.edu/2023/11/06/presidential-election-predictions-polls/">tends to help incumbents</a>. </p>
<p>Furthermore, partisanship, particularly in this polarizing environment, remains a powerful influence, and may still exert a pull on young Democrats over the campaign.</p>
<p>Democrats, after all, successfully ran on an anti-Trump campaign in the <a href="https://www.pewresearch.org/politics/2023/07/12/voter-turnout-2018-2022/">2022 midterm elections</a>, <a href="https://morningconsult.com/exit-polling-live-updates/?mkt_tok=eyJpIjoiTTJGbU9EZ3dNalZtTURZMiIsInQiOiJTOTZTRHBrN0lNWG9IVisxUXhEdUdtcUxYaENlS2tIYlJ1YTZyTzhkNjBQM2o0dWVwZlVad3lxaTk1N0FtelwvMkJDOTdsYWtmVDU5eVVDQjhjcjJLUDBocGFaWjRRalVaXC9paTE1dGhzSmxrYWtjUnlXWEk2cVlDc0xPS1FQZ0RPIn0%3D#section-100">2020 general election</a> and the <a href="https://www.nytimes.com/2018/11/06/us/politics/midterm-elections-results.html">2018 midterm elections</a>.</p><img src="https://counter.theconversation.com/content/222233/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>While young voters say they would be more likely to vote for Biden after they learn more about the economy and other topics, they did not appear affected by Donald Trump’s norm-defying behavior.Neil O'Brian, Assistant Professor of Political Science, University of OregonChandler James, Assistant Professor of Political Science, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2228252024-02-15T13:43:31Z2024-02-15T13:43:31ZSouth Africa has spent billions in 4 years to create jobs for young people: how their wages affect the broader economy<p>In October 2020 the South African government launched a collection of public employment programmes, initially intended as a response to the COVID-19 pandemic. The initiative, called the <a href="https://www.stateofthenation.gov.za/employment-stimulus-dashboard">Presidential Employment Stimulus</a>, has been extended since then. The total budget allocation to March 2024 was R42 billion (US$2.1 billion). </p>
<p>By December 2023 it had directly created <a href="https://pres-employment.openup.org.za/img/February_2024_Update.pdf">1.8 million jobs and livelihood opportunities</a>. These have been mostly temporary jobs in public employment programmes such as school education assistants. It has also included financial support to various sectors. </p>
<p>An important question is how much the programme’s spending stimulates economic activity in local communities and nationally. That is, to what extent it supports job creation or higher incomes outside the programme.</p>
<p>South Africa has an exceptionally high unemployment rate (<a href="https://www.statssa.gov.za/publications/P0211/P02113rdQuarter2023.pdf">32% or 41%, depending on the definition</a>), particularly concentrated among the youth. <a href="https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?end=2022&locations=ZA&start=1990">Economic growth has been stagnant</a> for the last 15 years, and increasing pressure has been placed on the national budget. While the core objective of a public employment programme is to provide direct employment and <a href="https://fundawande.org/img/cms/news/Limpopo%20Second%20Midline%20Report%202023%20V03.pdf">improve service provision</a>, in this context it is also important to understand how it might stimulate economic activity.</p>
<p>At the <a href="https://www.saldru.uct.ac.za/">Southern Africa Labour and Development Research Unit</a> at the University of Cape Town, we were commissioned by the Presidency to draw on our knowledge of programme evaluation and South Africa’s social assistance policy to try to answer this question. <a href="https://www.afd.fr/en/ressources/stimulus-effects-large-public-employment-programme">We evaluated</a> spending associated with the largest component of the programme – the <a href="https://www.education.gov.za/Programmes/BEEI.aspx">Basic Education Employment Initiative</a>. </p>
<p>We found that the programme likely does support broader economic activity, and these effects partly persist after the end of the programme. Participants buy goods which are produced to some extent in local value chains, and which employ local labour, rather than being imported. The programme spending does not just “disappear”, but recirculates in the South African economy.</p>
<h2>The study</h2>
<p>The Basic Education Employment Initiative has employed about 245,000 young people per phase to assist schools across the country. The duration of employment has varied with each phase. More recently it has been eight months. Participants are employed in full-time positions and are paid the monthly national minimum wage, which is approximately R4,000 (US$209).</p>
<p>The programme completed its fourth phase in 2023. Since it was launched in December 2020 it has employed over 850,000 young people, becoming the <a href="https://www.stateofthenation.gov.za/employment-stimulus-dashboard">largest</a> youth employment programme in South Africa’s history. </p>
<p>In our study, we focused on phases 2 and 3 of the programme, from November 2021 to August 2022. </p>
<p>First, we looked at how the programme affected participant spending patterns. We then estimated what kind of economic activity this spending supported.</p>
<p>Our initial evidence came from a WhatsApp survey of 31,250 participants we ran with <a href="https://www.harambee.co.za/">Harambee Youth Employment Accelerator</a>, a non-profit which supported the programme in partnership with the Department of Basic Education. Harambee holds contact details of most participants for phases 2 and 3, with permission that the records may be used for programme evaluation. </p>
<p>The survey response rate was unfortunately low. But it showed participants spent their cash mostly on groceries (about 50%), transport and rent. </p>
<p>Most of their income went to necessities, much of it from local stores. </p>
<p>However, our main evidence comes from information provided by a leading grocery retailer. The retailer gave us limited access to fully anonymised sales records from its loyalty rewards programme. </p>
<p>In partnership with <a href="https://omnisient.com/">Omnisient</a>, a privacy-preserving data collaboration platform, we were able to see who in the data was a participant in the programme and who wasn’t, while retaining individual anonymity. We explain in the paper how this was done without revealing or sharing any personally-identifying information. The data collaboration partnership went through a rigorous legal process and received University of Cape Town Research Ethics clearance.</p>
<p>Using this data, we found that average participant spending at the retailer increased from R327 (US$17) per month before the start of the programme to R437 (US$23.50) during the programme. </p>
<p>When compared to a control sample of other customers who shopped at the same locations and kinds of stores as the participants, using a statistical analysis method called <a href="https://mixtape.scunning.com/09-difference_in_differences">difference-in-differences</a>, we found that participant spending sharply increased by 15% during the programme. </p>
<p>Even after the programme ended, participants’ spending remained 4% higher than the baseline. </p>
<p>This might be due to participant savings during the programme, or participants being better placed to find work after the programme ends. </p>
<p>But this aggregate spending increase hides quite a lot of variety, per Table 1. In the largest spending categories, participant spending increased by 16% (groceries; refrigerated and frozen perishables) and 20% (toiletries), but in some smaller categories the percentage increase was much higher (off a low base).</p>
<p>For example, spending on home and small appliances increased by 51%, and kitchenware by 40%. In general, percentage spending increases were lower for food items. This was unsurprising as these necessities already took up a large part of participants’ budget before the programme.</p>
<p>This means the spending increase of 15% at the retailer is likely an underestimate of how much the programme increased participant spending overall, because food items make up over 80% of expenditure at the retailer and are therefore over-represented. </p>
<p>Another reason the 15% increase is probably an underestimate is because we can only see each individual’s shopping, and not the rest of their household. But some participants were probably shopping on behalf of their family before the programme, and during the programme someone else took over shopping responsibilities, using income from the Basic Education Employment Initiative.</p>
<h2>Income effects</h2>
<p>What can we then say about who receives income from this increased expenditure? This part of the paper is exploratory and speculative, because we cannot directly see how spending from the programme flows through the economy, and how firms respond to this increased revenue.</p>
<p>Instead, we have to use back-of-the-envelope calculations to scale up the expenditure, use <a href="https://www.oecd.org/sti/ind/input-outputtables.htm">input-output data</a> from Stats SA to guide assumptions about which industries produce which kinds of goods, and use other firm data to see how firms’ wage bills and profits usually respond to sales increases. In our paper we explain the methods, assumptions and limitations in detail.</p>
<p>With these caveats in mind, the implied direct effect of the programme on the retailer’s sales is about R8 million (US$417,500) per month. Directly, this likely increased the wage bill for workers at the retailer by about R1 million (US$52,188) per month. </p>
<p>Indirectly, the increase in the retailer’s sales would have increased demand from their suppliers, and in turn their suppliers’ suppliers, which we estimate increased employment and wages outside the retailer by another R1.7 million (US$88,734) per month. </p>
<p>What about participant spending outside the retail firm? By scaling up the retailer-specific results, we estimate that overall the programme generates about R38 million (US$2 million) per month in additional value added in the national economy, which translates to R19 million (US$991,473) in additional employment and wages per month, R13 million (US$678,376) of which went towards local community employment.</p>
<h2>What next</h2>
<p>The main beneficiaries of the Basic Education Employment Initiative programmes are the young people who are directly employed by it, and the students in the schools. But the money does not get “thrown away” – one person’s spending is another person’s income. </p>
<p>And the participants do buy goods which are produced locally, using local workers. When evaluating the costs and benefits of the programme, and similar programmes such as social grants, these “extra” economic benefits need to be part of the calculation.</p><img src="https://counter.theconversation.com/content/222825/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joshua Budlender received funding for this research from Agence française de développement (AFD) with the support of the European Union. This independent academic research was commissioned by the South African Presidency. He has previously done academic research and policy advisory work for the South African Presidency and National Treasury.</span></em></p><p class="fine-print"><em><span>Ihsaan Bassier received funding for this research from Agence francaise de developpement (AFD) with the support of the European Union. This independent academic research was commissioned by the South African Presidency. He has previously done academic research and policy advisory work for the South African Presidency and National Treasury. </span></em></p>When evaluating the costs and benefits of the employment programme, and similar ones such as social grants, ‘extra’ economic benefits need to be part of the calculation.Joshua Budlender, PhD candidate in Economics, UMass AmherstIhsaan Bassier, Researcher in Economics, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2225802024-02-13T20:22:20Z2024-02-13T20:22:20ZImmigrants do work that might not otherwise get done – bolstering the US economy<figure><img src="https://images.theconversation.com/files/574706/original/file-20240209-22-8e58kg.jpg?ixlib=rb-1.1.0&rect=46%2C303%2C6889%2C4215&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hundreds protested peacefully in Immokalee, Fla., against a state law enacted in 2023 that imposes restrictions on undocumented immigrants.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Florida%20Day%20Without%20Immigrants/f748660925de4eb49e9de66ebcb24178?Query=immigrant%20workers&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=1114&currentItemNo=9">AP Photo/Rebecca Blackwell</a></span></figcaption></figure><p>Although Congress is failing to pass laws to restrict the number of migrants arriving in the U.S., a majority of Americans – about 6 in 10 – <a href="https://poll.qu.edu/poll-release?releaseid=3889">believe there’s an immigration crisis</a> along the Mexico-U.S. border. Politicians who want fewer people to move here often cast those arriving without prior authorization as a <a href="https://kstp.com/kstp-news/top-news/lawmakers-push-north-star-act-in-effort-to-make-minnesota-sanctuary-state-republicans-warn-of-economic-burden/">burden on the economy</a>.</p>
<p>As an <a href="https://stockton.academia.edu/RamyaVIjaya">economist who has researched immigration and employment</a>, I’m <a href="https://www.cbo.gov/system/files/2024-02/59710-Outlook-2024.pdf">confident that economic trends</a> and research findings contradict those arguments.</p>
<p>The U.S. is <a href="https://www.uschamber.com/workforce/understanding-americas-labor-shortage">experiencing a labor market shortage</a> that is likely to last well into the future as the U.S.-born population gets older overall, <a href="https://www.bls.gov/opub/mlr/2023/article/labor-force-and-macroeconomic-projections.htm">slowing growth in the number of workers</a>.</p>
<p>Rather than a drain on the economy, an uptick in immigration presents an opportunity to alleviate this shortage. Data from <a href="https://doi.org/10.1080/13545701.2020.1759815">my own research</a> and studies conducted by other scholars show that immigrant workers in the U.S. are more likely to be active in the labor market – either employed or looking for work – and tend to <a href="https://www.brookings.edu/articles/the-immigrant-workforce-supports-millions-of-u-s-jobs/">work in professions with</a> the most unmet demand.</p>
<h2>Help really wanted</h2>
<p>The U.S. had <a href="https://www.bls.gov/news.release/pdf/jolts.pdf">9 million job openings</a> in December 2023, according to the Bureau of Labor Statistics. The government agency also found that there were <a href="https://www.bls.gov/news.release/empsit.nr0.htm">6.1 million unemployed people</a> actively seeking paid work.</p>
<p>Economists generally compare the two numbers to calculate the labor shortage. It currently stands at nearly 3 million workers, and the bureau expects this gap to grow as <a href="https://www.bls.gov/news.release/pdf/ecopro.pdf">the population ages and people have fewer children</a> over the next decade.</p>
<p>In other words, the U.S. faces a long-term shortage of people looking for employment.</p>
<p>That shortfall would be much bigger without foreign-born workers, who accounted for a <a href="https://www.bls.gov/opub/ted/2023/foreign-born-workers-were-a-record-high-18-1-percent-of-the-u-s-civilian-labor-force-in-2022.htm">record high of 18.1%</a> of the U.S. civilian labor force in 2022, according to the Bureau of Labor Statistics.</p>
<p><iframe id="aLpRY" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/aLpRY/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>More likely to be active in the workforce</h2>
<p>Another reason why immigrants can help fill that big hole in the U.S. labor market is that so many of them tend to be employed or are looking for work. </p>
<p>About <a href="https://www.bls.gov/news.release/pdf/forbrn.pdf">65.9% of all people who were born elsewhere</a> were either employed or actively looking for work as of 2022, in comparison to 61.5% of people born in the U.S. </p>
<p>This difference has been <a href="https://www.pgpf.org/blog/2022/11/the-foreign-born-labor-force-of-the-united-states">consistent since 2007</a>, according to research by the Peterson Foundation, a think tank that focuses on long-term budget problems.</p>
<p>In a <a href="https://doi.org/10.1080/13545701.2020.1759815">study I conducted a few years ago</a>, I found that immigrants who arrive in the United States as refugees fleeing violence and persecution in their home countries are eventually more likely to be employed or looking for work than people who are born in the U.S.</p>
<h2>More home health aides and janitors</h2>
<p>Some of the labor market’s biggest shortages are especially acute in professions that tend to attract immigrants, <a href="https://theconversation.com/why-the-daunting-economics-of-elder-care-are-about-to-get-much-worse-83123">such as home health aides</a>.</p>
<p>The health care and social services sector as a whole has about <a href="https://www.bls.gov/news.release/jolts.a.htm">1.8 million</a> open jobs, the largest number of job openings currently available.</p>
<p>This is followed by professional and business services with 1.7 million open jobs. This <a href="https://www.bls.gov/iag/tgs/iag60.htm">category encompasses everything from legal services to janitorial work</a>, including cleaning and grounds maintenance.</p>
<p>Currently, about <a href="https://www.bls.gov/news.release/pdf/forbrn.pdf">22% of employed immigrants work</a> in one of those two high-demand categories or another service occupation.</p>
<h2>Making it easier to age in place</h2>
<p>A team of economists has found that the <a href="https://doi.org/10.1111/roie.12607">cost of home health care and support services is lower</a> than average in places with large numbers of immigrant service workers. This in turn makes it more likely that older adults can avoid institutionalization and stay in their own homes. </p>
<p>But, to be sure, immigrant workers providing these vital community support services often <a href="https://doi.org/10.1001/amajethics.2022.890">endure exploitative</a> working conditions. </p>
<p>The labor market data not only makes it clear that the U.S. economy can absorb large numbers of immigrants, but it shows that these newcomers could be a much-needed solution to a labor supply crisis.</p>
<p>And yet people arriving in the U.S. as political asylum applicants are enduring <a href="https://www.washingtonpost.com/business/2023/05/23/one-answer-to-the-migration-crisis-jobs/54096526-f974-11ed-bafc-bf50205661da_story.html">backlogs and facing hurdles in securing employment authorization</a>, which is delaying their entry into the workforce.</p>
<p>Wouldn’t it make more sense for Congress to expand pathways for legal employment access for migrants? From an economic perspective, that seems to be the most prudent course of action.</p><img src="https://counter.theconversation.com/content/222580/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ramya Devan 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>Despite widespread fears about immigrants being a burden, even those arriving as asylum applicants are more likely to work than the US-born population.Ramya Devan, Professor of Economics, Stockton UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2232052024-02-09T14:29:46Z2024-02-09T14:29:46ZSouth African president Cyril Ramaphosa aims for upbeat tone in annual address, but fails to impress a jaundiced electorate<p>This year’s <a href="https://www.gov.za/news/speeches/president-cyril-ramaphosa-2024-state-nation-address-08-feb-2024">State of the Nation Address</a> – delivered annually in February by South Africa’s president – was bound to be stuffed with electioneering messages and slogans. The country goes to the polls <a href="https://www.eisa.org/election-calendar/">any time between May and August</a> and there was no doubt that Cyril Ramaphosa would use the occasion to burnish the governing African National Congress’s reputation.</p>
<p>That’s indeed what he did. The upcoming elections are the most significant since the country became a democracy in 1994. Numerous opinion polls suggest the ANC will <a href="https://www.wits.ac.za/news/latest-news/opinion/2024/2024-02/new-poll-shows-dramatic-decline-in-electoral-support-of-anc.html">fall below 50%</a> of the vote nationally for the first time, providing opportunities for opposition coalitions. A party needs to win <a href="https://www.gov.za/CoalitionsDialogue/faqs">50%</a> or more of the seats in parliament to form a government on its own. </p>
<p>Adding to the moment was the fact that this was the last state of the nation address of Ramaphosa’s term.</p>
<p>In his 105-minute address Ramaphosa tried to remind his audience of the government’s achievements over the past three decades of democracy. </p>
<p>These included 200 prosecutions for corruption, and new public-private partnerships to build power transmission lines. </p>
<p>The omissions included the persistence of <a href="https://southafrica.un.org/en/123531-slow-violence-malnutrition-south-africa">chronic malnutrition</a>, and the <a href="https://theconversation.com/south-africans-are-revolting-against-inept-local-government-why-it-matters-155483">distressing number of ANC-run municipalities</a> whose sewage treatment plants have broken down, which can no longer bill for electricity, and which fail to repair potholed roads.</p>
<p>As a political scientist I’ve <a href="https://journals.co.za/doi/abs/10.10520/nagenda_v2021_n80_a5">studied</a> South African politics for many years.</p>
<p>The president’s speech – looking back and ahead – couldn’t cover up the fact that the last five years have been some of the most difficult for ordinary South Africans. Power cuts have <a href="https://theconversation.com/power-cuts-and-food-safety-how-to-avoid-illness-during-loadshedding-200586">become more severe</a>, <a href="https://www.gov.za/news/media-statements/statistics-south-africa-quarterly-labour-force-survey-quarter-three-2023-14#:%7E:text=The%20unemployment%20rate%20according%20to,000%20over%20the%20same%20period.">joblessness</a> continues to rise and the economy is performing <a href="https://www.resbank.co.za/content/dam/sarb/publications/statements/monetary-policy-statements/2024/january/Statement%20of%20the%20Monetary%20Policy%20Committee%20January%202024.pdf">poorly</a>. </p>
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<a href="https://theconversation.com/south-africas-anc-marks-its-112th-year-with-an-eye-on-national-elections-but-its-record-is-patchy-and-future-uncertain-221125">South Africa’s ANC marks its 112th year with an eye on national elections, but its record is patchy and future uncertain</a>
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<p>If he was hoping to liven up the ANC’s election chances, his speech might just not do it. </p>
<h2>The contested record</h2>
<p>Ramaphosa listed a number of achievements of the last 30 years as testimony of the advances made under successive ANC governments. But many of the claims rang hollow.</p>
<p><strong>Poverty:</strong> In 1994 71% of South Africa’s population lived in poverty; today 55% do, <a href="https://www.gov.za/news/speeches/president-cyril-ramaphosa-2024-state-nation-address-08-feb-2024">he said</a>, citing World Bank figures. He gave an example of a girl born in 1994 whose parents live in a house built by the state, who got a child grant, went to a free school with free meals, and obtained a bursary to graduate from a training college and start earning a living.</p>
<p>All this is true for millions of South Africans. The problem is that it’s not for millions of others. </p>
<p><strong>Employment:</strong> The president devoted paragraphs of his speech to job opportunities created by various government programmes. </p>
<p>But this too was heavily criticised. To my knowledge, the phrase “job opportunity” is state-speak for a temporary job which always ends, usually after three months, to then be offered to someone else in the unemployment queue. Real unemployment – the expanded definition – is <a href="https://www.statssa.gov.za/publications/P0211/Media%20release%20QLFS%20Q4%202022.pdf">around 42%</a>, up from 15% <a href="https://www.nber.org/system/files/working_papers/w13167/w13167.pdf">in 1994</a>.</p>
<p><strong>Energy:</strong> On the continuing power cuts Ramaphosa <a href="https://www.thepresidency.gov.za/state-nation-address-president-cyril-ramaphosa-cape-town-city-hall-2">pledged</a> that</p>
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<p>the worst is behind us and an end to load-shedding is in reach.</p>
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<p>He said public-private partnerships are building 14,000km of transmission cables. These will link up new solar and other power plants to an augmented national grid. </p>
<p>But South Africans have grown weary of unfulfilled promises. Many have been made before. People have become cynical about pledges of future electricity improvements. Sadly, the state power utility, Eskom, could not celebrate 2023 as its centenary. Last year saw the <a href="https://www.bloomberg.com/news/articles/2023-01-22/south-africa-faces-two-more-years-of-power-outages-eskom-says">worst power cuts in the country’s history</a>.</p>
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Read more:
<a href="https://theconversation.com/robberies-surge-as-criminals-take-advantage-of-south-africas-power-outages-199106">Robberies surge as criminals take advantage of South Africa's power outages</a>
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<p><strong>Investment and black ownership:</strong> The president reported that R1.5 trillion (US$79 billion) of new investment had come into South Africa since 2018, and that black ownership of mining had risen from 2% in 1994 to 39% today. A quarter of agricultural private land was now owned by black farmers, and the government’s goal of one-third of farm land being returned to black farmers by 2030 was now in reach. </p>
<p>But evidence shows land reform has a mixed record of <a href="https://www.da.org.za/2022/11/ancs-land-reform-shame-75-of-land-reform-farms-have-failed">successes and failures</a>.</p>
<p><strong>Minimum wage:</strong> Ramaphosa took a swipe at the official opposition, the Democratic Alliance, by reminding South Africans that 6 million workers had had their pay raised by national minimum wages over the past few years. </p>
<p>The Democratic Alliance is <a href="https://www.da.org.za/2020/12/da-opposes-national-minimum-wage-commissions-proposed-increases">opposed to minimum wages</a>.</p>
<p><strong>Social grants:</strong> Ramaphosa listed a host of social security measures. These included 9 million people on <a href="https://www.gov.za/services/services-residents/social-benefits/social-relief-distress">Social Relief of Distress</a> grants (R350 or US$18.42 a month) which started during the COVID pandemic, and the 9 million school children receiving a free lunch daily. There are <a href="https://www.statssa.gov.za/?p=16711">62 million</a> South Africans. </p>
<p>But even here the real story isn’t all that good. Malnutrition and hunger remain stubbornly persistent. National statistics show that <a href="https://southafrica.un.org/en/123531-slow-violence-malnutrition-south-africa">27% of children are stunted</a> – under weight and under height for their age. Child grants cannot feed both a baby and its unemployed single mother. </p>
<p><strong>Health:</strong> the president spoke of a new academic hospital under construction <a href="https://www.sanews.gov.za/south-africa/limpopo-get-new-academic-hospital">in Limpopo province</a>. He did not mention that hundreds of newly graduated doctors cannot find jobs in the public health sector due to budget cuts compelling a <a href="https://www.businesslive.co.za/bd/national/health/2024-02-07-this-is-why-the-health-department-cannot-employ-new-doctors/#:%7E:text=SA%20has%20close%20to%20700,afford%20to%20employ%20these%20professionals">freeze on filling empty posts</a>.</p>
<h2>What was left unsaid</h2>
<p>In my view South Africans won’t be impressed by the speech. Previous State of the Nation addresses have not been followed by implementation. In one ill-advised one <a href="https://www.gov.za/news/speeches/president-cyril-ramaphosa-2019-state-nation-address-07-feb-2019">in 2019</a>, the president fantasised about bullet trains, when his audience were desperately waiting for the resumption of service on slow train commuting routes. They still are.</p>
<p>The 2024 speech offers fertile material for opposition parties to score points against the ANC. They have already started to do so in <a href="https://www.enca.com/top-stories/sona-2024-opposition-parties-criticise-story-tintswalo">TV interviews</a> and other <a href="https://businesstech.co.za/news/business-opinion/750354/sona-2024-reactions-ramaphosa-pats-himself-on-the-back-while-south-africa-sits-in-crisis/">media</a>: promises of an end to power cuts attract the most sarcasm.</p>
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<strong>
Read more:
<a href="https://theconversation.com/thirty-years-of-rural-health-research-south-africas-agincourt-studies-offer-unique-insights-222624">Thirty years of rural health research: South Africa’s Agincourt studies offer unique insights</a>
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<p>This address had to be held in the old Cape Town city hall, rented from a DA-controlled municipality, because negligent security failed to prevent an arsonist from <a href="https://www.parliament.gov.za/press-releases/media-statement-further-measures-regarding-parliament-fire-incident-and-alleged-administrative-irregularities">burning down the parliament building</a> on Jauary 2022 – symptomatic of general state incompetence.</p>
<p>Parliamentary practice is that opposition parties are given at least two full days to criticise the State of the Nation address and to present their alternatives. </p>
<p>This address by and large repeats what the ANC and government have already said on several occasions. Likewise, the opposition responses are not new. It will be more of the same from both sides all the way to voting day.</p><img src="https://counter.theconversation.com/content/223205/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Keith Gottschalk is a member of the African National Congress, but writes this piece in his professional capacity as a political scientist.</span></em></p>The president’s speech couldn’t cover up for the fact that the last five years have been among the most difficult for ordinary South Africans.Keith Gottschalk, Political Scientist, University of the Western CapeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2218192024-02-06T15:56:29Z2024-02-06T15:56:29ZTurkey earthquakes one year on: the devastation has exposed deep societal scars and women are bearing the brunt<p>In the early hours of February 6 2023, the south-eastern region of Turkey was rocked by a series of powerful earthquakes. One year on, large parts of Hatay, the worst-affected province, remain in ruins. In a <a href="https://www.youtube.com/watch?v=a6jxgqvi4xY">vlog</a> from Hatay on January 24, journalist Cüneyt Özdemir remarked: “The city is like a construction site mostly under rubble.” </p>
<p>The <a href="https://earthquake.usgs.gov/earthquakes/eventpage/us6000jllz/executive">first earthquake</a>, measuring 7.8 on the Richter scale, struck near the border with Syria, killing at least 1,500 people as they slept. This was followed by a <a href="https://earthquake.usgs.gov/earthquakes/eventpage/us6000jlqa/executive">7.5-magnitude quake</a> nine hours later, located around 59 miles (95km) to the south-west. Hatay, already in ruins, was shaken again by a <a href="https://www.theguardian.com/world/2023/feb/20/turkey-new-6-point-4-magnitude-earthquake-hatay">6.4-magnitude tremor</a> two weeks later.</p>
<p>The disaster resulted in the <a href="https://reliefweb.int/report/turkiye/devastating-earthquakes-southern-turkiye-and-northern-syria-december-15th-2023-situation-report-30-entr">deaths</a> of more than 50,000 people while injuring a further 107,000. A total of 9 million people have been affected, including 1.7 million refugees who had fled the civil war in Syria. </p>
<p>One year on, the region’s economy and society remain shaken. The devastation has exposed deep societal scars, and the task of rebuilding is still immense.</p>
<h2>Economic ramifications</h2>
<p>The affected areas represented <a href="https://www.tobb.org.tr/Sayfalar/Eng/Detay.php?rid=29752&lst=MansetListesi">13.3%</a> of Turkey’s total employment before the earthquakes. The quakes rendered around 220,000 workplaces <a href="https://www.ilo.org/wcmsp5/groups/public/---europe/---ro-geneva/---ilo-ankara/documents/publication/wcms_873893.pdf">unusable</a>, leading to a 16% reduction in working hours. Particularly hard-hit provinces such as Hatay, Kahramanmaraş and Malatya lost <a href="https://www.tobb.org.tr/BilgiErisimMudurlugu/Sayfalar/sanayi-kapasite-raporu-istatistikleri.php">more than 10%</a> of their combined industrial capacity.</p>
<p>A year on, unemployment remains a dire problem in these areas. Over 230,000 people in the region applied for <a href="https://media.iskur.gov.tr/79379/12-aralik-2023-aylik-istatistik-tablolari.xlsx">unemployment benefits</a> throughout 2023, but less than 40% of these applications met the necessary criteria. </p>
<p>The Turkish government has recently launched a <a href="https://www.ekonomim.com/ekonomi/gunluk-850-lira-odenecek-deprem-bolgesinde-istihdama-donus-programi-baslatildi-haberi-725793">programme</a> to help people return to employment in the region. But <a href="https://www.evrensel.net/haber/508685/deprem-bolgesinde-istihdama-donus-programi-patronlara-bedava-depremzede-isci">labour unions</a> view this as a way of providing cheap labour to employers, and have asked the government to focus more on satisfying the urgent needs of workers, such as housing.</p>
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<img alt="A group of people standing in front of crumbled buildings with a cloud of smoke overhead." src="https://images.theconversation.com/files/573731/original/file-20240206-24-ex9dv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/573731/original/file-20240206-24-ex9dv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/573731/original/file-20240206-24-ex9dv1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/573731/original/file-20240206-24-ex9dv1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/573731/original/file-20240206-24-ex9dv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/573731/original/file-20240206-24-ex9dv1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/573731/original/file-20240206-24-ex9dv1.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">
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<span class="caption">Hatay was devastated by last February’s earthquakes.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hatay-iskenderun-turkey-february-7th-2023-2260847503">Doga Ayberk Demir/Shutterstock</a></span>
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<h2>Fractured society</h2>
<p>The earthquakes shattered not only the region’s economy but the very fabric of society. More than 850,000 buildings collapsed in the initial quakes and the thousands of aftershocks that followed. This exposed <a href="https://www.bbc.co.uk/news/64568826">inadequacies</a> in construction practices and a widespread lack of compliance with building regulations. </p>
<p>The government <a href="https://www.reuters.com/world/middle-east/turkey-issues-earthquake-rebuilding-rules-after-millions-left-homeless-2023-02-24/">pledged</a> to rebuild 650,000 homes within a year – but progress has been slow. A mere <a href="https://www.barrons.com/news/fear-uncertainty-and-grief-year-after-turkey-s-quake-3bd85540">15%</a> of these new homes have been built, and hundreds of thousands of people remain displaced. Today, more than <a href="https://sheltercluster.org/turkiye-earthquake-2023/documents/20240118-shelter-sector-turkiye-earthquake">670,000 people</a> are still living in small, temporary, metal container homes.</p>
<p>The earthquakes also had a profound impact on education in the region. Damage to schools and other educational facilities disrupted the in-class teaching of around <a href="https://dergipark.org.tr/en/download/article-file/3091756">7 million</a> students. </p>
<p>On January 2 2024, Turkey’s minister of education, Yusuf Tekin, <a href="https://basinmus.meb.gov.tr/www/bakan-tekin-haberturk-canli-yayininda-egitim-gundemini-degerlendirdi/icerik/105">admitted</a> that only a quarter of the educational facilities that were destroyed by the quakes have been rebuilt. During the most recent school term (mid-September to mid-January), students were taught mostly in <a href="https://www.egitimis.org.tr/guncel/sendika-haberleri/2023-2024-egitim-ogretim-yili-1-yariyil-degerlendirmesi-4360/">sites under construction</a>.</p>
<h2>Roadmap for recovery</h2>
<p>Turkey’s government claims to be focusing on <a href="https://time.com/6255896/turkey-rebuild-earthquake-climate-resilience/">“building back better”</a>. Its stated aim is to construct cities and communities that are more resilient to any such shocks in the future. This is commendable (provided it does in fact happen), but it’s crucial that efforts to recover go beyond mere reconstruction. </p>
<p>The government’s response to the disaster has, for example, largely <a href="https://www.mei.edu/publications/building-back-better-gender-mind-centering-turkeys-women-and-girls-earthquake-recovery#:%7E:text=Recommendations%20for%20building%20back%20better&text=More%20must%20be%20done%20to,rights%2Dbased%20disaster%20management%20framework.">failed</a> women and girls. Following the quakes, women and girls have <a href="https://eca.unwomen.org/sites/default/files/2023-04/UN%20Women%20Brief%20on%20Earthquake%20in%20Turkiye%20Gendered%20impacts%20and%20response.pdf">faced</a> heightened care and domestic work responsibilities, health challenges (particularly related to <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10084526/">pregnancy</a>), and an increased susceptibility to violence.</p>
<p>On top of this, they grapple with enduring poverty. A <a href="https://ekmekvegul.net/gundem/deprem-bolgesinde-kadinlarin-ucreti-asgarinin-altinda">recent report</a> which surveyed 60 women in the affected region revealed that most are earning what is called a “women’s daily wage”. This wage has emerged in the region in the aftermath of the quakes and falls below the national minimum wage, further worsening <a href="https://turkiye.unfpa.org/en/gender-equality#:%7E:text=Labor%20force%20participation%20rate%20of,the%20rest%20of%20the%20world">existing gender inequality</a> in the country.</p>
<p>According to the same report, wages below the minimum wage have become the norm for women in the region – including those women in white-collar jobs.</p>
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Read more:
<a href="https://theconversation.com/in-turkey-women-are-feeling-the-worst-aftershocks-of-the-earthquake-disaster-this-disparity-may-lead-to-dwindling-trust-in-government-200801">In Turkey, women are feeling the worst aftershocks of the earthquake disaster – this disparity may lead to dwindling trust in government</a>
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<p>While the Turkish government’s response to last February’s earthquakes has been widely criticised, it still enjoyed <a href="https://www.theguardian.com/world/2023/may/26/turkey-quake-zone-voters-backing-erdogan-in-runoff">strong support</a> in the national election in the summer of 2023. Turkey’s current government, led by President Recep Tayyip Erdoğan, and its alliance came out on top in ten of the 11 earthquake-affected provinces.</p>
<p>Turkey is now gearing up for local elections this spring. The <a href="https://www.dailysabah.com/politics/elections/turkiyes-ak-party-eyes-another-victory-in-municipal-elections">current political rhetoric</a> is dominated by a focus on replacing old buildings not resistant to major disasters with new ones. But it is clear the affected regions need solutions that include all members of society – which will only be possible with the help of the national government.</p>
<p>Yet, in a <a href="https://www.dw.com/tr/erdo%C4%9Fandan-hataya-yerel-se%C3%A7im-mesaj%C4%B1/a-68167503">speech</a> on February 3 2024, Erdoğan hinted there would be a sustained absence of assistance in the disaster-stricken areas if central government and local administration “do not join hands and are not in solidarity”. However, the nature of this alignment – whether the president meant cooperation or political ideology – remains unclear.</p><img src="https://counter.theconversation.com/content/221819/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ufuk Gunes Bebek 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>It has been one year since Turkey’s deadly earthquakes – the road ahead remains daunting.Ufuk Gunes Bebek, Assistant Professor in Economics, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2189272024-02-04T01:02:06Z2024-02-04T01:02:06ZMortgage and inflation pain to ease, but only slowly: how 31 top economists see 2024<figure><img src="https://images.theconversation.com/files/572630/original/file-20240201-21-xh5xpo.png?ixlib=rb-1.1.0&rect=45%2C86%2C1871%2C870&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Wes Mountain/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span></figcaption></figure><p>A panel of 31 leading economists assembled by The Conversation sees no cut in interest rates before the middle of this year, and only a slight cut by December, enough to trim just $55 per month off the cost of servicing a $600,000 variable-rate mortgage.</p>
<p>The <a href="https://theconversation.com/au/topics/conversation-economic-survey-81354">panel</a> draws on the expertise of leading forecasters at 28 Australian universities, think tanks and financial institutions – among them economic modellers, former Treasury, International Monetary Fund and Reserve Bank officials, and a former member of the Reserve Bank board.</p>
<p>Its forecasts paint a picture of weak economic growth, stagnant consumer spending, and a continuing per-capita recession.</p>
<p>The average forecast is for the Reserve Bank to delay cutting its cash rate, keeping it near its present 4.35% until at least the middle of the year, and then cutting it to <a href="https://cdn.theconversation.com/static_files/files/3028/The_Conversation_AU_February_2024_Economic_Survey.pdf">4.2%</a> by December 2024, 3.6% by December 2025 and 3.4% by December 2026.</p>
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<p>The gentle descent would deliver only three interest rate cuts by the end of next year, cutting $274 from the monthly cost of servicing a $600,000 mortgage and leaving the cost around $1,100 higher than it was before rates began climbing.</p>
<p>Six of the experts surveyed expect the Reserve Bank to increase rates further in the first half of the year, while 20 expect no change and three expect a cut.</p>
<p>Former head of the NSW treasury Percy Allan said while the Reserve Bank would push up rates in the first half of the year to make sure inflation comes down, it would be forced to relent in the second half of the year as unemployment grows and the economy heads towards recession.</p>
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<a href="https://theconversation.com/the-7-new-graphs-that-show-inflation-falling-back-to-earth-220670">The 7 new graphs that show inflation falling back to earth</a>
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<p>Warwick McKibbin, a former member of the Reserve Bank board, said the board would push up rates twice more in the first half of the year as insurance against inflation before leaving them on hold.</p>
<p>Former Reserve Bank of Australia chief economist Luci Ellis, who is now chief economist at Westpac, expects the first cut no sooner than September, believing the board will wait to see clear evidence of further falls in inflation and economic weakening before it moves.</p>
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<h2>Inflation to keep falling, but more gradually</h2>
<p>Today’s <a href="https://www.rba.gov.au/">Reserve Bank board meeting</a> will consider an inflation rate that has come down <a href="https://theconversation.com/the-7-new-graphs-that-show-inflation-falling-back-to-earth-220670">faster than it expected</a>, diving from 7.8% to 4.1% in the space of a year.</p>
<p>The newer more experimental monthly measure of inflation was just <a href="https://theconversation.com/the-7-new-graphs-that-show-inflation-falling-back-to-earth-220670">3.4%</a> in the year to December, only points away from the Reserve Bank’s target of 2–3%.</p>
<p>But the panel expects the descent to slow from here on, with the standard measure taking the rest of the year to fall from 4.1% to 3.5% and not getting below 3% until <a href="https://cdn.theconversation.com/static_files/files/3027/The_Conversation_AU_2024_economic_survey.pdf">late 2025</a>.</p>
<p>Economists Chris Richardson and Saul Eslake say while inflation will keep heading down, the decline might be slowed by supply chain pressures from the conflict in the Middle East and the boost to incomes from the <a href="https://theconversation.com/albanese-tax-plan-will-give-average-earner-1500-tax-cut-more-than-double-morrisons-stage-3-221875">tax cuts</a> due in July.</p>
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<h2>Slower wage growth, higher unemployment</h2>
<p>While the panel expects wages to grow faster than the consumer price index, it expects wages growth to slip from around <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release">4%</a> in 2023 to 3.8% in 2024 and 3.4% in 2025 as higher unemployment blunts workers’ bargaining power.</p>
<p>But the panel doesn’t expect much of an increase in unemployment. It expects the unemployment rate to climb from its present <a href="https://www.datawrapper.de/_/w9h9f/">3.9%</a> (which is almost a long-term low) to 4.3% throughout 2024, and then to stay at about that level through 2025.</p>
<p>All but two of the panel expect the unemployment rate to remain below the range of 5–6% that was typical in the decade before COVID.</p>
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Read more:
<a href="https://theconversation.com/we-can-and-should-keep-unemployment-below-4-say-top-economists-211277">We can and should keep unemployment below 4%, say top economists</a>
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<p>Economic modeller Janine Dixon said the “new normal” between 4% and 5% was likely to become permanent as workers embraced flexible arrangements that allow them to stay in jobs in a way they couldn’t before.</p>
<p>Cassandra Winzar, chief economist at the Committee for the Economic Development of Australia, said the government’s commitment to full employment was one of the things likely to keep unemployment low, along with Australia’s demographic transition as older workers leave the workforce.</p>
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<h2>Slower economic growth, per-capita recession</h2>
<p>The panel expects very low economic growth of just 1.7% in 2024, climbing to 2.3% in 2025. Both are well below the 2.75% the treasury believes the economy is <a href="https://treasury.gov.au/speech/the-economic-and-fiscal-context-and-the-role-of-longitudinal-data-in-policy-advice">capable of</a>.</p>
<p>All but one of the forecasts are for economic growth below the present population growth rate of 2.4%, suggesting that the panel expects population growth to exceed economic growth for the second year running, extending Australia’s so-called <a href="https://theconversation.com/were-in-a-per-capita-recession-as-chalmers-says-gdp-steady-in-the-face-of-pressure-212642">per capita recession</a>.</p>
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<p>The lacklustre forecasts raise the possibility of what is commonly defined as a “technical recession”, which is two consecutive quarters of negative economic somewhere within a year of mediocre growth.</p>
<p>Taken together, the forecasters assign a 20% probability to such a recession in the next two years, which is lower than in <a href="https://theconversation.com/two-more-rba-rate-hikes-tumbling-inflation-and-a-high-chance-of-recession-how-our-forecasting-panel-sees-2023-24-208477">previous surveys</a>.</p>
<p>But some of the individual estimates are high. Percy Allen and Stephen Anthony assign a 75% and 70% chance to such a recession, and Warren Hogan a 50% chance.</p>
<p>Hogan said when the economic growth figures for the present quarter get released, they are likely to show Australia is in such a recession at the moment. </p>
<p>The economy barely grew at all in the September quarter, expanding just <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release">0.2%</a> and was likely to have shrunk in the December quarter and to shrink further in this quarter.</p>
<p>The panel expects the US economy to grow by 2.1% in the year ahead in line with the <a href="https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024">International Monetary Fund</a> forecast, and China’s economy to grow 5.4%, which is lower than the International Monetary Fund’s forecast.</p>
<h2>Weaker spending, weak investment</h2>
<p>The panel expects weak real household spending growth of just 1.2% in 2014, supported by an ultra-low household saving ratio of close to zero, down from a recent peak of 19% in September 2021.</p>
<p>Mala Raghavan of The University of Tasmania said previous gains in income, rising asset prices and accumulated savings were being overwhelmed by high inflation and rising interest rates. </p>
<p>Luci Ellis expected the squeeze to continue until tax and interest rate cuts in the second half of the year, accompanied by declining inflation.</p>
<p>The panel expects non-mining investment to grow by only 5.1% in the year ahead, down from 15%, and mining investment to grow by 10.2%, down from 22%.</p>
<p>Johnathan McMenamin from Barrenjoey said private and public investment had been responsible for the lion’s share of economic growth over the past year and was set to plateau and fade as a driver of growth.</p>
<h2>Home prices to climb, but more slowly</h2>
<p>The panel expects home price growth of 4.6% in Sydney during 2024 (down from 11.4% in 2024) and 3.1% in Melbourne, down from 3.9% in 2024.</p>
<p>ANZ economist Adam Boyton said decade-low building approvals and very strong population growth should keep demand for housing high, outweighing a drag on prices from high interest rates. While high interest rates have been restraining demand, they are likely to ease later in the year.</p>
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<p>In other forecasts, the panel expects the Australian dollar to stay below US$0.70, closing the year at US$0.69, it expects the ASX 200 share market index to climb just 3% in 2024 after climbing 7.8% in 2023, and it expects a small budget surplus of A$3.8 billion in 2023-24, followed by a deficit of A$13 billion in 2024-25.</p>
<p>The budget surplus should be supported by a forecast iron ore price of US$114 per tonne in December 2024, down from the present US$130, but well up on the <a href="https://budget.gov.au/content/myefo/index.htm">US$105</a> assumed in the government’s December budget update.</p>
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<h2>The Conversation’s Economic Panel</h2>
<p><em>Click on economist to see full profile.</em></p>
<p><iframe id="tc-infographic-1014" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/1014/ed3b94caed943dd75aa383a014aca7a10b13bf10/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<p><strong>Download the answers as <a href="https://cdn.theconversation.com/static_files/files/3030/The_Conversation_AU_Feb_2024_economic_survey.xlsx?1707030546">XLS</a> <a href="https://cdn.theconversation.com/static_files/files/3028/The_Conversation_AU_February_2024_Economic_Survey.pdf">PDF</a></strong></p><img src="https://counter.theconversation.com/content/218927/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Martin is economics editor of The Conversation AU.</span></em></p>The Conversation’s expert 00panel expects inflation to continue to fall, but more gradually, and it expects the RBA to be slow in responding. Unemployment should climb and economic growth weaken.Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2205372024-01-22T22:32:59Z2024-01-22T22:32:59ZYoung Black men in Canada face racism, ageism and classism when looking for work<figure><img src="https://images.theconversation.com/files/569965/original/file-20240117-19-skld11.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C5372%2C3581&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Black people in Canada continue experiencing oppression and dehumanization because of how their skin colour is viewed and represented.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/young-black-men-in-canada-face-racism-ageism-and-classism-when-looking-for-work" width="100%" height="400"></iframe>
<p>Youth employment in Canada continues to be a concern. Young people between the ages of 15 and 30 <a href="https://www150.statcan.gc.ca/n1/pub/42-28-0001/2021001/article/00002-eng.htm">are less likely to find and sustain employment compared to an older population of Canadians</a>.</p>
<p>According to Statistics Canada, around 11 per cent of youth aged 15-24 are unemployed. Among young Black Canadians that number is around <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/240105/dq240105a-eng.htm">17.5 per cent</a>.</p>
<p>Black people in Canada continue experiencing oppression and dehumanization <a href="https://doi.org/10.1111/cars.12400">because of how their skin colour is viewed and represented</a>.</p>
<p>Impoverished Black male youth in particular encounter racism, ageism, classism and gender biases when looking for work. These are stereotypes which encourage many Canadian employers to view them as not good for business and unemployable.</p>
<h2>Intersecting oppressions</h2>
<p>As a sociocultural anthropologist who is dedicated to uncovering the nuances in Black youth un(der)employment, I have found that impoverished Black youths’ inability to find employment is due to <a href="https://www.dukeupress.edu/intersectionality-as-critical-social-theory">intersectional oppressions</a> such as ageism and classism, which is also tied to their Blackness. </p>
<p>The challenges they face vary among different Canadian cities. In my <a href="https://repository.library.carleton.ca/concern/etds/xg94hq41j">doctoral study</a> about impoverished Black male youth in Montréal, Ottawa and Toronto, I found these youth are denied employment opportunities for multifaceted reasons. These include discrimination based on a person’s address, age, classism and gender biases — particularly about the negative stereotypical ideas that surround Black manhood. </p>
<p>The sociological study focused on Black male youth between the ages of 15 to 29 who live in low income areas between Montréal, Toronto and Ottawa. The qualitative study gathered data from 21 young Black men through semi-structured interviews and focus groups. </p>
<p>Political philosopher <a href="https://groveatlantic.com/book/toward-the-african-revolution/">Frantz Fanon</a> warned us of the dangers of recognizing Black people’s experiences as one. Black people have differences that contribute to their humanness, which the colonizer has denied.</p>
<p>Similarly, when we presume all youth have the same experiences, we fail to take diversity seriously and may be falsely interpreting the lived experiences of many youth. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A young Black man working on a laptop." src="https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569950/original/file-20240117-21-xa58hw.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>
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<span class="caption">Young Black men face overlapping forms of discrimination based on racist and classist views of Black masculinity.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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</figure>
<p>There was never one reason, such as anti-Black racism, which was the cause of employment barriers among these young people. The reality is these youth experience overlapping discrimination that are tied to anti-Black racism, such as classism, which varied based on different encounters with various employers.</p>
<p>My study found that impoverished Black male youth are tied to a socially manufactured hierarchical system that considers race, gender, sexuality, ability, age, social class and education. Unfortunately, employers excluded them because of the many intersections that make up their identities.</p>
<p>Although the Canadian government recognizes Black youth face barriers to employment, <a href="https://www.miragenews.com/minister-marci-ien-supports-black-youth-955894/">few politicians recognize that more needs to be done to create inclusivity in the workplace</a>. The lived experiences of impoverished Black male youth and their ability to access employment are not the same nationwide. </p>
<h2>Secularism laws impact opportunities</h2>
<p>My study also found that many Black male youth in Montréal are also at the mercy of Québec’s <a href="https://theconversation.com/the-supposed-benefits-of-quebec-secularism-bill-dont-outweigh-the-costs-114907">secularism law</a>. Black male youth in the city must deal with classism and constantly being tied to the unworthy idea that they do not serve many employees’ needs. This is based on the stereotypical ideas of what their Black masculinity represents. </p>
<p>Some of these young people adorn religious clothing, which has complicated their job-seeking strategies. Many young Black men living in the province <a href="https://policyoptions.irpp.org/magazines/february-2023/elghawaby-quebec-double-standard/">face discrimination based on their religious values</a> and their clothing or attire was a reason they were overlooked for employment.</p>
<p>These secularism laws are an added issue for impoverished Black male youth seeking employment, as many of them do not feel a sense of belonging, and are constantly faced with intersecting social oppressions where they are overlooked for employment opportunities. </p>
<p>We must realize that some laws and policies may be suitable for some Canadians. But in an effort to create legislation, there is a disregard for the social concerns of those who have been othered. Creating laws without considering them adds to a sense that they do not belong in this country.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A Black teenage boy carrying a backpack poses for a photo." src="https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570411/original/file-20240119-17-moluuo.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>
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<span class="caption">Black men and boys must continuously confront racist narratives that impact their future prospects.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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</figure>
<h2>Thinking through Black masculinity</h2>
<p>For years, Black Canadian scholars such as <a href="https://edu.yorku.ca/edu-profiles/index.php?mid=2196">Carl James</a>, <a href="https://brocku.ca/social-sciences/sociology/people/tamari-kitossa/">Tamari Kitossa</a> and myself have discussed Black masculinities in Canada and how Black men are seen as dangerous, untrustworthy men undeserving of a sense of belonging in the white settler nation-state. </p>
<p><a href="https://ualbertapress.ca/9781772125436/appealing-because-he-is-appalling/">These historical narratives continue to inform our present day society</a>, which has complicated how impoverished young Black men seek and obtain employment. Failing to recognize these tensions among young Black men is distancing ourselves from the lived experiences rooted in history, which are playing out in our contemporary moments.</p>
<p>The young Black men I spoke to courageously shared what it means to seek employment while having to negotiate your right to be treated fairly. When these young men do eventually obtain employment, they are often trapped in low-paying, menial labour positions reflective of unfair stereotypes about Black masculinity.</p>
<p>This type of work degrades their humanity and selfhood. The dehumanization faced by these youth when they attempt to seek employment demonstrates how they are othered not solely by their race.</p>
<p>For there to be equitable hiring practices, governments and employers must understand anti-Black racism in light of the intertwined forms of discrimination that often accompany it. </p>
<p>Homogenizing the lived experiences of Black youth can cause harm and promote misconceptions about their lived experiences. I urge people to refrain from thinking about racialized people based on their race alone. Instead, we should intentionally focus on the individuality of people. We must practice cultural competency which invites us to appreciate people and their different lived experiences.</p><img src="https://counter.theconversation.com/content/220537/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Warren Clarke 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>Young Black men are being denied employment for multifaceted reasons, and when they do find work, are often trapped in low-paying jobs.Warren Clarke, Assistant Professor, Anthropology, University of ManitobaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2196172023-12-26T20:29:23Z2023-12-26T20:29:23ZNZ report card 2023: near the top of the class in some areas, room for improvement elsewhere<p>End-of-year results aren’t only for school and university students. Countries, too, can be measured for their progress – or lack of it – across numerous categories and subject areas. </p>
<p>This report card provides a snapshot of how New Zealand has fared in 2023. Given the change of government, it will be a useful benchmark for future progress reports. (Somewhat appropriately, the coalition seems keen on standardised testing in education.)</p>
<p>It’s important to remember that this exercise is for fun and debate. International and domestic indices and rankings should be read with a degree of caution – measurements, metrics and numbers from 2023 tell us only so much. </p>
<p>Nevertheless, it’s still possible to trace the nation’s ups and downs. As the year draws to an end, we can use these statistics and rankings to decide whether New Zealand really is the best country in the world – or whether we need to make some additional new year’s resolutions.</p>
<h2>International pass marks</h2>
<p>Overall, the country held its own internationally when it came to democratic values, freedoms and standards. But there was a little slippage.</p>
<p>Despite falling a spot, Transparency International ranked New Zealand <a href="https://www.transparency.org/en/cpi/2022">second-equal</a> (next to Finland) for being relatively corruption-free. </p>
<p>In the Global Peace Index, New Zealand dropped two places, now <a href="https://www.visionofhumanity.org/maps/">fourth-best</a> for safety and security, low domestic and international conflict, and degree of militarisation.</p>
<p>The country held its ground in two categories. Freedom House underlined New Zealand’s near-perfect score of <a href="https://freedomhouse.org/countries/freedom-world/scores">99 out of 100</a> for political and civil liberties – but three Scandinavian countries scored a perfect 100. The <a href="https://www.weforum.org/publications/global-gender-gap-report-2023/">Global Gender Gap Report</a> recorded New Zealand as steady, the fourth-most-gender-equal country. </p>
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Read more:
<a href="https://theconversation.com/is-winston-peters-right-to-call-state-funded-journalism-bribery-or-is-there-a-bigger-threat-to-democracy-218782">Is Winston Peters right to call state-funded journalism ‘bribery’ – or is there a bigger threat to democracy?</a>
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<p>Supplementary work by the United Nations Development Programme shows New Zealand making impressive strides in breaking down <a href="https://www.undp.org/sites/g/files/zskgke326/files/2023-06/gsni202302pdf_0.pdf">gender bias</a>.</p>
<p>The Index for Economic Freedom, which covers everything from property rights to financial freedom, again placed New Zealand <a href="https://www.heritage.org/index/">fifth</a>, but our grade average is falling. We also dropped a place in the World Justice Project’s <a href="https://worldjusticeproject.org/rule-of-law-index/">Rule of Law Index</a> to eighth.</p>
<p>New Zealanders are about as happy as they were last year, still the tenth-most-cheery nation, according to the <a href="https://worldhappiness.report/">World Happiness Report</a>.</p>
<p>The Human Development Index did not report this year (New Zealand was 13th in 2022). But the <a href="https://www.prosperity.com/rankings">Legatum Prosperity Index</a>, another broad measure covering everything from social capital to living conditions, put New Zealand tenth overall – reflecting a slow decline from seventh in 2011.</p>
<p>The Economist’s <a href="https://www.eiu.com/n/campaigns/global-liveability-index-2023/">Global Liveability Index</a> has Auckland at equal tenth, with Wellington racing up the charts to 23rd. (Hamilton, my home, is yet to register.)</p>
<p>While New Zealand registered a gradual slide in the Reporters Without Borders <a href="https://rsf.org/en/index">Press Freedom Index</a>, at 13th position it still ranks highly by comparison with other nations.</p>
<h2>Could do better</h2>
<p>New Zealand has seen some progress around assessment of terror risk. While the national terror threat level has remained at “<a href="https://www.dpmc.govt.nz/our-programmes/national-security/counter-terrorism#:%7E:text=New%2520Zealand's%2520current%2520national%2520terrorism,Zealanders%2520both%2520here%2520and%2520overseas.">low</a>”, the <a href="https://www.visionofhumanity.org/maps/global-terrorism-index/#/">Global Terrorism Index</a> ranked the country 46th – lower than the US, UK and Russia, but higher than Australia at 69th.</p>
<p>The country’s previous drop to 31st in the <a href="https://www.imd.org/centers/wcc/world-competitiveness-center/rankings/world-competitiveness-ranking/">Global Competitiveness Report</a> has stabilised, staying the same in 2023. </p>
<p>On the <a href="https://www.globalinnovationindex.org/Home">Global Innovation Index</a>, we came in 27th out of 132 economies – three spots worse than last year. <a href="https://kof.ethz.ch/en/news-and-events/media/press-releases/2022/12/globalisation-index.html#:%7E:text=The%2520KOF%2520Globalisation%2520Index%2520measures,a%2520long%2520period%2520of%2520time.">The Globalisation Index</a>, which looks at economic, social and political contexts, ranks New Zealand only 42nd.</p>
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Read more:
<a href="https://theconversation.com/cop28-the-climate-summits-first-health-day-points-to-what-needs-to-change-in-nz-218809">COP28: the climate summit’s first Health Day points to what needs to change in NZ</a>
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<p>But the country’s response to climate change is still considered “highly insufficient” by the <a href="https://climateactiontracker.org/">Climate Action Tracker</a>, which measures progress on meeting agreed global warming targets. The <a href="https://ccpi.org/">Climate Change Performance Index</a> is a little more generous, pegging New Zealand at 34th, still down one spot on last year.</p>
<p>New Zealand’s overseas development assistance – low as a percentage of GDP compared to other <a href="https://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/official-development-assistance.htm">OECD countries</a> – had mixed reviews. </p>
<p>The <a href="https://odi.org/en/insights/principled-aid-index-2023-in-a-weaponised-world-smart-development-power-is-not-dead/">Principled Aid Index</a> – which looks at the purposes of aid for global co-operation, public spiritedness and addressing critical development goals – ranks New Zealand a lowly 22 out of 29. </p>
<p>The <a href="https://www.cgdev.org/cdi#/">Commitment to Development Index</a>, which measures aid as well as other policies (from health to trade) of 40 of the world’s most powerful countries, has New Zealand in 19th place.</p>
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<strong>
Read more:
<a href="https://theconversation.com/nicola-willis-warns-of-fiscal-snakes-and-snails-her-first-mini-budget-will-be-a-test-of-nzs-no-surprises-finance-rules-218920">Nicola Willis warns of fiscal ‘snakes and snails’ – her first mini-budget will be a test of NZ’s no-surprises finance rules</a>
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<h2>Decent economic grades</h2>
<p>The economic numbers at home still tell a generally encouraging story:</p>
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<li><p>unemployment <a href="https://www.stats.govt.nz/indicators/unemployment-rate/">remains low at 3.9%</a>, still below the <a href="https://www.oecd.org/newsroom/unemployment-rates-oecd-updated-november-2023.htm#:%7E:text=14%2520Nov%25202023%2520%252D%2520The%2520OECD,Figure%25202%2520and%2520Table%25201">OECD average of 4.8%.</a></p></li>
<li><p>median weekly earnings from wages and salaries <a href="https://www.stats.govt.nz/news/income-growth-for-wage-and-salary-earners-remains-strong/">continued to rise</a>, by NZ$84 (7.1%) to $1,273 in the year to June</p></li>
<li><p>inflation is rising, but the rate is slowing, <a href="https://www.stats.govt.nz/news/annual-inflation-at-5-6-percent/#:%7E:text=New%2520Zealand's%2520consumers%2520price%2520index,to%2520the%2520June%25202023%2520quarter.">falling to 5.6%</a> in the 12 months to September</p></li>
<li><p>and good or bad news according to one’s perspective, annual house price growth appears to be slowly recovering, with the <a href="https://www.qv.co.nz/price-index/">average price now $907,387</a> – still considerably down from the peak at the turn of 2022.</p></li>
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<p>It’s worth noting, too, that record net migration gain is boosting economic measurements. In the year to October 2023, 245,600 people arrived, with 116,700 departing, for an <a href="https://www.stats.govt.nz/information-releases/international-migration-october-2023/">annual net gain</a> of 128,900 people.</p>
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Read more:
<a href="https://theconversation.com/the-government-hopes-private-investors-will-fund-social-services-the-evidence-isnt-so-optimistic-218512">The government hopes private investors will fund social services – the evidence isn't so optimistic</a>
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<h2>Room for social improvement</h2>
<p>In the year to June, <a href="https://www.newshub.co.nz/home/new-zealand/2023/10/new-zealand-s-suicide-rate-increases-for-first-time-in-years.html">recorded suicides increased</a> to 565, or 10.6 people per 100,000. While an increase from 10.2 in 2022, this is still lower than the average rate over the past 14 years.</p>
<p><a href="https://www.corrections.govt.nz/resources/statistics/quarterly_prison_statistics/prison_stats_september_2023">Incarceration rates</a> began to rise again, climbing to 8,893 by the end of September, moving back towards the 10,000 figure from 2020.</p>
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Read more:
<a href="https://theconversation.com/maori-suicide-rates-remain-too-high-involving-whanau-more-in-coronial-inquiries-should-be-a-priority-217254">Māori suicide rates remain too high – involving whānau more in coronial inquiries should be a priority</a>
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<p>Child poverty appears to be <a href="https://www.stats.govt.nz/news/child-poverty-statistics-show-no-annual-change-in-the-year-ended-june-2022/">stabilising</a>, with some reports suggesting improvements in longer-term trends. While commendable, this needs to be seen in perspective: one in ten children still live in households experiencing material hardship.</p>
<p>The stock of <a href="https://www.hud.govt.nz/stats-and-insights/the-government-housing-dashboard/public-homes/">public housing</a> continues to increase. As of October, there were 80,211 public houses, an increase of 3,940 from June 2022.</p>
<p>In short, New Zealand retains some bragging rights in important areas and is making modest progress in others, but that’s far from the whole picture. The final verdict has to be: a satisfactory to good effort, but considerable room for improvement.</p><img src="https://counter.theconversation.com/content/219617/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alexander Gillespie 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>New Zealand was mostly stable in key international rankings and domestic socio-economic measures. But there are signs of slippage in some areas and not enough progress in others.Alexander Gillespie, Professor of Law, University of WaikatoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2196112023-12-13T03:58:07Z2023-12-13T03:58:07ZThere’s a glimmer of hope in the mid-year budget update, but inflation is still a big challenge<p>The federal government knows people are doing it tough. Inflation and interest rate pressures have put the cost-of-living at the forefront of voters’ minds. </p>
<p>As the <a href="https://theconversation.com/the-7-charts-that-show-australians-struggling-as-saving-falls-to-near-zero-218924">national accounts data shows</a>, disposable income has fallen. Households have been forced to run down their savings. The household savings ratio has hit its lowest level in 16 years. </p>
<p>The <a href="https://budget.gov.au/content/myefo/index.htm">mid-year budget</a> update released on Wednesday confirms this. The Mid-Year Economic and Fiscal Outlook (MYEFO) estimates the economy is expected to expand by a low 1.75% in 2023–24. It also notes inflation – although moderating – is still too high. The outlook attributes that mainly to global oil prices.</p>
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<p>There is a small glimmer of hope. The update predicts the economy will grow more strongly in 2024-25 due to rising real incomes and charts a decline in real income growth turning around in future years. </p>
<p>Hopefully that will happen. It is the only way Australian households will be able to cope with the cost of living.</p>
<h2>A key challenge for the government</h2>
<p>The challenge facing the government is that it can’t splash cash on easing cost-of-living pain without adding to inflation. Higher inflation would cause the Reserve Bank to raise its interest rate targets even further, making things worse. </p>
<p>There are ways to address the problem. Initiatives in the May budget, including measures to reduce energy and childcare costs, aimed to help households without putting pressure on inflation. The outlook notes these are still being rolled out.</p>
<p>But there are only a limited number of initiatives like this available to governments. Some are tempted to spend budget money instead. Treasurer Jim Chalmers has avoided that temptation. There’s no extra cost-of-living assistance package in this update. Instead, there is determination to rein in debt and deficit.</p>
<h2>The fine line between surplus and deficit</h2>
<p>The MYEFO 2023-24 budget balance is A$1.1 billion. That’s line ball between surplus and deficit. The balance is the difference between two much larger numbers: $685 billion in receipts and $686 billion in payments. </p>
<p>What’s more, these are estimates, not actuals. We won’t know how they turn out until the final budget outcome is released in October next year. In the meantime, we can expect another round of estimates updates in the May 2024 budget. </p>
<p>No self-respecting economist would claim it matters whether Australia has a surplus or deficit. What makes a difference to our national financial sustainability is how a government responds to the economic pressures it faces.</p>
<h2>There are challenges but overall, the outlook is ok</h2>
<p>On that measure, this is a responsible document. The revenue estimates have improved since the May budget, mainly due to global commodity prices. The government has spent little of this windfall. </p>
<p>Chalmers’ MYEFO media release says the government has returned 92% of upward revisions to revenue since the May budget. He says this means the government “will avoid $145 billion over 12 years to 2033-34 in interest costs on the debt we inherited”. </p>
<p>As a result, the forward estimates for the Australian government’s debt and deficit are lower at this point than at budget. Gross debt as a share of GDP is expected to peak at 35.4% of GDP in 2027-28, before declining.</p>
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<p>There is an estimated $9.8 billion in savings, including already announced reductions in infrastructure spending. That was a good measure, because in addition to improving the budget bottom line it will have a direct impact on lowering building costs.</p>
<p>Offsetting those savings are a raft of new spending measures arising from decisions taken since the budget. They include defence support for Ukraine, aged care reform, additional money for ongoing COVID responses, new pharmaceutical benefit scheme listings, national water grid, housing and several hundred more. Many have already been announced. </p>
<p>The report gathers them together and adds them up. They add $1.1 billion to spending in 2023-23, $2.7 billion in 2024-25.</p>
<h2>There are big announcements ahead …</h2>
<p>Sadly, in a blow for budget transparency, there is still a line for decisions taken but not yet announced. We don’t know what decisions these are, but they are significant – the estimates start at $270 million in 2023-24 and rise to $1.8 billion in 2026-27. </p>
<p>It is <a href="https://theconversation.com/16-billion-of-the-myefo-budget-update-is-decisions-taken-but-not-yet-announced-why-budget-for-the-unannounced-173654">impossible to tell</a> what this spending is for. If the government were to reverse those decisions between now and the next budget update, we will never know. </p>
<p>On the plus side, this mid-year report has been released at roughly the mid-point of the financial year. Some previous reports have come out at different times – ranging from mid-October to late January (the latest it can be released under the Charter of Budget Honesty Act).</p>
<p>Chalmers has in the past expressed his desire to move back to a more regular and predictable budget processes. A MYEFO in December is normal and regular. </p>
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Read more:
<a href="https://theconversation.com/budget-update-forecasts-deficit-of-1-1-billion-this-financial-year-219799">Budget update forecasts deficit of $1.1 billion this financial year</a>
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<img src="https://counter.theconversation.com/content/219611/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Bartos 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>The economy is expected to grow and there are other positive signs ahead but the mid-year economic update has revealed the government will need to keep inflation in check.Stephen Bartos, Professor of Economics, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2197992023-12-12T23:37:15Z2023-12-12T23:37:15ZBudget update forecasts deficit of $1.1 billion this financial year<p>The federal budget is headed for a small $1.1 billion deficit this financial year, according to the update released by Treasurer Jim Chalmers and Finance Minister Katy Gallagher on Wednesday morning. </p>
<p>This is an improvement of $12.8 billion compared to the deficit forecast in the May budget. </p>
<p>It suggests the final figure for the financial year might end up a surplus. If so, that would be the second year the Albanese government delivered a surplus. </p>
<p>Anxious to continue the fight against inflation, the government has not used the update to provide any cost-of-living relief or make new announcements. It has concentrated on improving the budget bottom line. </p>
<p>It has returned 92% of the upward revisions in revenue since the budget to the bottom line. </p>
<p>The Mid-Year Economic and Fiscal Outlook (MYEFO) shows deficits across all four years of the forward estimates. But over these years, the forecast underlying cash balance improves by a cumulative $39.5 billion compared to what was projected in the May budget. </p>
<p>Total receipts are projected to be $67.3 billion higher than the budget forecast. A strong labour market and high commodity prices have contributed to the improved revenue.</p>
<p>A further $9.8 billion has been identified in savings and reprioritisations since the budget. This has brought the total to nearly $50 billion since the election. A large part of the current savings comes from cuts and delays in the infrastructure program.</p>
<p>Net new spending since the budget is $650 million in 2023-24. </p>
<p>Chalmers and Gallagher said in a statement that in face of high but moderating inflation, high interest rates and global uncertainty the Australian economy was slowing. </p>
<p>“Growth is forecast to moderate in the near-term as these pressures weigh on domestic activity.” they said. </p>
<p>The economy is expected to grow by 1.75% in 2023-24 before regaining momentum in 2024-25, when improved real incomes are expected to support a recovery in household consumption. </p>
<p>While global oil prices have put upward pressure on inflation in the near-term, Treasury has not changed its forecast timetable for inflation’s return to the 2-3% target band. </p>
<p>The ministers said: “We know many Australians are doing it very tough, but welcome and encouraging progress is being made […] in the fight against inflation and in the economy more broadly”.</p>
<p>Unemployment, which was 3.7% in October, is forecast to rise to 4.25% by the end of this financial year. The unemployment forecast hasn’t changed since the budget.</p>
<p>Gross debt as a share of GDP is expected to peak at 35.4% of GDP in 2027-28, then decline to 32.1% by the end of the medium term.</p><img src="https://counter.theconversation.com/content/219799/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan 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>The Mid-Year Economic and Fiscal Outlook (MYEFO) shows the federal budget is headed for a small $1.1 billion deficit this financial year, according to the update.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2180482023-11-17T16:36:02Z2023-11-17T16:36:02ZSouth Africa’s police are losing the war on crime – here’s how they need to rethink their approach<p>South Africa’s <a href="https://www.youtube.com/watch?v=pzyqFKC2x1Q">crime statistics</a> for the third quarter of 2023 show that people continue to face a serious problem of violent crime, especially murder and attempted murder. The country’s <a href="https://issafrica.org/events/understanding-escalating-levels-of-murder-in-south-africa">per capita murder rate for 2022/23</a> was the highest in 20 years at 45 per 100,000 (a 50% increase compared to 2012/13).</p>
<p>In response to this crisis, the South African Police Service has reconfigured its <a href="https://pmg.org.za/committee-meeting/37753/">policing strategies and plans</a>. Yet, these approaches offer very little innovation. They mostly reaffirm the way the police have typically pursued policing for the past three decades – fighting a <a href="https://www.tandfonline.com/doi/abs/10.1080/03057070.2018.1503831">“war” on crime</a> and <a href="https://ewn.co.za/topic/operation-fiela">“sweeping away”</a> criminals. </p>
<p>In my view the police have adopted unsuitable crime fighting strategies. This is a “war” the police can’t win on their own, because violent crime is a <a href="https://www.researchgate.net/publication/326462816_WHY_IS_CRIME_IN_SOUTH_AFRICA_SO_VIOLENT_Updated_Rapid_Evidence_Assessment_on_Violent_Crime_in_South_Africa">complex phenomenon</a>. It requires <a href="https://journals.co.za/doi/pdf/10.10520/EJC47702">whole-of-government</a> and <a href="https://www.csir.co.za/sites/default/files/Documents/Making%20South%20Africa%20Safe.pdf">whole-of-society</a> approaches. Government departments, civil society groups and the private sector should pool resources and <a href="https://gh.bmj.com/content/7/7/e009972">work together</a> in a co-ordinated manner. They must be guided by a common plan. Otherwise crime prevention efforts will be piecemeal, lacking effectiveness.</p>
<h2>Determinants and complexity of violent crime</h2>
<p>The scholarly literature on violent crime in South Africa, including <a href="https://www.researchgate.net/publication/326462816_WHY_IS_CRIME_IN_SOUTH_AFRICA_SO_VIOLENT_Updated_Rapid_Evidence_Assessment_on_Violent_Crime_in_South_Africa">my research</a>, indicates that interpersonal violence is typically the outcome of a combination of risk factors over time. </p>
<p>One of them is the idea that violence is a legitimate means to resolve conflict between people. </p>
<p>Another is <a href="https://www.researchgate.net/publication/326462669_Towards_a_more_comprehensive_understanding_of_the_direct_and_indirect_determinants_of_violence_against_women_and_children_in_South_Africa_with_a_view_to_enhancing_violence_prevention">childhood experiences</a> of violence.</p>
<p>Socio-economic elements, such as poverty, unemployment and inadequate living conditions, underpin violence, mainly for <a href="https://journals.sagepub.com/doi/abs/10.1177/1097184X17696171?journalCode=jmma">younger men</a>. Feelings of stress, frustration and humiliation, combined with substance abuse (chiefly alcohol), inequitable gender norms and the availability of weapons, especially <a href="https://www.dw.com/en/south-africa-spike-in-gun-crime-angers-citizens/a-64903654">firearms</a>, often results in violent behaviour.</p>
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Read more:
<a href="https://theconversation.com/south-africa-wont-become-less-violent-until-its-more-equal-103116">South Africa won't become less violent until it's more equal</a>
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<p>Given what studies say about the determinants of violence, I predicted during the COVID-19 pandemic in 2020 that South Africa would soon face a <a href="https://www.saferspaces.org.za/blog/entry/the-coming-crime-catastrophe">crime catastrophe</a>. The pandemic and lockdown regulations had increased poverty, unemployment and food insecurity. This would exacerbate existing risk factors for violence, such as:</p>
<ul>
<li><p>domestic abuse </p></li>
<li><p>learners dropping out of school </p></li>
<li><p>diminishing prospects of meaningful jobs, especially for young, marginalised men. </p></li>
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<p>In 2021/22 there was a significant <a href="https://www.saps.gov.za/services/downloads/Annual-Crime-2021_2022-web.pdf">increase</a> in all categories of violent crime. </p>
<p>Since then there’s been no reduction in these risks, especially <a href="https://www.dailymaverick.co.za/article/2023-10-06-eight-million-hungry-children-new-report-about-the-shocking-impact-of-poverty-on-young-south-africans/">food insecurity</a>, <a href="https://www.news24.com/fin24/economy/sa-sees-job-growth-but-its-cold-comfort-for-millions-of-unemployed-youth-left-behind-20231115">youth unemployment</a>, <a href="https://www.unicef.org/southafrica/press-releases/crime-statistics-devastating-violence-against-children-and-women-continues">child abuse</a> and the <a href="https://businesstech.co.za/news/government/723902/south-africas-shocking-school-dropout-rate-revealed/">school dropout rate</a>. The <a href="https://issafrica.org/events/understanding-escalating-levels-of-murder-in-south-africa">murder rate per capita</a> has increased from 33.5 per 100,000 during the COVID-19 period (2020/21) to 45 per 100,000 in 2022/23. </p>
<h2>Police and the prevention of violent crime</h2>
<p>Even though the police are <a href="https://www.ojp.gov/ncjrs/virtual-library/abstracts/police-work-social-organization-policing">not able</a> to do anything directly about many of the underlying risk factors for violence, <a href="https://www.police1.com/chiefs-sheriffs/articles/law-enforcement-strategies-to-reduce-violence-wItHuxvLO0IHLEEk/">studies</a> have shown that specific policing interventions can make a difference in reducing violent crime. </p>
<p>The police can work closely with communities to devise <a href="https://ojjdp.ojp.gov/model-programs-guide/literature-reviews/community-oriented-problem-oriented-policing">cooperative solutions</a> to crime problems. They can also collect and use relevant <a href="https://www.osce.org/files/f/documents/d/3/327476.pdf">intelligence</a> to design and implement <a href="https://issafrica.org/crimehub/analysis/research/evidence-based-policing-for-south-africa-an-introduction-for-police-officers-researchers-and-communities">evidence-based</a> crime prevention actions. These should focus on the areas where criminal offending is most <a href="https://time.com/6227552/hotspot-policing-crime-effectiveness/">concentrated</a>, and on the <a href="https://www.gov.scot/publications/works-reduce-crime-summary-evidence/pages/6/">situations</a> that tend to drive that behaviour. </p>
<p>Interventions require a <a href="https://www.policechiefmagazine.org/successfully-reducing-violent-crime-with-multimodal-community-and-police-engagement-interventions/">competent, adequately resourced and professional</a> police organisation and a fair and effective <a href="https://www.oecd-ilibrary.org/effectiveness-and-fairness-of-judicial-systems_5jfrmmrhkcs2.pdf">criminal justice system</a>.</p>
<p>Since the 1990s the work of the police has included community-oriented approaches. <a href="https://www.police.govt.nz/resources/2008/community-policing-lit-review/elements-of-com-policing.pdf">Best practice</a> is for police to treat community safety groups as equal partners. Solutions to crime problems are <a href="https://www.policechiefmagazine.org/from-crisis-to-community-policing/">co-created</a>. </p>
<p>But the police’s approach has been the converse. They have <a href="https://www.groundup.org.za/article/community-policing-forums-should-be-holding-police-accountable/">co-opted</a> community safety groups, such as <a href="https://crimehub.org/iss-today/are-south-africas-community-police-forums-losing-their-impartiality">community police forums</a> and neighbourhood watches, to be <a href="https://www.saps.gov.za/newsroom/msspeechdetail.php?nid=45270">force multipliers</a>. Studies have shown that such a method is often <a href="https://www.ojp.gov/pdffiles/171676.pdf">ineffective</a>.</p>
<p>For the past three decades, South African police have prioritised <a href="https://www.tandfonline.com/doi/abs/10.1080/03057070.2018.1503831">militarised policing approaches</a>, such as <a href="https://www.saps.gov.za/newsroom/msspeechdetail.php?nid=47240">Operation Shanela</a> (“to sweep” in isiZulu). They encourage police to be more <a href="https://www.timeslive.co.za/sunday-times/news/2023-11-12-cele-doubles-down-on-cops-right-to-use-deadly-force/">forceful</a> in their interactions with alleged criminals.</p>
<p>There is very <a href="https://www.pnas.org/doi/10.1073/pnas.1805161115">little evidence</a> to suggest that militarised policing brings down violent crime rates. Instead, it can erode public trust in the police. This is certainly evident in South Africa, where only <a href="https://hsrc.ac.za/press-releases/dces/feeling-blue-changing-patterns-of-trust-in-the-police-in-south-africa/">27%</a> of the population view the police as trustworthy (from 47% in 1999). </p>
<p>Police effectiveness in combating crime has also been undermined by <a href="https://pmg.org.za/committee-meeting/37753/">declining personnel numbers</a>. In 2018, there were 150,639 police personnel, but this is now 140,048. There has also been a substantial decline in the <a href="https://www.news24.com/news24/politics/90-drop-in-police-reservists-devastating-to-high-crime-levels-20231114">police reserve force</a>. </p>
<p>High levels of crime have placed <a href="https://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S1991-38772020000100003">considerable pressure</a> on the criminal justice system too. Conviction rates for violent crime are very low. For example, between 2019/20 and 2021/22, police recorded 66,486 murder cases. Of these, only 8,103 (12%) resulted in a guilty verdict.</p>
<h2>What can be done?</h2>
<p>The good news is that the government does not exclusively depend on policing plans to tackle crime. It has also developed multi-departmental and evidence-based strategies and plans to prevent crime. These are derived from Chapter 12 of the <a href="https://www.nationalplanningcommission.org.za/assets/Documents/NDP_Chapters/devplan_ch12_0.pdf">National Development Plan</a>. It calls for: </p>
<ul>
<li><p>police to be more professional, demilitarised and work in partnership with communities</p></li>
<li><p>an improved criminal justice system </p></li>
<li><p>an integrated crime prevention strategy. </p></li>
</ul>
<p>In 2022 the cabinet approved the <a href="http://www.policesecretariat.gov.za/downloads/reports/Final%20Approved%20Integrated%20Crime%20Violence%20Prevention%20Strategy.pdf">Integrated Crime and Violence Prevention Strategy</a>. It seeks to achieve a whole-of-government and whole-of-society approach given the multi-dimensional nature of the risk factors that drive violent crime. Furthermore, this strategy encourages government and other elements of society to jointly address common crime problems and collaboratively determine prevention strategies, especially at the community level. </p>
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Read more:
<a href="https://theconversation.com/south-africans-are-feeling-more-insecure-do-ramaphosas-plans-add-up-176991">South Africans are feeling more insecure: do Ramaphosa's plans add up?</a>
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<p>There was also the recognition that various government departments (and not just the police) needed to work closely with civil society and the private sector to drive down crime levels.</p>
<p>The problem is that the implementation of strategy is in limbo. No government agency has been willing to take responsibility for it. That’s because there is no direct budgetary allocation, given the highly <a href="https://businesstech.co.za/news/budget-speech/664953/4-major-risks-that-godongwana-needs-to-address-in-the-2023-budget-next-week/">constrained government purse</a>. </p>
<p>High levels of crime and low levels of policing have substantial <a href="https://www.news24.com/citypress/business/the-crippling-cost-of-violence-20221125#:%7E:text=Violent%20crimes%20cost%20South%20Africa%20about%2019%25%20of%20GDP%20annually.">negative effects</a> on economic performance. So investing adequate resources to carry out the Integrated Crime and Violence Prevention Strategy will not only reduce violent crime, but also contribute to economic growth.</p><img src="https://counter.theconversation.com/content/218048/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Guy Lamb receives funding from Norwegian Research Council. He is a Commissioner on South Africa's National Planning Commission. </span></em></p>Government departments, civil society groups and the private sector should pool resources and work together in a co-ordinated manner to prevent violent crime.Guy Lamb, Criminologist / Senior Lecturer, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2129162023-11-16T10:40:54Z2023-11-16T10:40:54ZJob hunting: why taking regular breaks is vital for your well-being and success<figure><img src="https://images.theconversation.com/files/546420/original/file-20220927-20-o5ruuf.jpg?ixlib=rb-1.1.0&rect=5%2C7%2C1272%2C841&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Aller au café avec des amis, un exemple de pause utile.
</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Coffee_break_(3457656569).jpg">Wikimedia commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>In many activities in life, including studying, working, or even job hunting, people need to take regular breaks in order to replenish their energy levels.</p>
<p>In addition to real-life experience, this biological necessity is well documented by a vast body of research. Numerous studies agree on the benefits to employees’ well-being of <a href="https://doi.org/10.1016/j.jvb.2022.103747">recuperation time</a>) at work (e.g., taking breaks during the day), <a href="https://psycnet.apa.org/doi/10.1037/ocp0000079">outside work hours</a> (e.g., physical exercise), of disconnecting from work <a href="https://doi.org/10.1177/0149206319864153">during your free time</a>, and of course, social activities (e.g., time spent with loved ones).</p>
<p>Taking regular breaks can have a restorative effect not only in a professional context, but also for other important life tasks. One such activity is searching for a job, something that all of us have to face many times in the course of our lives.</p>
<h2>The all-important sense of detachment</h2>
<p>Job seeking can be strenuous, as it can involve significant amounts of rejection, stressful moments such as interviews, and thus plenty of effort and pushback to reach one’s goal. To put it another way: the search for a job is a process that takes time and consumes significant mental and physical energy.</p>
<p>Studies have been conducted across different fields to discover how people’s energy reserves are depleted in the course of particular activities, and how and if they might be recovered. The spending and recovery of energy in the course of a job search isn’t any different.</p>
<p>In a <a href="https://psycnet.apa.org/doi/10.1037/apl0000967">a 2022 study</a>, my co-authors and I determined that when job seekers are able to psychologically detach themselves from their search on a day-to-day basis, they feel refreshed, reinvigorated, and end up making more effort and securing a larger number of interviews.</p>
<p>Another way to interpret our study’s results is that it’s important to have breaks, to distract oneself from the search and not to be constantly doing job-search tasks. As with many other activities in life, recovering one’s energy is a vital part of succeeding.</p>
<p>That’s why we’ve gathered additional data to see what type of breaks job seekers – in this case, students seeking their first full-time job – are taking. They vary in length, from very short ones several times a day, such as texting friends or family, to longer breaks of 20 to 30 minutes, such as watching a TV series episode.</p>
<h2>Sport and video games</h2>
<p>We’ve noted that the most popular breaks consist of watching TV series, films and online videos, playing video games and sleeping.</p>
<p>One participant said that during an important job search week, she “tried new coffee shops, saw movies with friends, and walked around town during the nicer days”. Another participant signalled that he had “spent time learning how to programme since he is planning on developing an app idea he has on the side”; he also said he had “played a ton of video games and going to the gym”.</p>
<p>Another job seeker, however, said that these breaks didn’t take place until after receiving a first job offer:</p>
<blockquote>
<p>“I was so excited about finally getting my first offer that I spent a lot more time than usual this week relaxing with friends. I got more rest than usual and I felt more relieved than I ever have about this process. I am still interviewing with other companies, but I took time to relax by listening to music and catching up on some shows that I missed out on due to my job search and other obligations.”</p>
</blockquote>
<p>Overall, taking breaks in different ways can help distance oneself mentally from the job search, giving the body and soul the time to recharge.</p>
<h2>The role of humour</h2>
<p>In a <a href="https://www.taylorfrancis.com/chapters/edit/10.4324/9781315671659-14/humor-job-search-recruitment-serge-da-motta-veiga">2016 study</a>, I explored the role of humour in being able to distract oneself from the stress of the job search. Laughter is a way to relieve tension, and could be a behaviour that helps reduce stress.</p>
<p>For instance, people anxious about their applications could share their bad experiences in a light-hearted way with other job seekers or with career advisors as a way of learning, all the while laughing at themselves – which is to say, a way of distraction. This theory echoes the studies on humour in the workplace by Dr Vanessa Marcié, notably <a href="https://www.hbrfrance.fr/chroniques-experts/2020/05/30098-lhumour-un-puissant-mecanisme-dadaptation-face-a-la-crise/">her 2020 article</a> on humour as a coping mechanism during a crisis.</p>
<p>In summary, taking time off or disconnecting yourself is vital for success, in this case to lead a successful job search. Whatever kind of break job seekers choose, it will help them to recover and find new energy. And that has a direct impact on the job search, both in terms of the effort invested and the positive outcomes.</p>
<p>It’s equally important to note that breaks can vary in length and type but they all help ultimately to momentarily take a person’s mind off the task at hand. For some people, that will be through having a laugh about the situation with friends or other job seekers. For others, it will involve watching TV or playing video games.</p>
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<p><em>Translation from French into English by <a href="https://twitter.com/JoshNeicho">Joshua Neicho</a>.</em></p><img src="https://counter.theconversation.com/content/212916/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Serge da Motta Veiga ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>Relax: keeping your sense of humour and taking regular breaks will go a long way in helping you land a job.Serge da Motta Veiga, Professeur en Gestion des Ressources Humaines, Neoma Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2168112023-11-12T17:59:31Z2023-11-12T17:59:31ZNZ workers have few protections if their employer goes bust – fixing the Companies Act would help<p>When independent supermarket startup Supie <a href="https://www.1news.co.nz/2023/10/30/plenty-of-tears-after-supie-employees-let-go-without-pay/">went bust</a> last month, the company’s 120 employees were told they wouldn’t be paid for their last two weeks of work, or receive any of their owed annual leave pay. </p>
<p>The subsequent <a href="https://www.stuff.co.nz/business/133202256/supie-staff-told-they-may-not-receive-pay-as-company-goes-into-administration">appointment of voluntary administrators</a> again highlighted New Zealand’s limited protection for employees when their employer becomes insolvent. </p>
<p>Supie’s employees are not the first, nor will they be the last, to lose out when their employer goes under. In 2019, staff at restaurant chain Wagamama were <a href="https://www.stuff.co.nz/business/114913504/staff-struggling-to-get-what-they-are-owed-from-failed-restaurant-chain-wagamama">owed NZ$50,000</a> when the company went into liquidation. </p>
<p>In both cases, the wages were eventually paid out by someone outside the company. In the case of Wagamama, <a href="https://www.stuff.co.nz/business/115259950/workers-get-pay-out-from-wagamama-franchise-owners-in-the-united-kingdom">by the franchise head office</a> in the United Kingdom. Supie staff received their wages from an <a href="https://www.1news.co.nz/2023/11/01/supie-workers-to-receive-final-paycheque-after-anonymous-donation/">anonymous donor</a>.</p>
<p>While the loss of money for any creditor is difficult, the double impact of losing wages as well as a job is particularly hard for employees. </p>
<p>So, what is it in New Zealand’s current legislation that puts employees in this difficult situation? And what can be done to protect staff when businesses fail? </p>
<h2>The current pecking order</h2>
<p>In terms of corporate insolvencies, there are three options: <a href="https://companies-register.companiesoffice.govt.nz/help-centre/when-your-company-fails/what-happens-during-voluntary-administration/">voluntary administration</a>, <a href="https://companies-register.companiesoffice.govt.nz/help-centre/when-your-company-fails/what-happens-during-receivership/">receivership</a> and <a href="https://companies-register.companiesoffice.govt.nz/help-centre/when-your-company-fails/what-happens-during-liquidation/">liquidation</a>. </p>
<p>Liquidations are the most common form of corporate insolvency process. When this happens, the company ceases to trade and a liquidator is appointed.</p>
<p>Under the <a href="https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM319570.html">Companies Act 1993</a>, the liquidator’s role is to sell the company assets to repay unsecured creditors. In practice, only those assets not under a prior legal claim by one or more of the company’s creditors (for example, collateral used to secure a bank loan) are available to the liquidator to sell. </p>
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Read more:
<a href="https://theconversation.com/failed-nz-businesses-leave-a-trail-of-destruction-here-are-3-things-inland-revenue-could-do-to-minimise-damage-210370">Failed NZ businesses leave a trail of destruction. Here are 3 things Inland Revenue could do to minimise damage</a>
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<p>Once a liquidator has sold the company’s remaining assets, the Companies Act sets the order in which the debts are to be paid. </p>
<p>Preferential claims are to be paid before the claims of other unsecured creditors. Employees are considered preferential creditors.</p>
<p>There are five classes of preferential creditors in the Companies Act. Costs relating to the liquidation, including the liquidators’ fees, are ranked first, followed by the payment of unpaid wages and specified other amounts owed to employees. </p>
<p>Accordingly, amounts owed to employees are paid out after liquidation costs have been sorted – and only if there is any money left from the failed business. There is also a cap on what each employee can claim – currently set at $25,480 –regardless of what they are owed.</p>
<p>In practice, this means there is no guarantee employees will receive their unpaid wages when a business fails. </p>
<p>It all depends on whether there is enough money after secured creditors have accessed the assets used as collateral and the liquidator has paid their own fees. And this is often not the case.</p>
<p>Liquidators can take company directors to court for breaching their duties, such as recklessly trading. But this sort of action takes time, and there is no guarantee it will increase the amount of money available to unpaid staff. It took a decade for liquidators to <a href="https://www.nzherald.co.nz/business/mainzeal-supreme-court-judgment-directors-of-failed-firm-including-former-pm-jenny-shipley-to-pay-nearly-40m-plus-interest/NX5Y5JG5PJHWZDDRWVBWKHYUNE/">secure a final judgement</a> against the four directors of failed construction company Mainzeal. </p>
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<h2>Law changes could protect workers</h2>
<p>New Zealand’s approach to protecting workers compares badly to other countries, where government schemes bolster the protections for unpaid employee debts. Such schemes operate alongside the preferential creditor rules in corporate law. </p>
<p>For example, in the <a href="https://www.legislation.gov.au/Details/C2019C00216">Australian Corporations Act 2001</a>, unpaid wages, superannuation contributions and certain other payments owed to employees are classed as preferential debts. </p>
<p>However, there is also a nationally-funded scheme that operates as a safety net for employees, which allows them to claim up to 13 weeks of unpaid wages, annual leave and other entitlements.</p>
<p>After the scheme makes a payment to employees, it then takes the employees’ place as a preferential creditor in the liquidation. A similar scheme operates in the UK. </p>
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<strong>
Read more:
<a href="https://theconversation.com/why-is-new-zealands-labour-government-trying-to-push-through-a-two-tier-benefit-system-165615">Why is New Zealand's Labour government trying to push through a two-tier benefit system?</a>
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<p>Other options adopted in some countries include granting employee claims (capped or uncapped) “super-priority” status, which means they are paid before secured and other unsecured debts. </p>
<p>The previous New Zealand government, with support from Business New Zealand and the Council of Trade Unions, proposed introducing a <a href="https://www.stuff.co.nz/national/explained/129936463/what-the-proposed-income-insurance-scheme-would-mean-for-you">social insurance scheme</a>. </p>
<p>This would have paid up to seven months of wages at 80% of salary for most workers, funded through employee and employer contributions. But Labour eventually put the policy on ice, and the National Party has <a href="https://www.national.org.nz/government_must_dump_fatally_flawed_jobs_tax">opposed such a scheme</a>.</p>
<p>Because the government doesn’t collect the data, it is hard to say how many employees receive all or part of the amounts owing to them as preferential creditors when the company they work for fails.</p>
<p>But what is clear is that the current approach of labelling New Zealand workers privileged creditors does not guarantee they will see any money if their employers go into liquidation. The situation would be improved if New Zealand followed the best overseas examples.</p><img src="https://counter.theconversation.com/content/216811/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Trish Keeper 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>Laid-off Supie staff were paid by an anonymous donor – but many employees never get what they’re owed when a company fails. New Zealand should follow overseas examples to better protect workers.Trish Keeper, Associate professor in Commercial Law, School of Accounting and Commercial Law, Te Herenga Waka — Victoria University of WellingtonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2167522023-11-06T05:41:48Z2023-11-06T05:41:48ZAlmost 2 million Workforce Australia payments have been suspended in the past year, with devastating impact<figure><img src="https://images.theconversation.com/files/557629/original/file-20231106-17-ql7rgp.jpg?ixlib=rb-1.1.0&rect=793%2C1013%2C6478%2C3889&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/search/stressed-man?image_type=photo">Shutterstock</a></span></figcaption></figure><p>Last year the federal government replaced the jobactive employment support program with what was expected to be a more flexible and improved support system for jobseekers, Workforce Australia.</p>
<p>Yet, in the 16 months the contracted-out system has been running, almost 2 million income support payments have been suspended, affecting 70% of participants.</p>
<p>Under the new system, participants must meet a <a href="https://www.workforceaustralia.gov.au/individuals/obligations/learn/points#:%7E:text=You%20must%20meet%20any%20minimum,activities%20to%20earn%20the%20rest.">points target</a> to receive payments.</p>
<p>For example, if the default points target is 100 per month, this can be met by a minimum of four job applications (worth 5 points each) and a mix of other activities. Points targets are adjusted to 60 per month for parents and people with disabilities.</p>
<h2>Why are payments suspended?</h2>
<p>Payment suspensions are supposed to get people to comply with requirements such as attending job interviews and undertaking training, education classes or other activities to reach their points target.</p>
<p>When these criteria are not met, participants are given a two-day grace period to resolve the problem, after which payments are automatically suspended. The suspension remains until the target is met or the suspension is lifted by a job service provider. The average suspension period is four days.</p>
<p>The figure of almost 2 million payment suspensions, cited at a <a href="https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;db=COMMITTEES;id=committees%2Festimate%2F27448%2F0002;query=Id%3A%22committees%2Festimate%2F27448%2F0000%22">Senate Estimates</a> committee meeting last month, showed they have been occurring at an alarming rate since Workforce Australia started.</p>
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<a href="https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Man handing document across a desk to another person" src="https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/557635/original/file-20231106-19-klr6a9.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>
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<span class="caption">Workforce Australia participants might be required to attend a certain number of job interviews to reach their points target.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/search/unemployed-job-interview?image_type=photo&page=4">Shutterstock</a></span>
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<p>Committee member and Greens senator <a href="https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;db=COMMITTEES;id=committees%2Festimate%2F27448%2F0002;query=Id%3A%22committees%2Festimate%2F27448%2F0000%22">Janet Rice</a> highlighted concern about the high suspension rate and representatives from the Department of Employment, which runs the program, agreed it was an issue.</p>
<p>If 70% of participants have been suspended, that makes it very likely some people have lost payments multiple times. These people might be long-term unemployed due to health, disability or discrimination in the workplace.</p>
<p>Suspending payments to these already disadvantaged groups has a devastating impact because income support payments are grossly inadequate. The single person rate of JobSeeker payment is only $749.20 per fortnight, and the maximum rate of Commonwealth rent assistance is $101.07, adding up to $860.27 a fortnight.</p>
<p>Meanwhile an average share house rent in a capital city like Melbourne is $446 per fortnight - with single renters often paying double - and this leaves people without much room for delays to their income support payments.</p>
<h2>The damage caused by suspending payments</h2>
<p><a href="https://research.curtin.edu.au/businesslaw/wp-content/uploads/sites/5/2022/03/AJLE251casey.pdf">Research</a> into the impact of payment suspensions on people’s mental health shows the consequences are dire.</p>
<p>This is especially so during the current cost-of-living crisis when people have enough to worry about just paying rent, buying food or keeping a car on the road. </p>
<p>The harm caused by suspending payments is apparent in my recent analysis of the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Workforce_Australia_Employment_Services/WorkforceAustralia/Submissions">individual submissions</a> to the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Workforce_Australia_Employment_Services/WorkforceAustralia">parliamentary inquiry</a> into Workforce Australia.</p>
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Read more:
<a href="https://theconversation.com/jobseeker-rule-changes-what-you-must-do-under-the-new-points-based-activation-system-185759">JobSeeker rule changes: what you must do under the new 'points-based activation' system</a>
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<p>I coded the frequency of words relating to poor psychological wellbeing as represented in the table. Of the 69 submissions reviewed, 52 identified how payment suspensions caused high levels of stress and affected trust of the job service provider.</p>
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<p>The word-frequency results show threats to payments have a devastating effect on the mental health of people receiving unemployment payments. Many felt bullied by their job services providers.</p>
<p>The impact of suspensions is reflected in this quote from one of the submissions. As one 53-year-old woman said in her submission:</p>
<blockquote>
<p>I would ask you to consider and recognise that those of us who are reliant on this system are deprived of any means to control our circumstances. A system failure, a missed phone call, a misunderstanding or a simple lack of communication can lead to a suspension of payments.</p>
<p>The stress associated with being constantly under threat by the whims of a particular person, system faults or even a missed phone call is immeasurable. That I might be unable to eat, go to the doctor, pay for medication, buy petrol, pay bills on time (so as not to incur further costs), pay for internet/phone … is considerable and has a massive impact for those of us who are living under these unfortunate circumstances. </p>
<p>It effects our physical and emotional health, our ability to participate in our communities, our sense of future and diminishes our sense of self-worth and our accomplishments – reducing them to meaninglessness while keeping us in poverty.</p>
</blockquote>
<h2>Why is the suspension rate so high?</h2>
<p>The suspension rate is high because the criteria people must meet to receive payments are unrealistic, and because job service providers make mistakes.</p>
<p>Some people can’t meet targets or report points under the points model on time, or don’t attend appointments because they’ve been given insufficient notice or the appointments have been scheduled at times they are already working or in training.</p>
<p>In <a href="https://www.julianhillmp.com/NESA-Conference_2023.html">a speech</a> last month, Labor MP Julian Hill, who heads the parliamentary inquiry into Workforce Australia, told a conference the powers of the system’s providers to make decisions affecting payments was a “major false economy”.</p>
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Read more:
<a href="https://theconversation.com/victims-now-know-they-were-right-about-robodebt-all-along-let-the-royal-commission-change-the-way-we-talk-about-welfare-209216">Victims now know they were right about robodebt all along. Let the royal commission change the way we talk about welfare</a>
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<p>This “false economy” of payment suspensions has been a fixture of job services requirements for nearly two decades.</p>
<p>Workforce Australia was meant to have addressed this with the points model. Instead, the points reporting is onerous and there is no evidence it improves the employment prospects of people who have been struggling to find work.</p>
<h2>The next steps</h2>
<p>When the parliamentary inquiry into Workforce Australia submits its report this month, it is likely to recommend big changes including returning and payment suspension decisions to the government’s former Human Services department, Services Australia.</p>
<p>If that happens, it will be vital to move swiftly. </p>
<p>As was the case with the former government’s highly discredited and unlawful automated debt assessment and recovery system, <a href="https://robodebt.royalcommission.gov.au/">Robodebt</a>, the widespread use of payment suspensions is unfair and causes acute distress to people already surviving on inadequate income support.</p><img src="https://counter.theconversation.com/content/216752/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simone Casey commenced employment with Economic Justice Australia, a peak organisation for community legal centres providing specialist advice to people on their social security issues and rights, after completing the research for this article.</span></em></p>Unrealistic criteria and poor communication are causing people who need it most to lose an important income support.Simone Casey, Research Associate, Centre for People, Organisation and Work, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2154342023-10-22T19:01:26Z2023-10-22T19:01:26ZHere’s what happens to workers when coal-fired power plants close. It isn’t good<p>When Australia’s dirtiest coal-fired power plant, <a href="https://theconversation.com/hazelwood-power-station-from-modernist-icon-to-greenhouse-pariah-75217">Hazelwood</a> in Victoria, closed in 2017, Australian authorities were blind to the collateral damage.</p>
<p>Closing a plant that accounted for a fair chunk of Australia’s greenhouse gas emissions would help bring emissions down, but the costs to the displaced workers were unknowable.</p>
<p>How many of them would lose income, and for how long? How many of them would earn mere fractions of what they used to earn years into the future?</p>
<p>Twelve coal-fired plants closed between 2010 and 2020, and now a deep dive into the tax records of workers in that industry provides us with the first systematic insight into what happened.</p>
<p>The study we carried out for the e61 Institute along with colleague Lachlan Vass examined taxation microdata to track the <a href="https://e61.in/">earnings trajectories</a> of Australians who received redundancy payments between 2010 and 2020 by industry.</p>
<p>Our study, <a href="https://e61.in/">published this morning</a>, finds that on average across all industries the workers made redundant earned around 43% less in the following year.</p>
<h2>Incomes plummet by two-thirds</h2>
<p>But workers made redundant in coal-fired power plants did much worse than the overall average. They earned 69% less in the year after they lost their jobs, earning a mere third of what they had.</p>
<p>Some of the loss would have been due to earning less in new jobs, and some of it would have been due to working fewer hours in new jobs. The tax data doesn’t enable us to tell which is which. Both would be important.</p>
<p>And for workers who lost jobs in coal-fired power plants, the effects lingered.</p>
<p>Four years after being made redundant, the workers in coal-fired power plants earned 50% less. On average across all industries, the workers made redundant earned only 29% less.</p>
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<h2>Why power stations workers do badly</h2>
<p>There are at least four reasons why the incomes of displaced coal-fired power station workers are likely to be lower than the incomes of other displaced workers.</p>
<p>One is that many coal-fired power plant workers possess highly job-specific skills (related to operating specialist equipment) that aren’t readily transferable to other jobs, or at least not to other jobs in that location.</p>
<p>Another is that many coal-fired power plant workers derive high wages from strong union representation, meaning they are likely to earn less if they switch to less-unionised sectors.</p>
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Read more:
<a href="https://theconversation.com/bad-news-closing-coal-fired-power-stations-costs-jobs-we-need-to-prepare-113369">Bad news. Closing coal-fired power stations costs jobs. We need to prepare</a>
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<p>Yet another is that coal-fired power plants are often a major source of local employment and provide support to other employers, meaning that when they close the overall unemployment rate in their region <a href="https://theconversation.com/bad-news-closing-coal-fired-power-stations-costs-jobs-we-need-to-prepare-113369">increases</a>, making it hard for the workers they displace to get good jobs unless they move.</p>
<p>And another is that they are usually older. Bureau of Statistics data suggests that in 2010 55% of workers in coal-fired power plants were aged 45 or older compared to 35% in the economy at large.</p>
<p>Workers aged 40 and over do much worse after redundancies than younger workers, and workers in coal-fired power plants even more so.</p>
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<h2>The case for special support</h2>
<p>Another <a href="https://e61.in/">18</a> coal-fired power plants are set to close in coming decades. Our study suggests that while these closures will benefit the nation as a whole, helping fight the existential threat of global warming, they may impose foreseeable and long-lasting costs on an identifiable group of workers.</p>
<p>Half a century ago when Prime Minister Gough Whitlam slashed tariffs on imports by 25% in an effort to fight the lesser threat of double-digit inflation, he extended <a href="https://theconversation.com/how-a-secret-plan-50-years-ago-changed-australias-economy-forever-in-just-one-night-209378">special support</a> to those the decision would put out of work.</p>
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Read more:
<a href="https://theconversation.com/how-a-secret-plan-50-years-ago-changed-australias-economy-forever-in-just-one-night-209378">How a secret plan 50 years ago changed Australia's economy forever, in just one night</a>
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<p>Whitlam offered every displaced worker retraining and “a weekly amount equal to his [sic] average wage in the previous six months until he obtains or is found suitable alternative employment”.</p>
<p>Opponents of this sort of targeted support point out that the number of workers set to lose jobs from coal-fired plant closures is minuscule compared to the <a href="https://www.abs.gov.au/statistics/labour/jobs/job-mobility/latest-release">millions</a> of workers who leave jobs for other reasons every year.</p>
<p>But there is something different about losing a job when it is the result of a government decision, especially one that targets a particular geographic region.</p>
<p>We now need a national conversation on whether special support is warranted for those we know the move to net zero will hurt.</p><img src="https://counter.theconversation.com/content/215434/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dan Andrews receives funding from the Susan McKinnon Foundation via the e61 Institute.</span></em></p><p class="fine-print"><em><span>Elyse Dwyer is affiliated with the e61 Institute.</span></em></p>Four years after being made redundant, workers in coal-fired power stations made redundant make only one half of what they used to.Dan Andrews, Visiting Fellow and Director – Micro heterogeneity and Macroeconomic Performance program, Crawford School of Public Policy, Australian National UniversityElyse Dwyer, Researcher, Department of Economics, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2130222023-10-11T13:42:31Z2023-10-11T13:42:31ZMale domestic workers in South Africa – study sheds light on the experiences of Malawian and Zimbabwean migrants<p>An estimated <a href="https://journals.uj.ac.za/index.php/The_Thinker/article/view/2672/1644">800,000 people work as domestic workers</a> in South Africa. Most are black women from marginalised backgrounds. It’s therefore not surprising that the bulk of the literature about domestic work focuses on females performing cleaning, cooking and care work. What’s missing in debates about domestic workers’ job-related experiences and relationships with their employers is the experiences of men performing domestic work, a job traditionally linked to <a href="https://www.jstor.org/stable/24713312">femininity</a>. </p>
<p>However, paid domestic work in South Africa hasn’t always been dominated by women. In the 1880s when the <a href="https://books.google.co.za/books/about/New_Babylon_New_Nineveh.html?id=DiDtAAAAMAAJ&redir_esc=y">mining industry</a> was being established in Johannesburg, black men, rather than women, were the preferred servants in white households. Known as <a href="https://books.google.co.za/books/about/From_Servants_to_Workers.html?id=ha_3GUYK6FwC&printsec=frontcover&source=kp_read_button&hl=en&redir_esc=y#v=onepage&q=houseboy&f=false">houseboys</a>, they cooked, cleaned, nursed and cared for white colonial families.</p>
<p>But over the next decade the landscape of domestic work underwent significant changes. This was due to a few factors, among them:</p>
<ul>
<li><p>a scarcity of labour in the mines, which drew black men away from domestic roles to join the <a href="https://www.sahistory.org.za/article/brief-history-domestic-service-south-africa">mining sector</a> </p></li>
<li><p>the increasing <a href="https://www.sahistory.org.za/article/brief-history-domestic-service-south-africa">urbanisation of black women</a> </p></li>
<li><p>racial stereotypes about black men as <a href="https://www.jstor.org/stable/2637313">sexually aggressive or promiscuous</a>.</p></li>
</ul>
<p>A small proportion of men still work as domestic workers, however. Some are <a href="https://www.ilo.org/wcmsp5/groups/public/---africa/---ro-abidjan/---ilo-pretoria/documents/vacancynotice/wcms_789648.pdf">migrants</a>. Due to South Africa’s relative stability and economic opportunities, there has been <a href="https://www.migrationpolicy.org/article/south-africa-immigration-destination-history">an increase in migration</a> from countries like Eswatini, Lesotho, Malawi, Zimbabwe and Mozambique since apartheid ended in 1994. The migrants come seeking education, employment and improved livelihoods. They rely on friends and family already in South Africa <a href="https://link.springer.com/chapter/10.1007/978-3-030-92114-9_2">to find jobs</a>. </p>
<p>While African migrant women from poor backgrounds often find work in <a href="https://unctad.org/system/files/official-document/edar2018_BP1_en.pdf">domestic service or the hospitality sectors</a>, most migrant men work as <a href="https://www.sahistory.org.za/sites/default/files/2019-05/20767_mangezvo_xenophobic_2015.pdf">gardeners, painters or security guards</a>. Some Malawian and Zimbabwean male migrants work as <a href="https://www.sahistory.org.za/sites/default/files/2019-05/20767_mangezvo_xenophobic_2015.pdf">waiters or domestic workers</a>, jobs that are traditionally associated with women. </p>
<h2>Exploring unfamiliar territory</h2>
<p>As a researcher of domestic work in South Africa, I noticed that few studies had focused on male migrants performing domestic work in South Africa. Consequently, such work is commonly viewed as an employment arrangement involving affluent female employers and black female domestic workers from marginalised backgrounds. The intersections of race, class and gender between employers and domestic workers often lead to <a href="https://repository.up.ac.za/bitstream/handle/2263/74795/Masterson_Domestic_2019.pdf?sequence=1">unequal power relations and economic exploitation</a> entrenched within the employment relationship. </p>
<p>In my study, I examined <a href="https://journals.uj.ac.za/index.php/The_Thinker/article/view/2677">the experiences of migrant male domestic workers in Johannesburg</a>, with the aim of shedding some light on their duties and working conditions. </p>
<p>A male Malawian domestic worker employed by an acquaintance referred me to other male domestic workers in Johannesburg. Interviews were conducted with six male Malawian and four male Zimbabwean domestic workers employed by affluent white employers in Johannesburg. All had been employed for more than five years. </p>
<p>Migrant men’s experiences add a new layer of complexity to the study of domestic work, where complex intersections of class, race and gender occur. </p>
<h2>Migrant male domestic workers in South Africa</h2>
<p>My study showed that domestic work offered a viable employment path for men. </p>
<p>They faced similar challenges to their <a href="https://www.academia.edu/13215366/_Help_somebody_who_help_you_The_Effect_of_the_Domestic_Labour_Relationship_on_South_African_Domestic_Workers_Ability_to_Exercise_their_Rights">female counterparts</a>. These included long working hours, a paternalistic employer-employee dynamic, and a marginalised job status.</p>
<p>The respondents said they had an array of indoor and outdoor responsibilities. Indoors, their tasks encompassed cleaning and tidying their employers’ residences. They also handled laundry and ironing, alongside duties such as grocery shopping and meal preparation.</p>
<p>Outdoors, their responsibilities extended to garden maintenance, swimming pool upkeep, pet waste disposal, cleaning outdoor grilling areas (braais), and sweeping driveways. They were also entrusted with securing the homes and taking care of pets when their employers were away. </p>
<p>The daily life of male live-in domestic workers was much the same as <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_230837.pdf">live-in female domestic workers</a>. The working day started at 06:30, preparing breakfast for employers. Once employers had left for work, they cleaned the house, prepared lunch, did laundry and attended to the garden.</p>
<p>The long working day often ended at 20:00 after dinner was prepared for employers. Most weekends were spent on additional piece jobs, working as gardeners or painters for others.</p>
<p>While the homes of employers were opulent, male domestic workers, just like their female counterparts, lived in small rooms in the back yard, hidden away from the employers’ gaze, as other researchers have <a href="https://www.jstor.org/stable/3514408?seq=1">also found</a>. The one-room accommodation was often equipped with basic furniture, differing little from the <a href="https://books.google.co.za/books?hl=en&lr=&id=c89wfLEahEIC&oi=fnd&pg=PR9&dq=living+quarters+of+domestic+workers+apartheid&ots=oumA3GgaGq&sig=Cjco7oSLcK6vGAgKpM_kgF0HTzQ&redir_esc=y#v=onepage&q=living%20quarters&f=false">squalid living quarters of domestic workers during apartheid</a>.</p>
<p>The men said they considered their wages reasonable. They earned on average between R5,000 (US$260) and R8,000 (US$416) a month. This was much higher than <a href="https://personal.nedbank.co.za/learn/blog/domestic-workers-minimum-wage.html#:%7E:text=The%20minimum%20wage%20for%20domestic%20workers%20in%202023&text=Employing%20someone%20for%20more%20than,with%20the%20Department%20of%20Labour.">the minimum wage of R4,067</a> (US$216) for a domestic worker working eight hours a day, five days a week in South Africa. Most said they could engage in wage negotiations, which enabled them to improve their wellbeing and that of their families.</p>
<p>None of the male domestic workers in this study had written employment contracts with their employers, or were members of a trade union, such as the <a href="http://www.sadsawu.com/">South African Domestic Service and Allied Workers Union</a>. Work contracts need to be renewed every few years, which is costly and time consuming. Job security is precarious. </p>
<h2>The recurring issues of domestic work</h2>
<p>In South Africa, domestic work continues to be associated with <a href="https://journals.uj.ac.za/index.php/The_Thinker/article/view/2672/1644">marginalised black individuals</a>, perpetuating a historical and societal imbalance. </p>
<p>Paid domestic work continues to occupy a low-status position. No formal qualifications and little specialised expertise are required. Domestic workers’ contributions to the functioning of households are essential but frequently taken for granted, as other studies have <a href="https://muse.jhu.edu/book/42905/">also confirmed</a>. </p>
<p>Despite the <a href="https://www.pulp.up.ac.za/edited-collections/exploited-undervalued-and-essential-domestic-workers-and-the-realisation-of-their-rights">legislation</a>, domestic workers work long hours and perform physically demanding work. While male domestic workers in this study could negotiate better working conditions and pay, others might not be successful, and might remain in a precarious working environment. </p>
<p>Job security is not assured, a vulnerability most <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---migrant/documents/publication/wcms_535598.pdf">migrant domestic workers</a> experience. </p>
<p><a href="https://www.ilo.org/wcmsp5/groups/public/---africa/---ro-abidjan/---ilo-pretoria/documents/vacancynotice/wcms_789648.pdf">Practical protection remains constrained</a>. For instance, migrant domestic workers often encounter difficulties when seeking healthcare.</p>
<p>To safeguard this group from exploitation and elevate their overall livelihoods, regulators, enforcement agencies and trade unions must protect and recognise all domestic workers, including migrants, in South Africa.</p><img src="https://counter.theconversation.com/content/213022/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David du Toit 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>Paid domestic work has a low status in South Africa. The labour of domestic workers is often undervalued and unrecognised.David du Toit, Sociology Lecturer, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2146442023-10-04T19:04:37Z2023-10-04T19:04:37ZPlease, don’t bring back the Commonwealth Employment Service<figure><img src="https://images.theconversation.com/files/551958/original/file-20231004-27-uyrkaz.png?ixlib=rb-1.1.0&rect=121%2C344%2C1953%2C1005&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://recordsearch.naa.gov.au/SearchNRetrieve/Interface/DetailsReports/PhotoDetail.aspx">National Archives of Australia</a></span></figcaption></figure><p>There’s talk of bringing back Australia’s Commonwealth Employment Service.</p>
<p>The Community and Public Sector Union has launched a <a href="https://www.cpsu.org.au/CPSU/Content/Media_releases/CPSU_launches_campaign_Bring_Back_CES.aspx">campaign</a>, the parliament has begun an <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Workforce_Australia_Employment_Services/WorkforceAustralia">inquiry</a> into the appropriateness of the present system of outsourcing employment services, and the government’s employment white paper has been <a href="https://treasury.gov.au/employment-whitepaper/final-report">deeply critical</a> of the system we have at the moment.</p>
<p>The Commonwealth Employment Service was itself the result of Australia’s first <a href="https://www.billmitchell.org/White_Paper_1945/index.html">employment white paper</a> in 1945, which wanted a service designed, in its words:</p>
<ul>
<li><p>to bring to the notice of men and women seeking employment the full range of opportunities, and in particular to find employment offering scope for their abilities</p></li>
<li><p>to enable employers to draw upon suitable labour throughout the Commonwealth</p></li>
<li><p>to provide assistance where necessary to enable employees to move to where employment is available.</p></li>
</ul>
<p>It staffed offices throughout the country in which workers wanting to be matched with jobs would thumb through index cards and seek advice from expert job matchers.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=388&fit=crop&dpr=1 600w, https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=388&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=388&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=488&fit=crop&dpr=1 754w, https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=488&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/551964/original/file-20231004-23-p8uwar.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=488&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"></span>
<span class="attribution"><span class="source">National Archives of Australia</span></span>
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<p>The service closed in 1998 when the Howard government decided to outsource it to private job providers who would be <a href="https://academic.oup.com/book/9600/chapter-abstract/156645791?redirectedFrom=fulltext">paid for performance</a>.</p>
<p>It hasn’t worked as planned.</p>
<p>The September 2023 white paper says it is seen as “highly transactional and poorly tailored to the diverse and complex needs of people who use it”.</p>
<p>Services were thought to: </p>
<blockquote>
<p>do little to support job seekers and build their capabilities, with one stakeholder arguing that national employment services had failed to keep those people at the highest risk of disadvantage connected with labour markets, let alone in paid employment.</p>
</blockquote>
<p>A handful of corporations now dominate the system, raking in large profits while <a href="https://www.thesaturdaypaper.com.au/news/politics/2023/08/26/exclusive-millions-skimmed-government-welfare-contracts#hrd">arguably failing in their obligations</a>.</p>
<p>Treasurer Jim Chalmers has told The Conversation’s <a href="https://theconversation.com/politics-with-michelle-grattan-treasurer-jim-chalmers-on-jobs-and-work-214643">Michelle Grattan</a> he wants to reform the system and he will be using the insights of the parliamentary committee.</p>
<p>But my PhD research into Australia’s employment services suggests putting things back to how they were would be a bad idea, for two reasons.</p>
<p>First, it would require commitment from the Commonwealth and resources that have been lacking for decades. The government used to be able to do more.</p>
<figure>
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<p>Bringing back the Commonwealth Employment Service would require placing a new Commonwealth agency office in every major town and centre across the country – akin to expecting someone who was emaciated to train for the Olympics. </p>
<p>These days the government is too incapacitated to manage even basic functions without support from expensive consultants, let alone to manage an expansion.</p>
<p>Its incapacity is evident every time there’s a national crisis. The only agency it can reliably call on is the defence force because there’s little else left. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/politics-with-michelle-grattan-treasurer-jim-chalmers-on-jobs-and-work-214643">Politics with Michelle Grattan: Treasurer Jim Chalmers on jobs and work</a>
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<p>Back at the time of the 2009 Black Saturday bushfires, social workers and counsellors from Centrelink and the Commonwealth Rehabilitation Service were rapidly <a href="https://www.servicesaustralia.gov.au/sites/default/files/documents/dhs-annual-report-0809-full-report.pdf">redeployed</a> and played crucial roles. </p>
<p>The Commonwealth Rehabilitation Service was abolished in the Coalition’s first 2014 budget and the remaining social workers in Centrelink are <a href="https://www.thesaturdaypaper.com.au/news/economy/2023/09/23/exclusive-australias-welfare-agency-risk-collapse#mtr">overwhelmed</a>.</p>
<h2>The Commonwealth can now barely manage contracts</h2>
<p>In the early stages of outsourcing, the Department of Employment still had staff with Commonwealth Employment Service experience and were able to manage the outsourcing contracts well – they understood how complicated labour markets were at the local level.</p>
<p>But these days it’s unlikely there’s anyone is left within the department with direct experience with the service, or even any kind of service.</p>
<p>Each of the previous reviews of employment services over the last 20 years (at least five by my count) has entertained the fantasy that a special blend of incentives can be created to get outsourced providers to do the right thing.</p>
<p>Not only has the Commonwealth’s capacity to deliver services dwindled, its ability also to effectively purchase services has diminished them as well.</p>
<h2>The Commonwealth links programs to payments</h2>
<p>The other reason not to reestablish a Commonwealth Employment Service is that these days the government links the provision of services to the payment of benefits, through what it calls “<a href="https://www.servicesaustralia.gov.au/mutual-obligation-requirements">mutual obligations</a>”.</p>
<p>Providers complain they’ve got to <a href="https://twitter.com/JeremyPoxon/status/1661956210952921088">divert staff</a> away from liaising with potential employers to managing compliance.</p>
<p>Oblivious to the irony, when I appeared before the parliamentary inquiry, federal politicians told me about the effectiveness of some <a href="https://bestas.com.au/">local</a> and <a href="https://jobs.vic.gov.au/about-jobs-victoria">state</a> government initiatives, asking why they were successful.</p>
<p>They are successful because they focus on matching employers and employees rather than linking obligations to benefits.</p>
<p>State, territory and local governments around the country have long realised the Commonwealth is unable to properly focus on getting people jobs and have taken matters into their own hands, usually at a fraction of the cost. </p>
<h2>States do things better</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=964&fit=crop&dpr=1 600w, https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=964&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=964&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1212&fit=crop&dpr=1 754w, https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1212&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/551976/original/file-20231004-29-kvjat4.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1212&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">States know about conditions on the ground.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>Unemployed workers are voting with their feet and turning to these locally run services, sometimes risking suspension of their Centrelink payments because they have failed to turn up to meetings with their official employment provider.</p>
<p>Imagine the possibilities if the Commonwealth were to hand over to the states and local government the northwards of $3 billion it blows each year on its often useless and sometimes harmful programs. </p>
<p>States and territories could then develop really superior services, like <a href="https://www.arbeit.swiss/dam/secoalv/en/dokumente/institutionen-medien/projekte_massnahmen/Strategy_PES_2030_EN_publ.pdf.download.pdf/Strategy_PES_2030_EN_publ.pdf">Switzerland</a>, where employment services are developed and delivered at the level of individual cantons (states). It means what works in Geneva doesn’t have to be imposed on Zurich, producing better outcomes.</p>
<p>The Commonwealth will never be good at providing services while it is obsessed with controlling the welfare budget, and it is responsible for the welfare budget. The states don’t have that problem and do have an immediate on-the-ground interest in getting their citizens into jobs.</p><img src="https://counter.theconversation.com/content/214644/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David O'Halloran is not a member but provides volunteer support to the Australian Unemployed Workers Union </span></em></p>Trade unions want the Commonwealth Employment Service brought back, in part because the government manages contracts with private providers poorly. But it might also manage the service poorly.David O'Halloran, Adjunct Lecturer in Work and Labour Market Theory, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2125282023-09-27T17:50:49Z2023-09-27T17:50:49ZForcing people to repay welfare ‘loans’ traps them in a poverty cycle – where is the policy debate about that?<p>The National Party’s <a href="https://www.1news.co.nz/2023/09/26/more-sanctions-for-unemployed-beneficiaries-under-national/">pledge to apply sanctions</a> to unemployed people receiving a welfare payment, if they are “persistently” failing to meet the criteria for receiving the benefit, has attracted plenty of comment and <a href="https://www.1news.co.nz/2023/09/26/nationals-benefit-sanctions-plan-cruel-dehumanising-greens/">criticism</a>.</p>
<p>Less talked about has been the party’s promise to index benefits to inflation to keep pace with the cost of living. This might at least provide some relief to those struggling to make ends meet on welfare, though is not clear how much difference it would make to the current system of indexing benefits to wages. </p>
<p>In any case, this alone it is unlikely to break the cycle of poverty many find themselves in.</p>
<p>One of the major drivers of this is the way the welfare system pushes some of the most vulnerable people into debt with loans for things such as school uniforms, power bills and car repairs.</p>
<p>The government provides one-off grants to cover benefit shortfalls. But most of these grants are essentially loans. </p>
<p>People receiving benefits are required to repay the government through weekly deductions from their normal benefits – which leaves them with even less money to survive on each week.</p>
<p>With <a href="https://www.stuff.co.nz/pou-tiaki/132980318/auckland-mother-serves-up-cereal-for-dinner-due-to-rising-food-costs">rising costs</a>, the situation is only getting worse for many of the 351,756 New Zealanders <a href="https://figure.nz/chart/TtiUrpceJruy058e-ITw010dHsM6bvA2a">accessing one of the main benefits</a>. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1706800336588193992"}"></div></p>
<h2>Our whittled down welfare state</h2>
<p>Broadly, there are three levels of government benefits in our current system. </p>
<p>The main benefits (such as jobseeker, sole parent and supported living payment) <a href="https://www.workandincome.govt.nz/products/benefit-rates/benefit-rates-april-2023.html">pay a fixed weekly amount</a>. The jobseeker benefit rate is set at NZ$337.74 and sole parents receive $472.79 a week. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-labour-national-consensus-on-family-support-means-the-election-wont-change-much-for-nzs-poorest-households-212450">The Labour-National consensus on family support means the election won’t change much for NZ’s poorest households</a>
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<p>Those on benefits have access to a second level of benefits – weekly supplementary benefits such as an <a href="https://www.workandincome.govt.nz/products/a-z-benefits/accommodation-supplement.html">accommodation supplement</a> and other allowances or tax credits.</p>
<p>The third level of support is one-off discretionary payments for specific essential needs.</p>
<p>Those on benefits cannot realistically make ends meet without repeated use of these one-off payments, unless they use assistance from elsewhere – such as family, charity or borrowing from loan sharks. </p>
<p>This problem has been building for decades. </p>
<h2>Benefits have been too low for too long</h2>
<p>In the 1970s, the <a href="https://mro.massey.ac.nz/handle/10179/12967">Royal Commission on Social Security</a> declared the system should provide “a standard of living consistent with human dignity and approaching that enjoyed by the majority”. </p>
<p>But Ruth Richardson’s “<a href="https://www.stuff.co.nz/the-press/christchurch-life/124978983/1991-the-mother-of-all-budgets">mother of all budgets</a>” in 1991 slashed benefits. Rates never recovered and today’s <a href="https://www.1news.co.nz/2022/03/29/benefit-increases-will-still-leave-families-locked-in-poverty/">benefits are not enough to live on</a>. </p>
<p>In 2018, the <a href="https://www.weag.govt.nz/">Welfare Expert Advisory Group</a> looked at how much money households need in two lifestyle scenarios: bare essentials and a minimum level of participation in the community, such as playing a sport and taking public transport. </p>
<p>The main benefits plus supplementary allowances did not meet the cost of the bare essentials, let alone minimal participation. </p>
<p>The Labour government has since <a href="https://www.beehive.govt.nz/release/government-delivers-income-increases-over-14-million-new-zealanders">increased benefit rates</a>, meaning they are now slightly above those recommended by the advisory group. But those recommendations were made in 2019 and don’t take into account the <a href="https://www.stats.govt.nz/news/annual-inflation-at-6-0-percent">sharp rise in inflation</a> since then. </p>
<p>Advocacy group <a href="https://fairerfuture.org.nz/">Fairer Future</a> published an updated assessment in 2022 – nine out of 13 types of households still can’t meet their core costs with the current benefit rates.</p>
<h2>How ‘advances’ create debt traps</h2>
<p>When they don’t have money for an essential need, people on benefits can receive a “special needs grant”, which doesn’t have to be repaid. But in practice, Work and Income virtually never makes this type of grant for anything except food and some other specific items, such as some health travel costs or emergency dental treatment.</p>
<p>For <a href="https://www.1news.co.nz/2023/02/27/very-stressful-beneficiary-says-he-cant-afford-msd-debt/">all other essential needs</a> – such as school uniforms, car repairs, replacing essential appliances, overdue rent, power bills and tenancy bonds – a one-off payment called an “advance” is used. Advances are loans and have to be paid back.</p>
<p>There are several issues with these types of loans.</p>
<p>First, people on benefits are racking up thousands of dollars worth of debts to cover their essential needs. It serves to trap them in financial difficulties for the foreseeable future. </p>
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Read more:
<a href="https://theconversation.com/why-new-zealands-government-cannot-ignore-major-welfare-reform-report-116895">Why New Zealand's government cannot ignore major welfare reform report</a>
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<p>As long as they remain on benefits or low incomes, it’s difficult to repay these debts. And the <a href="https://www.legislation.govt.nz/act/public/2018/0032/latest/whole.html">Social Security Act 2018</a> doesn’t allow the Ministry of Social Development (MSD) to waive debts.</p>
<h2>Contradictory policies</h2>
<p>Another problem is that people on benefits have to start repaying their debt straight away, with weekly deductions coming out of their already limited benefit.</p>
<p>Each new advance results in a further weekly deduction. Often these add up to $50 a week or more. MSD policy says repayments should not add up to more than $40 a week, but that is often ignored. </p>
<p>This happens because the law stipulates that each individual debt should be repaid in no more than two years, unless there are exceptional circumstances. Paying this debt off in two years often requires total deductions to be much higher than $40.</p>
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Read more:
<a href="https://theconversation.com/kindness-doesnt-begin-at-home-jacinda-arderns-support-for-beneficiaries-lags-well-behind-australias-139387">Kindness doesn't begin at home: Jacinda Ardern's support for beneficiaries lags well behind Australia's</a>
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<p>The third issue is that one-off payments can be refused regardless of the need. That is because there are two provisions pulling in opposite directions.</p>
<p>On the one hand the law says a payment should be made if not making it would cause serious hardship. But on the other hand, the law also says payments should not be made if the person already has too much debt.</p>
<p>People receiving benefits and their case managers face the choice between more debt and higher repayments, or failing to meet an essential need.</p>
<h2>Ways to start easing the burden</h2>
<p>So what is the fix? A great deal could be achieved by just changing the policies and practices followed by Work and Income.</p>
<p>Case managers have the discretion to make non-recoverable grants for non-food essential needs. These could and should be used when someone has an essential need, particularly when they already have significant debt. </p>
<p>Weekly deductions for debts could also be automatically made very low.</p>
<p>When it comes to changing the law, the best solution would be to make weekly benefit rates adequate to live on. </p>
<p>The government could also make these benefit debts similar to student loans, with no repayments required until the person is off the benefit and their income is above a certain threshold.</p>
<p>However we do it, surely it must be time to do something to fix this poverty trap.</p><img src="https://counter.theconversation.com/content/212528/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hanna Wilberg has collaborated with advocacy organisations such as Auckland Action Against Poverty to help people on benefits.</span></em></p>People on benefits are borrowing from the government to pay for essentials like power bills and car repairs. But repayments leave them with even less than before.Hanna Wilberg, Associate professor - Law, University of Auckland, Waipapa Taumata RauLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2143572023-09-26T06:09:08Z2023-09-26T06:09:08ZThe Albanese government blew its shot at setting a historic new unemployment target<figure><img src="https://images.theconversation.com/files/550177/original/file-20230926-15-aybg8t.png?ixlib=rb-1.1.0&rect=838%2C362%2C3477%2C1920&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Treasurer Jim Chalmers says the federal government’s employment white paper is “<a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/working-future-white-paper-jobs-and-opportunities">ambitious</a>”. I’m not convinced.</p>
<p>A clearly ambitious statement would have specified a target for unemployment, ideally one that was a bit of a stretch.</p>
<p>The Keating Labor government’s <a href="https://theconversation.com/1-in-5-australian-workers-are-either-underemployed-or-out-of-work-white-paper-210967">Working Nation</a> statement did that in 1994. Released at a time when unemployment was almost 10%, it specified a target unemployment rate of <a href="https://images.theconversation.com/files/550136/original/file-20230925-26-rz0hz2.PNG">5%</a> – an ambition that served as a beacon for decades.</p>
<p>That target certainly needs to be updated. Unemployment is now well below 5%, meaning “full employment” is now much less than 5%. Yet the Albanese government has passed up a historic opportunity to say how much less, which it could have done by setting its own target.</p>
<h2>Setting our sights below 5%</h2>
<p>The <a href="https://treasury.gov.au/employment-whitepaper/final-report">white paper</a> released <a href="https://theconversation.com/1-in-5-australian-workers-is-either-underemployed-or-out-of-work-white-paper-210967">on Monday</a> defines full employment as a state in which “everyone who wants a job should be able to find one without searching for too long”. That means our unemployment target ought to be somewhere between zero and 5%. </p>
<p>Of course, the unemployment rate can never be zero. </p>
<p>There will always be people out of work while they are moving between jobs, what the white paper calls “frictional” unemployment. That will also be true when Australia’s mix of employers changes – what the paper calls “structural” unemployment, as new industries requiring one sort of training replace old industries that required another.</p>
<p>The white paper says what matters in addition to unemployment (539,700 Australians) is “underemployment” in which people work fewer hours than they want (1 million) and “potential workers” who would like work but aren’t actively looking and so aren’t counted as unemployed (1.3 million). </p>
<p>I get that these things matter. I get that we need, in the words of the white paper, “a higher level of ambition than is implied by statistical measures”. </p>
<h2>What gets measured gets done</h2>
<p>But that higher level of ambition ought not replace targets.</p>
<p>If a target isn’t specific, it isn’t a target at all (or at best it’s a fuzzy target). That means it’s less likely to be aimed at and less likely to be hit.</p>
<p>That’s how it’s been with full employment itself. In 1996 Treasurer Peter Costello and the man he appointed Reserve Bank governor, Ian Macfarlane, signed what became the first <a href="https://www.rba.gov.au/publications/bulletin/1996/sep/pdf/bu-0996-1.pdf">Statement on the Conduct of Monetary Policy</a>, an agreement that’s been updated <a href="https://www.rba.gov.au/monetary-policy/framework/">six times</a>.</p>
<p>As with all of the agreements since, that first statement set out an inflation target (“between 2% and 3%, on average, over the cycle”) but <em>not</em> an employment target – even though both are meant to be objectives under the <a href="https://www.rba.gov.au/about-rba/our-role.html">Reserve Bank Act</a>.</p>
<p>As a result, Governor Macfarlane was able to step down ten years later, secure in the knowledge that on average he had hit the middle of the target band: 2.5% inflation. His successor Glenn Stevens stepped down ten years further on, <a href="https://www.rba.gov.au/speeches/2016/sp-gov-2016-08-10.html">quietly boasting</a> the same thing.</p>
<p>But neither could make any boast about hitting the employment target – because there wasn’t one. </p>
<h2>How failing to set a target costs jobs</h2>
<p>The governor who has just retired, Philip Lowe, looks like he’ll hit an inflation average of 2.8%, which is pretty low given how high inflation has been lately.</p>
<p>But an estimate by former Reserve Bank staffer Isaac Gross, prepared using the Reserve Bank’s own economic model, suggests that in doing so he kept unemployment a good deal higher than it needed to be between 2016 and 2019 – the equivalent of <a href="https://theconversation.com/the-rbas-failure-to-cut-rates-faster-may-have-cost-270-000-jobs-185381">270,000</a> people being out of work for one year.</p>
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Read more:
<a href="https://theconversation.com/the-rbas-failure-to-cut-rates-faster-may-have-cost-270-000-jobs-185381">The RBA's failure to cut rates faster may have cost 270,000 jobs</a>
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<p>Lowe wasn’t held to account for the extra unemployed in the same way as he is being <a href="https://www.afr.com/policy/economy/don-t-judge-phil-lowe-s-inflation-fighting-legacy-yet-20230912-p5e3x6">held to account</a> for his performance on inflation. Why? Because he was never actually given an unemployment target.</p>
<p>I am quite prepared to acknowledge that other measures of employment matter, underemployment among them. But here’s the thing: they move in line with unemployment. </p>
<p>When Australia’s unemployment rate falls, Australia’s underemployment rate falls, almost in tandem. </p>
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<p>It’s easy to see why. As employers find it hard to hire new workers, they get existing workers to put in more hours. And retirees and others who haven’t been looking for work begin putting themselves out there. </p>
<p>Australia’s <a href="https://www.investopedia.com/terms/p/participationrate.asp">participation rate</a> measures the proportion of the population making itself available for work. As unemployment has fallen, it has climbed to an <a href="https://tradingeconomics.com/australia/labor-force-participation-rate">all-time high</a>. </p>
<h2>Our unemployment rate is a proxy for what matters</h2>
<p>This makes the unemployment rate just about the perfect proxy for everything else about the labour market that matters, and just about the perfect number to target.</p>
<p>The Albanese government could have recognised that this week – setting a stretch target of 3% (or even 4%) as an aspiration. Even that would have been less “ambitious” than Keating choosing 5%, when the rate was twice as high.</p>
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<span class="attribution"><a class="source" href="https://rbareview.gov.au/">2023 RBA Review</a></span>
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<p>Treasurer Chalmers says the government didn’t set a target because apparently the unemployment rate <a href="https://treasury.gov.au/sites/default/files/2023-09/p2023-447996-04-ch2.pdf">doesn’t capture</a> “the full extent of spare capacity in our economy or the full potential of our workforce”.</p>
<p>The saving grace is this government has a second chance at this. Chalmers is about to update the Reserve Bank’s statement of expectations, the one that until now hasn’t included a target for unemployment.</p>
<p>It would be open to him to put a specific target in there – making the RBA as accountable as it is now on inflation.</p>
<p>At the moment, it looks more likely Chalmers will adopt a recommendation of the <a href="https://theconversation.com/no-the-rba-review-wont-mean-handing-the-banks-decisions-to-part-time-outsiders-214030">independent review</a> of the bank, which reported in March.</p>
<p>That review recommended the bank be <a href="https://rbareview.gov.au/sites/rbareview.gov.au/files/2023-06/rbareview-report-at_0.pdf">required</a> to produce its own “best assessment of full employment at any point time”, including its estimate of the lowest rate of unemployment that can be sustained without accelerating inflation.</p>
<p>It would be a small step forward. That full employment estimate would become a number to watch, in the same way as the bank’s performance on inflation is at the moment. </p>
<p>But it still won’t be an official government target. The Albanese government had an opportunity to live up to its ambitious rhetoric – and it passed.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/1-in-5-australian-workers-is-either-underemployed-or-out-of-work-white-paper-210967">1 in 5 Australian workers is either underemployed or out of work: white paper</a>
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<img src="https://counter.theconversation.com/content/214357/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Martin 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>30 years ago, Labor Prime Minister Paul Keating adopted an ambitious official target for Australian unemployment. The Albanese government just passed up a historic opportunity to go even further.Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2114872023-09-19T20:08:26Z2023-09-19T20:08:26ZLiving in the 70s: why Australia’s dominant model of unemployment and inflation no longer works<figure><img src="https://images.theconversation.com/files/549016/original/file-20230919-29-7cih0r.png?ixlib=rb-1.1.0&rect=0%2C658%2C3191%2C1586&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>As we approach the release of Monday’s <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/work-commences-employment-white-paper">employment white paper</a> we can expect to hear a lot about something called the NAIRU – the so-called Non-Accelerating Inflation Rate of Unemployment. </p>
<p>This ungainly acronym, which currently dominates the thinking of both the Reserve Bank and the Treasury, derives its power almost entirely from the economic crisis of the 1970s, and is overdue for reconsideration.</p>
<p>The story of the NAIRU begins even further back in time, in the 1940s, and is best illustrated by a curious machine displayed in the entrance of the Melbourne University Business, Economics and Education Library. </p>
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<a href="https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=967&fit=crop&dpr=1 600w, https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=967&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=967&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1216&fit=crop&dpr=1 754w, https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1216&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/548945/original/file-20230919-21-9pqp8.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1216&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">Bill Phillips with MONIAC computer,</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Phillips_and_MONIAC_LSE.jpg">Wikimedia</a></span>
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<p>The <a href="https://museumsandcollections.unimelb.edu.au/__data/assets/pdf_file/0011/1379009/06_Corkhill-MONIAC10.pdf">MONIAC</a> is a hydraulic computer, one of 12 constructed by New Zealand economist Bill Phillips in 1949 to illustrate <a href="https://www.investopedia.com/terms/k/keynesianeconomics.asp">Keynesian economics</a>.</p>
<p>MONIAC stands for MOnetary National Income Analog Computer, and, although the machine is made out of tanks and pipes and valves and coloured water, it is a working (early) computer.</p>
<p>A <a href="https://museumsandcollections.unimelb.edu.au/__data/assets/pdf_file/0011/1379009/06_Corkhill-MONIAC10.pdf">guide</a> to the Melbourne University MONIAC says when in operation, water is “injected into the ‘active balances’ tank, pumped up to the top of the machine as income, and allowed to flow downwards as expenditure, with controlled amounts siphoned off to enter the tanks representing taxes and government spending, savings and investment, and trade”. </p>
<p>While the MONIAC was an amazing innovation, even more important was the thinking behind it, which a decade later led Phillips to discover the <a href="https://www.investopedia.com/terms/p/phillipscurve.asp">Phillips Curve</a>, a graph still used today to show the relationship between unemployment and the rate of wages growth or inflation.</p>
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<p>In the model described by Phillips, strong aggregate demand (a strong desire to spend) both cuts unemployment and pushes up inflation. </p>
<p>Weak aggregate demand boosts unemployment and cuts inflation. </p>
<p>The Phillips curve represents the trade-off.</p>
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<p>At the time, with memories of the Great Depression still fresh, and the United States competing with the Soviet Union to achieve full employment, a slightly higher rate of inflation seemed a small price to pay to get closer to full employment.</p>
<p>It could be obtained by moving along the Phillips curve, using government spending and other measures to increase inflation and bring down unemployment.</p>
<p>Leading Keynesian economists including <a href="https://www.tandfonline.com/doi/abs/10.1080/18386318.2012.11682193">Paul Samuelson</a> recognised at the time that the curve might not hold if people came to expect high inflation. However, given that earlier episodes of inflation in the early 1950s had been short-lived, it was thought that problem could be managed.</p>
<h2>Phillips morphed into NAIRU</h2>
<p>This prevailing view was challenged in 1968 by the great Chicago economist <a href="https://www.aeaweb.org/aer/top20/58.1.1-17.pdf">Milton Friedman</a> who argued in his Presidential Address to the American Economic Association that, if inflation persisted long enough, the expectations of workers and businesses would adjust. </p>
<p>The inflation rate would become “baked in” as workers and suppliers increased their wages and prices by enough to compensate for inflation, whatever the unemployment rate.</p>
<p>Over the long term, there was a “<a href="https://www.investopedia.com/terms/n/naturalunemployment.asp">natural rate of unemployment</a>” – a floor – below which extra wages growth would simply lead to more inflation.</p>
<p>Translated to the graphical representation of the Phillips curve, Friedman implied that in the long run, the “curve” would be simply a vertical line, represented here with the annotation <a href="https://www.rba.gov.au/education/resources/explainers/nairu.html">NAIRU</a> in a graph prepared by Australia’s Reserve Bank.</p>
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<p>The combination of high inflation and high unemployment (often referred to as “<a href="https://www.investopedia.com/articles/economics/08/1970-stagflation.asp">stagflation</a>”) which emerged in the early 1970s seemed to vindicate Friedman. High inflation and high unemployment can’t coexist on a standard Phillips curve.</p>
<p>Friedman’s presentation of the problem implied the need for a full-scale model of what moved unemployment and wages, but it was never seriously attempted. </p>
<p>Instead, economists used Friedman’s insight to estimate the rate of unemployment at which inflation remained stable – the so-called “natural rate”. </p>
<p>Unfortunately for proponents of the idea, the “natural rate” turned out to <a href="https://www.rba.gov.au/publications/bulletin/2017/jun/2.html">vary</a> over time, leading to the term being replaced with the clunkier but more descriptive “NAIRU”. </p>
<p>Worse still for proponents of the idea, estimates of NAIRU tended to move in line with the actual rate of unemployment. When unemployment was high, estimates of NAIRU were high. As it fell, estimates of NAIRU <a href="https://treasury.gov.au/sites/default/files/2021-05/p2021-164397_nairu.pdf">fell</a>, suggesting that how far unemployment could fall was determined by how far unemployment had fallen.</p>
<h2>Put to the test, NAIRU failed</h2>
<p>The NAIRU model’s first real test since the 1970s came with the rapid upsurge and then decline in inflation in 2022 and 2023 that followed Russia’s invasion of Ukraine and the end of the COVID lockdowns. </p>
<p>Inflation was initially driven by a combination of supply chain disruptions and demand from savings made during the lockdowns.</p>
<p>Because the unemployment rate didn’t much move (presumably being near NAIRU, albeit an estimate that had progressively been lowered as unemployment fell) the upsurge in inflation could be seen as consistent with the existence of NAIRU, a vertical line on the Phillips graph.</p>
<p>However, the absence of a significant increase in wages growth was inconsistent with NAIRU, which was built around the idea that inflation was driven by growth in wages, passed on as higher prices.</p>
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Read more:
<a href="https://theconversation.com/we-can-and-should-keep-unemployment-below-4-say-top-economists-211277">We can and should keep unemployment below 4%, say top economists</a>
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<p>More damaging to the idea of a NAIRU was what happened next.</p>
<p>So far in 2023 inflation has dived (using the monthly measure, from 8.4% to <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/latest-release">3.9%</a>) but the unemployment rate has barely budged – at 3.7% in August, it’s where it was in <a href="https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release">January</a>.</p>
<p>This doesn’t fit the standard NAIRU model. However, it makes perfect sense in a world where high inflation can be seen as the simple result of strong demand driven by COVID income support and supply constraints associated first with COVID and then Russia’s invasion of Ukraine.</p>
<h2>Let’s not use NAIRU to limit our ambition</h2>
<p>The central banks that pushed up interest rates have been quick to claim credit for the latest decline in inflation, but this claim doesn’t stand up to scrutiny. </p>
<p>Higher interest rates work with a lag to drive inflation down by reducing investment and consumption, and increasing unemployment. But inflation has fallen without these things happening. </p>
<p>Unemployment may well rise as the economy contracts, but that will be an unnecessary cost, like undergoing a dangerous treatment for a medical condition that is curing itself.</p>
<p>Like a one-hit wonder from the 1970s, the NAIRU model has remained dominant on the strength of its success in predicting the emergence of stagflation in the 1970s. </p>
<p>But as a general model of inflation and unemployment, it is woefully deficient. It is to be hoped it isn’t used to limit the government’s ambition in the white paper.</p>
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Read more:
<a href="https://theconversation.com/why-unemployment-is-set-to-stay-below-5-for-years-to-come-188705">Why unemployment is set to stay below 5% for years to come</a>
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<p><em>Correction: this article referred in one place to Russia’s invasion of Afghanistan, rather than Ukraine. This has been amended.</em></p><img src="https://counter.theconversation.com/content/211487/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Quiggin 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>Put to the test in the past two years, the idea of a “natural” rate of unemployment has failed. There’s no need to push unemployment up to any particular rate to bring down inflation.John Quiggin, Professor, School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2131322023-09-14T13:36:14Z2023-09-14T13:36:14ZSouth Africa can’t crack the inequality curse. Why, and what can be done<p><em>South Africa is ranked <a href="https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099125303072236903/p1649270c02a1f06b0a3ae02e57eadd7a82">one of the most unequal societies in the world</a>. The Conversation Africa spoke to Imraan Valodia, the Director of the Southern Centre for Inequality Studies, University of the Witwatersrand, about inequality in South Africa.</em></p>
<h2>Has income inequality got worse in the last 20 years?</h2>
<p>According to the most <a href="https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099125303072236903/p1649270c02a1f06b0a3ae02e57eadd7a82">recent data</a>, South Africa has the highest income inequality in the world, with a Gini coefficient of around 0.67. The Gini coefficient is a widely used statistical measure of how income is distributed in the population of a country. It takes a value between 0 and 1. A coefficient of 1 indicates perfect inequality – where one individual in a country would earn all the income in that country. Conversely, a coefficient of 0 is an indicator of perfect equality, where the income of the country is distributed perfectly equally among all its citizens. </p>
<p>South Africa’s Gini is exceptionally high. A number of other African countries have high Ginis too. For example, Namibia’s is 0.59, Zambia’s 0.57 and Mozambique’s 0.54. </p>
<p>Countries in Europe, especially Scandinavian countries, have much lower Ginis. They range between 0.24 and 0.27. Among the developed countries, the US has a high level of inequality with a Gini of 0.41. </p>
<p>China’s is 0.38 and India’s is 0.35. Russia’s is similarly relatively low at 0.37. Brazil, like South Africa, has a much higher level of inequality at 0.53. </p>
<p>In South Africa, <a href="https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099125303072236903/p1649270c02a1f06b0a3ae02e57eadd7a82">the evidence</a> suggests that income inequality has risen in the post-apartheid period, though it has fluctuated.</p>
<p>What is clear is that levels of inequality are not decreasing.</p>
<h2>What’s driving the trend?</h2>
<p>There are a number of drivers.</p>
<p>First, the fact that large numbers of South Africans are <a href="https://www.statssa.gov.za/publications/P0211/P02112ndQuarter2023.pdf">unemployed</a> and report no or very low incomes. According to the latest Quarterly Labour Force Survey, the rate of unemployment in South Africa, in June 2023, <a href="https://www.statssa.gov.za/publications/P0211/P02112ndQuarter2023.pdf">was estimated</a> to be 32.6%. But this doesn’t include people who have given up trying to find work. (The internationally accepted definition of unemployment requires people who are classified as unemployed to be searching for work.) If we include these discouraged workers, the unemployment rate increases to 44.1%. </p>
<p>There are about <a href="https://www.statssa.gov.za/publications/P0211/P02112ndQuarter2023.pdf">40.7 million</a> people in South Africa between the ages of 15 and 64 – this is the group that could potentially work. Those who are not able to work, because they’re at school, or ill, or for some other reason, are estimated to number 13.2 million. That leaves 27.5 million people. Of these, only 16.4 million are working. </p>
<p>Of the 16.4 million, only 11.3 million are employed in the formal sector, where income tends to be higher. </p>
<p>These figures make it clear that the economy is just not able to generate sufficient numbers of employment opportunities.</p>
<p>The second driver is that, among those who are employed, many earn very low wages. Of those who do have work, about 3 million people subsist in the informal economy, where incomes are very low. Another 900,000 people work in agriculture and about 1 million as domestic workers, where incomes are very low.</p>
<p>Even in the formal sector, wages, especially for non-unionised workers, tend to be <a href="http://new.nedlac.org.za/wp-content/uploads/2016/11/NMW-Report-Draft-CoP-FINAL1.pdf">extremely low</a>. </p>
<p>And third, the incomes at the top end of the income distribution are very high. It’s more difficult to provide reliable statistics on this, because incomes for rich households tend to come from a variety of sources. One way to get a sense of this is to look at household expenditure – a good proxy for incomes. Unfortunately, South Africa’s income and expenditure survey is now quite dated. But what’s available <a href="https://www.statssa.gov.za/publications/Report-03-10-19/Report-03-10-192017.pdf">shows</a> that the richest 10% of South African households are responsible for some 52% of all expenditure. The poorest 10% of households contribute only 0.8% of all expenditure.</p>
<h2>Is South Africa an outlier?</h2>
<p>Yes. However, there are probably many countries that have higher levels of inequality – we just don’t have the data for them. So, while people often say South Africa has the highest Gini in the world, it would be more accurate to say that South Africa has the highest Gini among countries that have data on income inequality.</p>
<p>South Africa’s data is generally very good, reliable and independent. </p>
<h2>What steps have been taken? Why didn’t they work?</h2>
<p>The major intervention in post-apartheid South Africa was to address inequality in terms of race. This is, of course, extremely important. Among other steps, government introduced the Employment Equity Act to address race-based discrimination in employment, and various measures to address ownership by race. There is controversy about some of the measures. Nevertheless, evidence suggests that they have been very <a href="https://muse.jhu.edu/article/871137/pdf">successful</a> in changing the patterns of inequality in South Africa.</p>
<p>However, not enough has been done – race-based inequality is still a real problem. In general, high income South African households, irrespective of race, have done well over the last three decades, which is why inequality has remained stubbornly high. </p>
<h2>What steps should be taken now?</h2>
<p>I don’t think there is any one policy that would address the issue. Some focus on the labour market and argue that employment is not growing because of labour protections. But I think this is incorrect and does not deal with the nuance of the country’s political and economic situation.</p>
<p>I think we should rather be thinking about how to direct the benefits of economic growth and redistribution policies to benefit those at the bottom end. This could involve, for example, raising incomes at the bottom, creating new opportunities and employment for those who don’t have them, and ensuring that the benefits of growth do not disproportionately benefit those at the top end of the income distribution.</p>
<h2>What is the difference between income inequality and wealth inequality?</h2>
<p>Income inequality measures only a portion of the real inequality in South Africa. Measuring inequality in wealth gives a more complete picture of how unequal a society is. Income is only one factor that determines wealth. Wealth also includes inheritance, earnings from assets and so on. </p>
<p>The broad picture is that in South Africa wealth inequality is much worse than <a href="https://www.wits.ac.za/scis/research-projects/wealth-inequality/working-papers-and-research-output/">income inequality</a>. Some striking statistics are that the top 0.01% of people – just 3,500 individuals – own about 15% of all of the wealth in South Africa. The top 0.1% own 25% of the wealth. The net wealth of the top 1% is R17.8 million (about US$944,000). In contrast, the bottom 50% have a negative wealth position (they have more liabilities than they do assets) of R16,000 (around US$850).</p>
<p><em>This article is part of a media partnership between Wits University’s Southern Centre for Inequality Studies and The Conversation Africa for the Annual Inequality Lecture given by Professor Branko Milanovic, titled “Recent changes in the global income distribution and their political implications”. You can watch him deliver the lecture <a href="https://www.youtube.com/watch?v=nAproYSlaMA">here</a>.</em></p><img src="https://counter.theconversation.com/content/213132/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Imraan Valodia and the Southern Centre for Inequality Studies receive funding from a number of local and international foundations that support academic research. </span></em></p>Efforts have been made to change the patterns of inequality in South Africa. But not enough has been done. Race-based inequality is still a real problem.Imraan Valodia, Pro Vice-Chancellor: Climate, Sustainability and Inequality and Director Southern Centre for Inequality Studies., University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2130952023-09-08T12:49:39Z2023-09-08T12:49:39ZJohannesburg fire: there was a plan to fix derelict buildings and provide good accommodation - how to move forward<p>Thousands of Johannesburg inner-city residents occupy buildings in conditions like those that led to the <a href="https://theconversation.com/johannesburg-fire-disaster-why-eradicating-hijacked-buildings-is-not-the-answer-212732">fire at 80 Albert Street</a> that killed at least 77 people. They are living in derelict multi-storey buildings, former office blocks, sectional title buildings, tenements, warehouses and factories.</p>
<p>The residents are mostly informal, unsalaried or poorly paid workers. Some are unemployed or on welfare grants. They <a href="https://www.jstor.org/stable/10.18772/22019103849.16">can’t afford even the lowest priced formal rental</a> or social housing in the inner city. Even if they could, they would be excluded by high demand and low supply.</p>
<p><a href="https://www.jstor.org/stable/10.18772/22019103849.20">The accommodation they can access</a> frequently lacks running water and sanitation, security, ventilation, lighting and formal electricity.</p>
<p>Rooms are <a href="https://www.jstor.org/stable/10.18772/22019103849.21">subdivided</a> with wood or cardboard. Electricity cabling, candles, paraffin lamps and generators contribute to the ever-present pollution and risk of fire. Homes and families’ lives are carved in the shadows of failing or non-existent infrastructure.</p>
<p>We are academics in the fields of urban planning, architecture and housing. We’ve applied our expertise to questions of urbanisation, poverty, housing design and management, housing rights and the inner city over many years.</p>
<p>Various complex factors have led to the occupation of abandoned inner city buildings under precarious conditions. The city’s approach to this reality evolved into a sophisticated and nuanced <a href="https://www.wits.ac.za/media/wits-university/faculties-and-schools/-engineering-and-the-built-environment/architecture-and-planning/documents/jhb-innercity-housing-strategy2014-2021.pdf">housing plan adopted in 2017</a>. It was only partially implemented. While the city needs to refocus on this plan, immediate safety interventions are needed in occupied buildings. Many of them lend themselves to retrofitting or conversion. Existing management structures that involve residents offer lessons. </p>
<h2>Johannesburg’s intervention plans</h2>
<p>Constitutional jurisprudence protects what it calls “unlawful occupiers” from evictions that would lead to homelessness and requires the state to provide alternative accommodation. </p>
<p>Key to this jurisprudence, the 2011 <a href="https://journals.co.za/doi/epdf/10.2989/CCR.2013.0011">Blue Moonlight case</a> put an end to the city’s policy of handing precariously occupied buildings to the private sector for profitable development.</p>
<p>The city has recognised that expansion of low-income housing is a critical part of the solution. In 2014 Mayor Parks Tau’s ANC administration <a href="https://www.gpma.co.za/news/ichip-presentation-2017/">commissioned a strategy and housing plan</a> which was approved by Herman Mashaba’s (DA-led) mayoral committee in 2017. The plan is concerned with the needs of the poor, though addressing all income groups. It takes an inclusive, contextual, practical approach that promotes choice.</p>
<p>The plan includes providing emergency services to critical buildings, and temporary emergency accommodation. It sets out strategies to increase supply of temporary and permanent housing by private providers, city entities and social housing institutions. This includes mechanisms for very low-income accommodation, including subsidised rental rooms.</p>
<p>The plan was well received but never adequately funded or <a href="https://www.dailymaverick.co.za/article/2023-09-05-inner-city-housing-joburg-has-a-plan-it-just-hasnt-implemented-it/">carried out</a>. The projected budget for temporary emergency accommodation and alternative rental units for those evicted for 2017/2018 to 2021/22 was R561 million (US$29 million). Only just over one third was allocated.</p>
<p>In 2021, the city developed a <a href="https://joburg.org.za/departments_/Documents/Housing/TEAP%20Policy%20February%202021%20Approved.pdf">draft policy</a> for temporary emergency accommodation. It also reviewed the availability of such accommodation. Its housing department estimated it would need to provide 10,000 additional rooms or rental units to evicted communities. At the time under 2,000 units were already built, but mostly occupied or allocated. The city had projects to develop under 5,000 more units. Even if all current and future projects were fully funded and complete, which could take several years, they would cover less than half the existing need.</p>
<p>The approved plan acknowledged that criminals exploited residents by collecting rent in some buildings such as 80 Albert Street. The municipal-owned Johannesburg Property Company, which manages the city’s vast property portfolio, seemingly owner of several occupied buildings, has not released its inventory of properties.</p>
<p>Much of the housing plan’s analysis, approach and proposals remain relevant today. It has not been publicly available on the internet. We <a href="https://www.wits.ac.za/media/wits-university/faculties-and-schools/-engineering-and-the-built-environment/architecture-and-planning/documents/jhb-innercity-housing-strategy2014-2021.pdf">placed it</a> on the <a href="https://www.wits.ac.za/cubes/publications/media-articles-podcast-and-popular-press/">Centre for Urbanism & Built Environment Studies website</a> to inform ongoing responses to the inner-city housing emergency.</p>
<h2>A way forward</h2>
<p>As government departments seek to make funds available, solutions must build on existing knowledge and plans, local insight, expertise, experience and ongoing dialogue. We recommend a multi-pronged and coordinated strategy.</p>
<p>Supply of emergency and temporary accommodation alone cannot solve the crisis. Similarly, militarised police solutions are unconstitutional and incapable of addressing housing and safety in the inner city.</p>
<p>The COVID-19 pandemic triggered <a href="https://www.newframe.com/lockdown-forces-ministry-to-address-shack-settlements/">innovative ideas for retrofitting interventions</a> in informal settings, including safe access to water. The roll-out of water tank to areas with insuffucient water supply showed a capacity to respond to crises. With this hindsight, relevant government departments should focus their budgets on providing basic safety for occupied buildings in the immediate term.</p>
<p>Immediate responses should not involve removing occupants but enhancing safety through fire hydrants and extinguishers, emergency exits and clearing blocked access routes. Climate funds should be used to retrofit occupied buildings with solar panels, rainwater harvesting and other “green” measures.</p>
<p>Temporary containers can be placed alongside buildings for secure storage of items. In time, alternative partitioning materials must be introduced. Where one-way fire doors and fire wells exist, emergency LED lighting and mechanical door closers can be fitted.</p>
<p>Several buildings and communities are ready for these incremental improvements. Occupying communities are organised. The <a href="https://www.facebook.com/p/Inner-city-federation-100069194417981/?paipv=0&eav=AfYM_UEIAaLdQqHtcbsI7GU7vCU8UVEhljOCeSUaUqwuOtFfXlAyGTH3eLsljeF6iv8&_rdr">Inner City Federation</a> already represents committees of over 70 buildings. They are mobilising to improve basic living conditions and to get rid of criminal syndicates. The <a href="https://icrc.org.za/">Inner-City Resource Centre</a> also has experience in community-based projects and engaging residents and the state. Collective tenure solutions such as <a href="https://www.jstor.org/stable/10.18772/22019103849.18">community land trusts</a> can be considered.</p>
<p>Any accommodation with shared facilities requires high levels of management. Successful models include co-management with residents. These are already in place in several buildings. Where temporary shelters have become <em>de facto</em> permanent, urban management must adjust and not be abandoned, as at 80 Albert Street.</p>
<p>Opportunities for social housing and emergency shelter lie in the building register of the Johannesburg Property Company and other public entities. As <a href="https://www.theguardian.com/cities/2017/may/25/spatial-apartheid-housing-activists-occupy-cape-town-gentrification">activists</a> and <a href="https://housingfinanceafrica.org/documents/urban-land-reform-in-south-africa-the-potential-of-public-property-and-impact-of-public-investments/">researchers</a> have pointed out, underused or vacant publicly owned land and buildings offer potential.</p>
<p>Private sector and social housing companies already respond in various ways with <a href="https://afhco.co.za/to-let/residential/">well managed low-income rental models</a>. However, qualification criteria and rents may just be <a href="https://developingeconomics.org/2021/11/10/inner-city-pressure-and-living-somewhere-in-between/">out of reach</a> for those in need. Faith-based organisations and non-profits have much to offer.</p>
<p>The challenges are global and responses in other contexts offer useful insights. Metropoles such as São Paulo have <a href="https://www.academia.edu/45033377/Ocupa%C3%A7%C3%B5es_de_moradia_no_centro_de_S%C3%A3o_Paulo_trajet%C3%B3rias_formas_de_apropria%C3%A7%C3%A3o_e_produ%C3%A7%C3%A3o_populares_do_espa%C3%A7o_e_sua_criminaliza%C3%A7%C3%A3o">extensive high-rise housing stock</a>, partly unused and informally occupied. In 2018, a building in São Paulo occupied by 171 families collapsed after a fire, killing seven people. In response, a multi-sector task force produced <a href="https://polis.org.br/wp-content/uploads/2021/06/Situacao-das-ocupacoes-na-cidade-de-Sao-Paulo.pdf">a report</a> calling for measures to increase safety in occupied buildings. In some buildings, housing movements trained residents in disaster readiness – <a href="http://www.labcidade.fau.usp.br/brigada-de-incendio-do-prestes-maia-e-organizacao-das-familias-evita-tragedia/">preventing another potentially catastrophic fire</a>.</p>
<p>After <a href="https://www.bbc.com/news/uk-40301289">London’s Grenfell Tower fire in 2017</a>, which killed 72 people, rules were amended governing surveys and plans, material flammability, fire safety equipment, signage and lights.</p>
<p>Architects have proposed <a href="https://normanfosterfoundation.org/?project=essential-homes-research-project">innovative</a> and just <a href="https://masteremergencyarchitecture.uic.es/blog/">solutions to crises</a> in other large metropoles. In Johannesburg, the current downturn in the building industry means new graduates are a potential workforce requiring practical experience. With state support, architects experienced in <a href="https://www.domusweb.it/en/architecture/2013/05/20/marlboro_south.html">documentation</a>, <a href="https://docomomojournal.com/index.php/journal/article/view/167">renovation</a>, reuse of <a href="https://localstudio.co.za/architecture/multi-family-housing/">commercial</a> and <a href="https://savagedodd.co.za/Portfolio/slava-village-boksburg-johannesburg/">retail</a> space, and <a href="https://changebydesignjoburg.wordpress.com/change-by-design-2023-joburg/">participation</a> could mentor them.</p>
<p>We call for regular and institutionalised discussion forums in which academics, community leaders, NGOs and the private sector exchange insights with politicians and officials.</p>
<p><em><a href="https://affordablehousingactivation.org/experts/heather-dodd/">Heather Dodd</a>, a partner in Dodd + Savage Architects, contributed to this article.</em></p><img src="https://counter.theconversation.com/content/213095/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marie Huchzermeyer is a board member of the NGO Planact and a member of SACPLAN (the South African Council of Planners). She received funding from the NRF up until 2019. From 2016-2025 she receives funding from DAAD (German Academic Exchange Service). </span></em></p><p class="fine-print"><em><span>Amira Osman receives funding from Amira Osman receives funding from The National Research Foundation (NRF) and the Tshwane University of Technology. </span></em></p><p class="fine-print"><em><span>Hannah le Roux receives funding from The National Research Foundation (NRF)</span></em></p><p class="fine-print"><em><span>Margot Rubin receives funding from the NRF through Off-Grid Cities project. I am also a visiting lecturer at the Wits School of Architecture and Planning and a visiting researcher at the GCRO.</span></em></p><p class="fine-print"><em><span>Matthew Wilhelm-Solomon received funding from the Volkswagen Foundation "Knowledge for Tomorrow - Cooperative Research Projects in Sub-Saharan Africa" postdoctoral grant between 2013-2016</span></em></p><p class="fine-print"><em><span>mfaniseni Fana Sihlongonyane receives funding from Gauteng City Region Observatory Board, Wits university. He is affiliated with South African Council of Planners and the Centre for Urbanism and Built Environment Studies (CUBES).
</span></em></p><p class="fine-print"><em><span>Neil Klug is a member of South African Council of Planners (SACPLAN) and the Centre for Urbanism and the Built Environment Studies (CUBES). He has worked for consultancies involved in low-income housing policy formulation, and contributed to the City of Johannesburg's Temporary Emergency Housing Provision (TEAP) policy as part of a consultancy led by Lawyers for Human Rights. </span></em></p><p class="fine-print"><em><span>Philip Harrison receives funding from the National Research Foundation.</span></em></p><p class="fine-print"><em><span>Priscila Izar receives funding from the University of Witwatersrand Research Office and from the Urban Studies Foundation in Scotland. </span></em></p><p class="fine-print"><em><span>Sarah Charlton has worked for consultancies involved in low-income housing strategy and policy, and contributed to the Inner City Housing Implementation Plan led by RebelGroup. She has received funding for research from the NRF, Volvo Research and Educational Foundations, British Academy and ESRC.</span></em></p><p class="fine-print"><em><span>Sarita Pillay previously received funding from the National Research Foundation (NRF), IJURR Foundation and the Canon Collins Foundation for her PhD research. </span></em></p><p class="fine-print"><em><span>Tanya Zack consults in the field of low-income housing and informality strategy and policy development, and contributed to the Inner City Housing Implementation Plan led by RebelGroup.</span></em></p>Armed police interventions are unconstitutional and incapable of addressing housing and safety in the inner city.Marie Huchzermeyer, Professor, School of Architecture and Planning, University of the WitwatersrandAmira Osman, Professor of Architecture and SARChI: DST/NRF/SACN Research Chair in Spatial Transformation (Positive Change in the Built Environment), Tshwane University of TechnologyHannah le Roux, Associate professor of Architecture, University of the WitwatersrandMargot Rubin, Lecturer in Spatial Planning, Cardiff UniversityMatthew Wilhelm-Solomon, Writing fellow at the African Centre for Migration Studies, University of the WitwatersrandMfaniseni Fana Sihlongonyane, Professor of Development Planning and Urban Studies, University of the WitwatersrandNeil Klug, Senior Lecturer, University of the WitwatersrandPhilip Harrison, Professor School of Architecture and Planning, University of the WitwatersrandPriscila Izar, Centennial Postdoctoral Fellow, School of Architecture and Planning, Centre for Urbanism and Built Environment Studies, University of the WitwatersrandSarah Charlton, Associate Professor, University of the WitwatersrandSarita Pillay Gonzalez, Lecturer in the School of Geography, Archaeology and Environmental Studies, University of the WitwatersrandTanya Zack, Visiting senior lecturer, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2127322023-09-02T09:29:19Z2023-09-02T09:29:19ZJohannesburg fire disaster: why eradicating hijacked buildings is not the answer<p>The fire that killed at least 76 people in a five storey building <a href="https://www.news24.com/news24/southafrica/news/joburg-fire-dying-in-agony-in-a-city-owned-deathtrap-20230901">in Johannesburg</a> on 31 August is not an isolated incident, and has elicited the usual unhelpful response from some city officials and politicians.</p>
<p>They <a href="https://www.google.com/search?sca_esv=561932315&rlz=1C1FKPE_enZA996ZA996&sxsrf=AB5stBgsuLcpby9TilRBTN3Gns0ydPwoyg:1693575557197&q=herman+mashaba&tbm=vid&source=lnms&sa=X&ved=2ahUKEwiVpvLLxImBAxX1SPEDHTxoD4YQ0pQJegQIChAB&biw=1707&bih=762&dpr=1.13#fpstate=ive&vld=cid:3cd64a0c,vid:WiQrZI9EwjY">have placed the blame</a> on the informal occupation of abandoned buildings, a phenomenon known as “hijacking”. They have also blamed immigrant populations who, they say, are the primary residents of such buildings. To solve the problem, they argue, hijacked buildings should be expropriated and redeveloped by the private sector.</p>
<p>A politician in the city council <a href="https://www.businesslive.co.za/bd/national/2023-08-31-joburg-inferno-raises-questions-over-citys-service-delivery-failures/">has also called</a> for “mass deportations” of “illegal foreigners”.</p>
<p>Based on my work as a researcher on how cities are built and transform at the <a href="https://www.gcro.ac.za/">Gauteng City-Region Observatory (GCRO)</a>, I argue that all of this is a distraction from the urgent work of reducing risks in the living environments of the poor, and reducing the risk of fire more generally. The observatory, a partnership between the Gauteng provincial government, the universities of the Witwatersrand and Johannesburg, and the South African Local Government Association, builds the data and analysis to help inform development in the Gauteng City-Region.</p>
<p>The rhetoric by politicians and city officials treats the latest tragedy as a freakish problem of hijacked buildings occupied by migrant populations. Yet as human geographer <a href="https://www.taylorfrancis.com/chapters/edit/10.4324/9781351261562-16/catastrophe-usual-nigel-clark">Nigel Clark</a> sadly notes, it is important to acknowledge the way in which catastrophes are a normal part of life – particularly for vulnerable groups – rather than exceptional or unusual events. </p>
<p>In Johannesburg, fires are not limited to “hijacked” buildings. They have also occurred in legally occupied buildings. Furthermore, fires are not a specific risk to inner city populations. They are a regular occurrence in shack settlements across the city. The use of this tragedy by some politicians to argue in favour of removing hijacked buildings is part of a longstanding pattern of blaming the poor for the conditions and justifying further suffering that they wish to heap on them. </p>
<h2>A pervasive problem</h2>
<p>There is no doubt that unscrupulous or negligent informal landlords bear much responsibility for failing to ensure basic fire safety. Yet this problem is not limited to hijacked buildings.</p>
<p>In 2018, emergency services were unable to contain a fire at the <a href="https://www.news24.com/news24/southafrica/news/bank-of-lisbon-fire-das-jack-bloom-accuses-govt-of-covering-up-findings-20221125">Bank of Lisbon Building</a> in downtown Johannesburg because there was insufficient water pressure in the building and no fire suppression systems had been installed. </p>
<p>Three firefighters died, and the building itself was subsequently demolished. The building had not been illegally occupied; it was rented by the Gauteng provincial government, which <a href="https://www.iol.co.za/news/south-africa/gauteng/joburgfire-firefighters-leave-building-due-to-low-water-pressure-16915344">was aware</a> that the building was non-compliant in advance of the incident. </p>
<p>Three years later, emergency services were hampered in their efforts to contain the fire at a public hospital, <a href="https://www.medicalbrief.co.za/what-really-happened-in-the-charlotte-maxeke-hospital-fire/">Charlotte Maxeke</a>, by incompatible fire hydrant couplings. As these cases show, eradicating “hijacked” buildings would not have solved failures to comply with fire regulations in legally occupied buildings in the city.</p>
<p>Nor would eradicating “hijacked” buildings remove the risk of fire posed to low income groups across the city as a whole. In Johannesburg more than one in ten households lives in an informal dwelling outside the city centre, either in shack settlements or in back yards. This is calculated from the Gauteng City-Region Observatory’s <a href="https://www.gcro.ac.za/research/project/detail/quality-life-survey-vi-202021/">Quality of Life 6 survey 2020/21</a>. </p>
<p>These kinds of settlements are also prone to fires as a result of the materials used to construct dwellings, the density of settlements and the risky sources of energy for heating, cooking and light. </p>
<p>Once again, some politicians and officials have arrived at the idea that since these settlements are not fit for human habitation, they should be eliminated. In 2006 the elected representative responsible for housing in the KwaZulu-Natal province announced <a href="https://abahlali.org/files/KZN%20Slums%20Act.pdf">legislation</a> </p>
<blockquote>
<p>to provide for the progressive elimination of slums. </p>
</blockquote>
<p>It would have forced private land owners to evict shack dwellers. But the shack dwellers movement <a href="https://abahlali.org/">Abahlali Basemjondolo</a> successfully <a href="https://abahlali.org/node/date/2009/10/">challenged</a> this initiative in the Constitutional Court.</p>
<h2>Disposable lives</h2>
<p>According to the geographer <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-2427.2009.00835.x">Martin Murray</a>, shack fires underscore the disposability of the lives of the poor. South Africa’s acute levels of inequality and poverty mean that some people can afford to buy their way out of risks while others cannot. </p>
<p>Inner city occupations and shack settlements alike are the inevitable consequence of the fact that huge populations of people have to get by without a living wage. If these households earned higher wages, they would not choose to live in places that were at risk of fire, flooding and other potential disasters. </p>
<p>As with the push to evict shack dwellers, the impulse to evict the residents of hijacked buildings conflates unsafe living conditions with those who live in them. A similar conflation occurs on the imagined solution: eradicating the problem means eradicating communities of people in which the problem manifests. In other words, the language of eradication blames the victims of social inequality for their own suffering, and sets the stage for exposing them to further risk.</p>
<h2>Helping without eradicating</h2>
<p>Cyril Ramaphosa, South Africa’s president, <a href="https://ewn.co.za/2023/08/31/joburg-cbd-fire-wake-up-call-for-govt-to-provide-habitable-housing-ramaphosa">stated</a> that the fire was a wake up call for the government to provide habitable housing. Government does indeed have a vital role to play in promoting the right to decent housing for all. It needs to do so in a way that takes into account the full complexity of the structural conditions at play, providing giveaway housing, or working with other stakeholders to correct for failings in the housing market that leave poor and working class people without affordable options. </p>
<p>A good example is the City of Johannesburg’s recent <a href="https://housingfinanceafrica.org/app/uploads/City-of-Johannesburg-Inclusionary-Housing-2019.pdf">inclusionary housing policy</a> that obliges developers to include affordable housing in all projects. Much more should be done by the state to provide housing. </p>
<p>Yet informal settlements and illegal occupations of inner city buildings will not be eradicated – no matter how many houses the state builds – as long as <a href="https://www.worldbank.org/en/country/southafrica/overview">acute levels of unemployment and poverty</a> continue. Rather than abandoning residents of such places until they can be formally accommodated, or rendering them homeless through eviction, they need to be supported where they live or provided with alternative accommodation. </p>
<p>The living environments of the poor can be made less risky. The epidemic of shack fires can be reduced with fire breaks and fire fighting infrastructure. Similarly, the risk of fire in inner city buildings can be reduced by enforcing tried and tested fire regulations: ensuring that fire escapes and fire fighting infrastructure are functional. Authorities should compel landlords – whether informal or formal – to implement them. </p>
<p>These and many other measures – rather than the impulse to “eradicate” – are the basis through which society cares for vulnerable people.</p><img src="https://counter.theconversation.com/content/212732/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gauteng City-Region Observatory (GCRO) is primarily funded by the Gauteng Provincial Government. </span></em></p>Inner city occupations and shack settlements alike are the inevitable consequence of the fact that huge populations of people have to get by without a living wage.Richard Ballard, Chief Researcher: Gauteng City-Region Observatory, Wits University and University of Johannesburg, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.