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The Basic Income Grant: Poverty, Politics and Policy-making
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2. What are the alternatives to a BIG?
Public works programmes:
Creating temporary jobs for the unemployed through public works programmes would cost between R36 billion - R64 billion a year, and that is paying at below the poverty line. A high proportion of the budget, up to 85% in some instances, goes to administration costs. Finally, the possibility of scaling up the public works programmes by 30 times its current 200,000 jobs a year appears next to impossible given the serious project management problems experienced with this existing small roll-out. Other questions, such as how public works programmes could address poverty issues like AIDS orphans, are also relevant.
Thus while one accepts that public works are very important, they cannot be seen as a serious measure to reduce mass poverty.
Create quality jobs:
The creation of millions of quality jobs is obviously the first prize, if this can be done. Unfortunately, key formal sectors shed almost 600,000 jobs between 1996-2001. Some growth appears to have occurred in other sectors, but these new jobs have tended to be mainly low-paid, poor quality jobs.
The reality is that unemployment or informal work is the work situation of approximately 50% of the total workforce. Despite what we hope for, the research of the Taylor Committee found that the creation of millions of quality jobs is not likely to happen for a long time to come.
Redistribution of income-generating assets:
People are poor because they don't have the means to generate an income. The racial distribution of poverty is obviously linked to the racially skewed distribution of economic assets in South Africa. Fundamentally changing this underlying distribution is a necessary goal - but, like public works and quality job creation, the policy outcomes thus far have been dismal (for example, for land, where only 1% was redistributed against a target of 30%). In short, there has been an inability to redistribute assets to the poor on any major scale.
Use existing grants:
South Africa's most effective grant is currently the State Old Age Pension, which is responsible for approximately 50% of rural income. So why don't we just increase this grant instead of introducing a BIG? Because 81% of adults and 76% of children live in households without pensioners, so they would not gain from an increase in the SOAP. The other existing grants have even bigger gaps in coverage.
In short, all these are important strategies that need to be pursued. But none can really claim to be serious alternatives to BIG in terms of denting mass poverty.
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