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Half measures: the ANC's unemployment and poverty reduction goals

Charles Meth

University of KwaZulu-Natal

Development Policy Research Unit, Working Paper 04/89

December 2004

Posted with permission of the Development Policy Research Unit at the University of Cape Town:
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Taking as its starting point, the ANC's election priorities of halving poverty and unemployment, the paper reviews pronouncements of the ANC in conference, and in government, in an attempt to discover more precise specifications of the two goals, and what they entail. As far as unemployment is concerned, these are shown to depend, in the first instance, on what is understood by 'halving' (rate of unemployment or number unemployed; official or expanded). Simulations suggest that under the most optimistic conditions, halving the official rate of unemployment would require 3.7 million jobs to be created between 2004 and 2014. Halving the number of expanded unemployed under pessimistic assumptions about the growth rate of the economically active would require 11 million jobs in the same period.

Unlike unemployment, poverty levels can, through the social security system, be directly affected by government. One of the goals of the United Nations Millennium Declaration is to halve absolute poverty (defined, in the absence of a national poverty line, as being below $1(US)/day). Although there is some confusion in government about the goal (one Department of Social Development document refers to halving the number of poor), that should easily be dispelled. Problems in the case of this goal result from the inability of researchers to determine the numbers of people below the line denoting 'absolute' poverty. In the first place, there is no agreed poverty line. This is less important than the next problem - the poverty of the statistics from which poverty estimates have to be constructed. One aspect of this is the difficulty of estimating the value of the 'social wage' (social spending) to poor individuals and households.

Given the margin of ignorance in the data examined, it is probably impossible to say much about poverty headcounts, rates or gaps at the poverty line chosen to denote absolute poverty. As the poverty line is raised, the number of poor stabilises at a high level (roughly 20 million). It shows little sensitivity to increases in the assumed values of the social wage.

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