1 / 21

Balancing Employment & Social Security Policies for Sustainable Growth: A Critical Dilemma

This presentation discusses the challenges of balancing social security & employment policies to ensure a basic standard of living while fostering long-term labor-absorbing growth. It explores rising unemployment rates across race groups, the impact of public sector employment, and the need for job creation to meet targets. The document also examines the cost implications of various interventions, such as infrastructure development and social security expansion, in addressing the urgent need for job opportunities.

royt
Download Presentation

Balancing Employment & Social Security Policies for Sustainable Growth: A Critical Dilemma

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Presentation to:the Joint Budget Committeeon the Medium Term Budget Policy StatementEmployment & Social Security November 19, 2003 Dr. Miriam Altman Dr. Ingrid Woolard Employment & Economic Policy Research Programme Human Sciences Research Council Maltman@hsrc.ac.za iwoolard@ hsrc.ac.za

  2. Critical dilemma • Finding balance, in context of massive social imperatives • Balance between • Social security to ensure basic standard of living • Employment & investment policy to ensure longer term labour absorbing growth path • Trade off does exist

  3. Employment

  4. Unemployment rising across race groups • Implications for most categories of workers & graduates to find work • Especially problem for black workers & graduates • Contrary to perception, still easier for white graduates in private sector

  5. Employment by sector

  6. GDP & Formal Employment If taken from 1998, formal private sector employment growing with GDP Note context: Falling real average incomes of low to medium skill formal sector workers About 500,000 people called ‘employed’ earn ‘in-kind’ and do not earn money Public sector employment seems to be weighing down on employment

  7. Employment Objectives Gov’t and ANC have unemployment goal = ½ unemployment by 2014 • This would mean unemployment at about 15.3% • Would require generation of R 4.1 mn net new jobs or avg of 372,000 jobs created annually. • Estimate that economic growth & existing interventions could result in 1.8 mn jobs • Some interventions required to address creation of remaining 2.3 mn jobs or 209,000 per year. • If created by public procurement – very serious financial implications (eg. @ R50,000 per job, would cost R 10bn per year, on additive basis)

  8. Some alternative sources being debated = ? • Infrastructure • Expanded Public Works Programmes • Expanding social services • Social security – esp for shortfall • Recognise complementarity in spending to meeting basic needs & creating employment

  9. Construction expenditure – projections (deflated)

  10. Ability to deliver???Actual and Planned Capital Expenditure of Local Government 1996 – 2001 Source - Eskom

  11. Expenditure on ECD & HIV Home Care(deflated) 2003/4 - 2005/6 estimates • Huge need, room for expansion, massive employment creator • Approx. 1.8 million people in formal community services (vs. approx 250,000 in construction) • Complementarity – ARV roll-out, orphan care, home care, ECD, etc

  12. Social Security

  13. Year households with wage-earners (m) % of households with wage-earners 1995 6.2 71.3% 1997 5.9 63.3% 1998 5.9 63.4% 1999 7.4 67.9% 2000 7.8 70.1% 2001 7.5 68.5% 2002 7.2 66.0% Household access to wage income

  14. Many poor households rely entirely on grants • Poorest 20% of households: • 19% have grants as main source of income • Next poorest 20% of households: • 28% have grants as main source of income

  15. Social Security Spending Source: SOCPEN October 2003

  16. Old Age Pension • Level of grant is more than twice average per capita income for Africans • Generous by international comparisons (1.2% of GDP) • Take-up is very high (close to 100%?) • Gender sensitive – more than twice as many women as men get the grant • Reaches many households with children

  17. Old Age Pension

  18. Child Support Grant • HSRC estimates that there are 6 million potential CSG beneficiaries under the age of 9 • Only 3.8 million have registered to date, but • Registrations have been increasing dramatically – • more than 1 million children added since March 2003 alone

  19. Disability • Number of beneficiaries grew by 36% between February & October 2003 • Regional variation suggests that take-up may continue to grow:- • e.g. in Limpopo 3% of adults receive disability grant vs 7% of adults in Eastern Cape

  20. Foster Care • 180 000 children currently • Growing slowly: AIDS orphans may  pressure Roll out of ARV should slow growth

  21. Concluding remarks • Balance between social security & employment imperatives could have serious budgetary implications in future • Required job creation to meet employment targets could cost R 10bn on additive basis. • Potential for policy complementarity • Fiscally sustainable? • Social security --- • Extended Child Support Grant. • The aging of the population • The impact of AIDS illness • Are we effectively counting potential beneficiaries? What are the possible cost implications?

More Related