How can the poor become self-supporting?
Continued significant real growth in incomes will very slowly reduce unemployment, but achieving low, single digit unemployment (currently above 20%) in the next 20 to 30 years will require a number of factors.
Key is education: SA cannot rectify the skills deficit if the standard of education from start to finish is inadequate, nor can it be done if children are not sufficiently housed, fed and supported, which is why child welfare grants are vital.
In the interim, the proper implementation of government’s proposed R3 trillion infrastructure rollout is essential to create jobs for the multitude of unskilled, or severely under skilled.
Labour market inflexibility needs to be urgently reduced, not escalated, to encourage youth employment, while uncertainty over property rights must be resolved and the proliferation of wastage and inefficiency in service and infrastructure provision eradicated.
Enabling the business environment will enable job creation (and raise government revenue). Effective implementation of government’s planned infrastructure rollout has the potential to become a virtuous cycle, doubling GDP and lifting living standards for all, if effectively and consistently implemented, as corruption is eliminated along with other wastages of state resources.
The triple challenges (of poverty, inequality and unemployment) can essentially be removed within 30 years.
In the meantime, rising incomes benefit all either directly, or indirectly through rising tax revenues. There will continue to be a broadening of the social welfare net, and hopefully also an improvement in the quality of social services, where necessary.
However, the funds accruing from tax revenues need to be wisely spent; any wastage of government revenues will impact the poor most substantially and will slow the growth potential of the economy, and hence the potential for incomes to rise faster than currently.