AIDC’s Economic Justice Programme is aimed at developing alternative perspectives in the field of eco-policy alternatives: i.e. both economic and ecological. We do this in the context of the global crisis and its impact on South Africa and the region as well as growing inequality in South Africa and the associated mass unemployment crisis and the impact this has for the region.
South Africa faces a huge crisis of unemployment. The economy is creating fewer jobs than the number of new people that enter the work force. As shown by official GDP statistics, ever since the end of apartheid profits share of national income has increased over the wage share. Instead of investing the increased profits into creating jobs the greatest proportion has either been invested in speculative investment in the financial sector or invested out of the country. Much of the rest has been paid out in dividends to support the conspicuous consumption of South African and foreign share-holders.
Yet the dominant explanation for SA’s mass unemployment crisis is that it is the high wages and stringent labour laws that is the cause of unemployment. However, according to the National Planning Commission in 2008 one third of all workers employed in South Africa earned less than R1000 and more than 50% of all workers earned less than R2500 per month. When one takes into account that these averages include the extremely high salary scales of top management in both the private and public sectors it becomes clear that poverty wages is the dominant reality for most working South Africans.
There has also been a dramatic increase in casual and informal employment. It is now estimated that 40% of the labour forces works outside of permanent employment governed by a formal contract. Again this would suggest that the unemployment crisis in South Africa is neither a result of high wages nor stringent labour laws. An alternative analysis of SA’s mass unemployment crisis and high levels of inequality needs to be provided.
The Economic Justice programme aims to provide critical analysis of state economic policies and economic injustices, support grassroots campaigns against austerity, and develop progressive proposals for taxation, industrial development, and social support.
The Economic Justice programme covers the AIDC’s oldest area of work, beginning with research into Apartheid debt and the post-Apartheid neoliberal turn. It has since then expanded into covering work around the Universal Basic Income Grant, illicit financial flows and wage evasion, progressive taxation, and alternatives to neoliberal policy making.
The Economic Justice programme’s current priorities are the national anti-austerity campaign, the call for a Universal Basic Income Grant, and the Global South Project to Combat Illicit Financial Flows.
End austerity and regressive taxation
Amidst discussions about how the economy should be restructured post-Covid-19, we are already seeing the consolidation of a neoliberal macroeconomic framework in large parts of the world – particularly in developing countries. In other words, going back to the old normal, but this time more intense than before. A recent report, Global Austerity Alert, indicates that, in 2021, 154 countries will implement major budget cuts. And that’s a trend that continues at least until 2025. Austerity purports to be a strategy for reducing escalating state debt. But alternative strategies exist, including curbing corporate profit shifting, tax reform and reallocation of surpluses in state funds. There is no chance of this situation improving unless the current economic strategy changes. To change it requires an evidence-based people’s campaign presenting alternatives to austerity measures. Some underlying principles of this framework include:
- Austerity budgets: reduction in the level of public spending on social services and the shrinking of the public sector wage bill;
- Perpetuation of an export-oriented growth path driven by the extraction of minerals and commercial agriculture. This is enabled by greater levels of trade liberalisation and the further deregulation of financial markets; and
- Creation of an enabling environment for greater private sector involvement in the economy. This includes the roll-out of public-private partnerships and the increased privatisation of essential services.
Programme Objectives
Popular civil society organisations, especially those campaigning for decent work, a living wage and solutions to unemployment, have utilised AIDC research, analysis and popular education and have increased their capacity for carrying out advocacy and raising public awareness at a local and national level in regard to pro-poor economic policies.
