There Is a Widespread Debate on How Greater Economic Security Can Be Established in the 21St Century Through an Employment Led D

South Africa’s Community Work Programme (CWP): A case study of Bekkersdal

Paper presented to the International Centre for Development and Decent Work (ICDD) Research Cluster 4.2 titled ‘Work, livelihoods and economic security in the 21st century: India, South Africa and Brazil’. Third Workshop held at the University of the Witwatersrand, Johannesburg, 9-10 May 2011.

Themba Masondo

Society, Work and Development Institute (SWOP)

(Draft – Not to be Quoted)

Introduction There is a growing consensus particularly in developing countries that the private-sector can no longer be relied upon to absorb surplus labour (Phillip, 2010; Antonopoulos, 2007, Minsky; 1986, Bhaduri, 2004) or what Lewis (1954) terms „unlimited supply of labour‟. Bhaduri (2004) suggests that „when the market fails to provide a solution, the government must be willing to act‟. Through the concept of a reserve army of labour, Karl Marx (1981) characterized chronic unemployment as an inherent feature of the capitalist mode of production. Poverty, unemployment and income inequalities have deepened under the current neo-liberal global regime (Standing, 2008). An employment guarantee is one of the ways in which governments can address the social and economic challenges brought about by neo-liberal globalization.

The concept of employment guarantee has been a subject for debate in the development discourse and development sociology and economics in particular (Phillip, 2010; Standing, 2008; Antonopoulos, 2007). The overarching objective of this research project is to investigate the socio-economic impact of the Community Work Programme (CWP) in a community in the west of Johannesburg called Bekkersdal. Based on the review of existing literature, this paper makes an attempt to highlight some class dynamics in Bekkersdal. The paper is divided into two main sections. The first section begins with a theoretical discussion on the concept of an employment guarantee vis-à-vis its impact. This section outlines different theoretical perspectives on the idea of an employment

1 guarantee. The second section deals with class dynamics in Bekkersdal. This section demonstrates the process of class formation and how this has impacted on social and political stability in this community. Employment guarantee schemes: a theoretical analysis Employment guarantee has evolved into being a key policy instrument in ameliorating endemic poverty and providing income relief through direct job creation (Blaug, 1963; Dreze and Sen, 1989; Kaboub, 2007; Antonopoulos, 2007; Phillip, 2010). Minsky (1986) argued that EGSs are suitable for job creation as this creates „an infinitely elastic demand for labour at a floor or minimum wage that does not depend upon long and short run profits of businesses‟. EGSs require governments to create employment for people who „are willing and able to work at or marginally below the prevailing informal sector wage‟ (Papadimitriou, 2008:6). The idea is that government promises to make a job available to any qualifying person who is capable and willing to work (Wray, 2009).

The claim that governments have an obligation to guarantee employment to its citizens remains ideologically contested. According to Kumar (2010), there are five different theoretical perspectives on employment guarantee, namely: the rights/activist, liberal/neo-Keynesian, communitarian, political realism and market fundamentalist perspectives. The rights perspective holds that the state has a legal duty to protect and guarantee its members economic and social rights and security. Exponents of this perspective argue that the right to work is a fundamental prerequisite for social justice (Wray and Forstater, 2004) and that work is a fundamental human right. Amartya Sen (1999) argues that the right to work is critical for reducing unemployment and many social ills associated with it. The rights perspective is statist in that it considers the state as the main guarantor of the rights of the people (Kumar, 2010)

The neo-Keynesian perspective supports an employment guarantee on the grounds that it has multiplier economic effects such as increasing public investment and economic growth. It is assumed that an employment guarantee will translate into increased spending (demand for goods and services) and growth in private sector productivity (Wray, 2009; Minsky, 1986; Forstater, 1999, Wray and Forstater, 2004; Sen, 1999,

Bhaduri, 2008). The major limitation with this perspective is that it focuses on the economic multipliers and ignores possible social multipliers like social cohesion, reduction of crime, substance abuse, family disruption. The communitarian model also supports the idea of an employment guarantee on the basis that it has a potential to strengthen and democratise institutions of local governance like the gram panchayats in rural India (Kumar, 2010). The assumption is that the solution to the widespread poverty in most developing countries lies in giving voice and power to the poor and that an employment guarantee can do exactly this. The political realist perspective is not clear as to whether it supports employment guarantee or not, instead it speculates reasons why governments institute it. This perspective argues that political parties in government introduce employment guarantee simply to get electoral support and remain in power (Kumar, 2010).

The libertarian or market fundamentalist perspective is distinctive in that it rejects the idea of employment guarantee simply because it is „a waste of money‟ (Kumar, 2010) ,economically unsustainable, minimizes an incentive for people to work and that it encourages shirking as workers will be less concerned about losing their jobs in the private sector (Sawyer, 2003). This perspective argues for a sunset clause on an employment guarantee. These perspectives are often overstretched in such a way that they can be seen as separate and contradictory.

I argue that the rights/activists, neo-Keynesian and the communitarian perspectives can help us best understand and analyze the socio-economic impact of the CWP, both on the individual participants and their communities. The rights perspective is important in that it provides the principled basis in favour of an employment guarantee. The government of South Africa has a duty to provide work and social security to their citizens. An employment guarantee should not only be viewed from the right to work perspective, it also has complementary economic and social multipliers.

Bhaduri (2004) suggests that a considerable degree of government decentralization is neccesray for employment guarantee schemes to be successful. This means that local

3 governments should be strengthened and not simply viewed as „implementing agents for the national government‟ (Bhaduri, 2004). This requires conferring on local government some degree of authority and fiscal autonomy. It is also important that an employment guarantee scheme is run in a transparent manner at all levels. Participants must not only have the right to know the budgetary allocation and expenditure but they must be part of the decision making process on the kind of work to be done (Bhaduri, 2004).

Lack of transparency and accountability can only serve as an obstacle to the success of employment guarantee schemes. Hirway (2006) has set the conditions which must be fulfilled in order to secure the success of employment guarantee schemes. The policy design of the EGSs must be structured in such a way that allows for a generation of a „continuous flow of employment‟. This is likely to make the scheme more attractive and convincing to the targeted people. The scheme also needs to be „planned in such a way that keeps creating assets that generate sustainable employment avenues in the mainstream economy for a part of labour force that demand work under employment guarantee‟ (Hirway, 2006:2).

Phillip (2010) suggests that an employment guarantee should be seen as an interface between social and economic policy. This framework will be helpful in investigating socio-economic impact of the CWP. Exponents of the idea of employment guarantee indicate that unemployment has tremendous social and economic costs, both to the unemployed and society in general (see Forstater, 2009). Phillip (2010) argues that an employment guarantee is not only about income security for the participants but also has other social, economic and institutional impacts. Access to regular income can catalyze local economic development as access to regular income contributes to aggregate demand at local level (Forstater, 2009; Phillip, 2010; Antonopoulos, 2008; Imai, 2008). The idea is that through regular income to the participants an employment guarantee will translate into further increased spending in the local markets, thus stimulating economic activity (Phillip, 2010).

Employment generally contributes to the social inclusion, self esteem and dignity of individuals, families and communities (Tcherneva and Wray, 2005; Antonopoulos, 2008). Sen (1999:94) argues that unemployment can have far reaching consequences beyond loss of income: „There is plenty of evidence that unemployment has many far- reaching effects other than loss of income, including psychological harm, loss of work motivation, skill and self-confidence, increase in ailments and morbidity (and even mortality rates), disruption of family relations and social life, hardening of social exclusion and accentuation of racial tensions and gender asymmetries.”

COSATU (2010:68) also suggests that an employment guarantee can promote social cohesion by „reducing problems associated with unemployment, such as crime and malnutrition‟. Forstater (2009) further shows that this may also decrease racial and ethnic tensions. The institutional impact of an employment guarantee includes „stronger participation in local development planning, the growth in local capacities to indentify, organize and manage work‟ (Phillip, 2010:21). Some scholars have argued that an employment guarantee can also serve an instrument to empower women (Pankaj and Tankha, 2010; Jandu, 2010; Antonopoulos, 2007).

Community Work Programme (CWP) The implementation of the Extended Public Works Programme (EPWP) and CWP in South Africa is a sign of government‟s commitment to acting as an Employer of Last Resort (ELR). The EPWP is not an employment guarantee scheme as it offers short-term unpredictable work whose continuity depends on the availability of projects. Phillip (2010a:6) argues that EPWP in its current form cannot easily be converted into an employment guarantee because the programme „was designed to increase the labour intensity of existing government investment‟. In its current form, the EPWP creates short- term employment to people when there are projects. The idea is that participants do not only get income but also acquire skills, which they can utilize to seek employment elsewhere upon completion of their participation in the EPWP.

It is for this reason that this paper does not focus on the EPWP in great detail, because whilst it remain an ELR, it is not an employment guarantee. The CWP is an initiative of the Office of the President of South Africa and a policy research nongovernmental organisation called Trade and Industrial Policy Strategies (TIPS) (Phillip, 2010). Launched in 2007 under the auspices of the Second Economy Strategy Project, this programme was inspired by the experience of India‟s Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). The CWP form part of the government‟s efforts to address challenges in the „second economy‟. In 2003 Thabo Mbeki, the former president of South Africa, introduced the concept of the „second economy‟ as a metaphor to describe the economically excluded and downtrodden (Webster, 2010). The government of South Africa characterized the second economy as „mainly informal, marginalized, unskilled economy, populated by the unemployed and those unemployable in the formal economy‟ (Government of South Africa, 2003). The discourse on the „second economy‟ was a necessary response by government to the deepening social inequality and poverty in the country.

The idea behind the CWP was that it would supplement the already existing livelihoods strategies of participants thus ensuring social security through work. As Phillip (2010a:13) puts it, this programme is an „employment safety net and not an employment solution‟. The national government has announced its plan to expand the programme by operating it in at least two wards per municipality by 2014 (Philip, 2010). The CWP is not an employment guarantee scheme per se, but its operation offers „a new modality for the delivery of public employment‟ (Phillip, 2010:8). Unlike the EPWP, central to the policy goal of the CWP is to develop „an approach that could be used to implement an employment guarantee scheme‟ (Phillip, 2010:8). However, it is worth mentioning that the modus operandi of the CWP is designed like any other employment guarantee in that participants are guaranteed work and employment as long as they want to work.

In terms of its design, the CWP provides access to work for two days per week and participants are paid R60 each day worked—this comes to R480 per month for each participant. The target is to have about 1000 participants per site who would

6 interchangeably work throughout the week. At the end of the week, each participant should have worked for two days. There are no restrictions on a number of family members who can participate in it. In August 2010, the scheme had 70, 469 participants across the country (Phillip, 2010). The programme is targeted at marginalized areas, both rural and urban. The actual project management and coordination of the programme is done by not-for- profit NGO‟s, namely Seriti Institute and Teba Development. Through participatory processes, the community decides on the kind of work which is to be done in the CWP. The common work done in includes home and community-based care, food gardens, community safety, environmental services, storm-water drainage, cleaning of streets and other public institutions such as schools, clinics and churches.

The case of Bekkersdal Similar to the origins and development of many towns in South Africa, Westonaria started as a mining town with a variety of black and white inhabitants (RAU, 1996). The first mine established in this area was the Venterspost mine in 1934. The establishment of this mine marked the beginning of a new town which would later develop into a big community with satellite townships and suburbs. As one of the largest gold-mining area in the country, Westonaria was a source of attraction to many black migrant workers from rural areas in South Africa and neighboring countries. In the beginning most mine workers were accommodated in compounds, whereas others who worked as gardeners and domestic workers stayed in white suburbs with their employers.

The successful sinking of many shafts led to an increase in the demand for black cheap labour. However, majority of the mineworkers worked under contracts with very little job security. Mine workers whose contracts were terminated erected informal settlements with the hope of getting employment around the area. These settlements assumed a more permanent character with more black people from the mines and surrounding farms settling (RAU, 1996). These settlements culminated in the development of permanent townships and semi-rural areas in Westonaria. The influx of job seekers in Westonaria gave rise to the development of townships in which a large number of blacks settled.

Westonaria today comprise of satellite of semi-suburbs and townships of Hillshaven, Glenharvie, Venterpost, Libanon, Bekkersdal, Zuuberkom and Simunye. The area is situated approximately 45 kilometers West of Johannesburg and about 60 kilometers from Vereeniging. It is located within the area of jurisdiction of the West Rand District Municipality in the Gauteng province. Westonaria has 139 000 inhabitants, with 52 955 people living in formal areas and 76 045 in the informal areas (Westonaria Local Municipality). The mining sector remains a driving sector of the local economy. The focus for this study is on one of the African townships in Westonaria called Bekkersdal.

Bekkersdal is one of the biggest townships in Westonaria. The history of this township „reflects to a great extent the role and position of the blacks in Westonaria outside the mines‟ (RAU, 1996:156). This famous township started as an informal settlement in the mid-1940‟s but later transformed into a permanent township characterized by significant political and economic activities. In the main, most inhabitants of the area were African black people employed as mineworkers, farm workers, and domestic workers. This area started to develop as an established and properly administered township when the town council took control of it in 1945. By 1960 Bekkersdal was „a well planned township which made provision for the needs of its residents in a variety of ways‟ (RAU1996:151).

In his study on the relationship between social differentiation, violence and their implications for development initiatives in African townships, Crankshaw (1996) explores the underlying factors driving social stratification in Bekkersdal. In doing this, Crankshaw uses housing as the basic analytical framework to understanding the dynamics involved in class differentiation and stratification in Bekkersdal. According to Crankshaw (1996) the growing social conflict in the township was due to, in class terms, the struggles over access to resources and the fact that this community increasingly becoming more heterogeneous. Crankshaw analyses the conflicting interests of different categories of residents in Bekkersdal—namely, home owners, council tenants, backyard shack tenants, squatters and hostel residents—to show the diversity of interests may facilitate the fragmentation of communities thus perpetuating social conflict.

The chronic shortage of housing in Bekkersdal in the late 1990‟s was as a result of processes of population growth, in-migration and apartheid housing policy (Crankshaw, 1996). The growing differences in housing provision can help us make sense of the class dynamics in Bekkersdal. According to Crankshaw (1996:56) these class dynamics have „both created and reinforced the social divisions between residents in different types of accommodation‟. In the 1950s and 1960s the population in Bekkersdal was generally homogenous with little difference in occupation and income. Most residents were probably in similar jobs in the surrounding mines.

The process of class formation begun to take shape in the late 1960s and early 1970s with a growing number of black Africans experiencing upward occupational mobility into clerical and semi-professional jobs (Crankshaw, 1996; Seekings, 2000). Quite ironically, this process was simultaneously accompanied by a „large and growing unemployed “underclass” who were poorly educated and unskilled‟ (Crankshaw, 1996:57). The economic differentiation in many black townships in South Africa, including Bekkersdal, increased particularly in the late 1970s and 1980s—this would later have important implications for the social and political stability in most of these townships. The deepening of these class differences amongst Bekkersdal residents „reinforced the inequalities in housing provision‟ (Crankshaw, 1996:57).

In order to explain the process of class formation in Bekkersdal, Crankshaw (1996) identifies five distinct types of accommodation: council tenants, home owners, backyard shack tenants, squatters and hostel residents. Those who live in council houses moved into these houses when they built by the apartheid regime in the 1960s and 1970s. Many of the council tenants „tend to belong to an older generation of unskilled manual workers who earn low wages….this is due to their low level of formal education which, in turn, is largely a product of their rural backgrounds‟ (Crankshaw, 1996:58). The beneficiaries of upward occupational mobility into well paid jobs have become home owners in the new housing schemes developed by the private sector. The home-owners can be characterized as middle class who completed high-school and in semi-professional jobs.

On the other hand, there are backyard shack tenants who comprise largely of the younger generation who did not finish schooling and in „low paid occupations that their parents were in‟ (Crankshaw, 1996:57). This group is forced to reside in the backyard shacks because the government no longer provides low-cost formal housing, and they cannot afford to buy their own houses. Unlike the homeowners, this group has not experienced upward occupational mobility. Their occupations are likely to be those of a „miner, truck driver, general labourer and domestic servant or gardener‟ (Crankshaw, 1996:60).

The squatters consist in the main of new comers searching for jobs, and where they live they are less likely to share the same social backgrounds, language or political affiliations (Crankshaw, 1996). Hostel residents are different from the squatters and backyard shack residents in that historically they were „no control over who may or may not live in hostels‟ (Crankshaw, 1996:63). The hostels in Bekkersdal generally house young rural migrants free of charge „while they find themselves employment and consolidate their urban networks‟ (Crankshaw, 1996:63). Some hostel residents who are employed work as domestic servants, gardeners, garbage collectors, taxi and truck drivers. Crankshaw‟s (1996) study shows that the demise of the apartheid regime has deepened class divisions in South African townships. Hostels remain homes for either the unemployed or people with the lowest income.

Crankshaw (1996) argues that these social divisions undermine social cohesion and solidarity in the community. The better educated with access to private ownership housing schemes are worried about the value of their properties in the face of encroaching informal shack settlements. Those in backyard shacks are infuriated by the high rents they are expected to pay to their landlords. In turn their landlords are opposed to any housing upgrading schemes since this may threaten the income they get from the backyard shack dwellers. Some council tenants earn income from renting shacks in their backyards, and in some instances this is the only income that the household receives.

Housing upgrading may also interrupt the lives of foreigners and illegal immigrants (largely Mozambicans) in squatter settlements as they will not qualify for the state‟s capital housing subsidy. Crankshaw (1996) suggests that any plan to upgrade housing in the informal settlement is likely to be opposed by some sections of the community due to vested interest with the status quo. It is important that government does not assume what „development‟ means to the people as this may have negative repercussions.

REFERENCE LIST Antonopoulos, R. 2007. „The Right to a Job, the Right Type of Projects; Employment Guarantee Policies from a Gender Perspective’ working paper# 516, for the Levy Economics Institute of Bard University, September 2007

----, 2008. „Impact of Employment Guarantee Programmes on Gender Equality and prop- poor economic development‟, policy brief: Case study of South Africa, the Levy Economics Institute of Bard College: New York

Bhaduri, A. 2008. „Growth and Employment in the era of Globalisation: Some lessons from the Indian experience‟ ILO Asia-Pacific Working Papers

----, 2004. Guaranteeing employment in http://www.mail-archive.com/[email protected]/msg00036.html

Blaug, M. 1963, „The Myth of the Old Poor Law and the Making of the New‟ Journal of Economic History, 23:151-184

Crankshaw, O. 1996. „Social differentiation, conflict and development in a South African township‟, Urban Forum, 7:9, 54:68

COSATU. 2010. ‘A Growth Path towards Full Employment: a COSATU Policy Perspective’, COSATU Publications: Johannesburg

Dreze, J and Sen, A. 1989. Hunger and Public Action. Oxford: Clarendon Press

Forstater, M. 1999. Public Employment and Flexibility. Public policy Brief no. 30, The Levy Economics Institute of Bard College

----, 2009. „Working for a Better World: the social and economic benefits of employment guarantee‟ in http://www.economistsforfullemployment.org/knowledge/presentations/Session1_Forstat er.pdf

Government of South Africa. 2003. „Towards a Ten Year review: synthesis report on the implementation of government’. Policy co-ordination and advisory service, Pretoria.

Hirway, I. 2006. ‘Enhancing Livelihood Security through National Employment Guarantee Act” Toward Effective Implementation of the Act’. Working paper 437, Centre for Development Alternatives and the Levy Economics Institute of Bard College

Imai, K. 2008. ‘The Employment guarantee scheme as a social safety net’ Department of Economics and St Antony College, University of Oxford

Jandu, N. 2010. ‘Employment Guarantee and Women’s Empowerment in Rural India’ Working paper, India‟s Ministry of Rural Development Kaboub, F. 2007. ‘Employment Guarantee Programs: A Survey of Theories and Policy Experiences’ Working Paper no: 498. Annandale-on-Hudson, New York. The Levy Economics Institute of Bard College

Kumar, A. 2010. ‘A critical assessment of NREGA” presentation at workshop ‘Developmental Trajectories: India and South Africa’, organized by the Tata Institute of Social Sciences and the International Center for Development and Decent Work, 03 December, Tata Institute of Social Sciences, Mumbai, India

Lewis, A. 1954. Economic Development with Unlimited Supplies of Labour. Manchester School. 20(2) 139-91.

Marx, K. (republished 1981). Capital: Volume 3. England: Clays Ltd.

Minsky, H.P. 1986. Stabilising an Unstable Economy. New Haven: Yale University Press

Pankaj, A and Tankha, R. 2010. ‘Empowerment Effects of the NREGS on Women Workers: A Study in Four States’ in Economic and Political Weekly, Vol.XLV (30), 24 July

Papadimitriou, D. 2008. ‘Promoting Equality through an Employment of Last Resort Policy’ Working Paper No: 545, The Levy Economics Institute of Bard College, Blithewood, New York

Phillip, K. 2010. ‘Employment Guarantee: Innovation at the Interface between Social Policy and Economic Policy’ paper presented at the Development Policy Research Unit (DPRU), October 2010

----, 2010a. „Towards a right to work: the rationale for an employment guarantee in South Africa, in http://www.tips.org.za/files/wesite_-_tips_policy_brief_- _employment_guarantee_four_page_final.pdf

Rand Afrikaans University (RAU). 1996. „History of Westonaria:1937-1991‟ a research report prepared for the Westonaria town council. the report can be accessed at online

12 http://www.westonaria.gov.za/gbWrite.asp?WriteContent=Y&rid=225&tid=downloads& field=document

Sawyer, M. 2003. „Employer of Last Resort: Could it Deliver Full Employment and Price Stability?‟, Journal of Economic Issues, 37 (4):881-908

Sen, A. 1999. Development as Freedom. Oxford: Oxford University Press

Seekings, J. 2000. „Introduction: Urban studies in South Africa after Apartheid‟, International Journal of Urban and Regional Research, 24 (4), December 2000, 882:840

Standing, G. 2008. Work After Globalisation: Building Occupational Citizenship. Cheltenham: Edward Elgar Publishing Limited.

Tcherneva, P and Wray, R. 2003. ‘Can basic income and employment guarantee deliver on their promise’ working paper 42, University of Missouri, Kansas City

Webster, E. 2010. “ „There shall be work and security‟: utopian thinking or a necessary condition for development and social cohesion‟ in Transformation, 72:73 (Special Issue), 225-243

Wray, L.R. 2009. ‘The Social and Economic Importance of Full Employment’, working paper #560, The Levy Economics Institute of Bard College, April 2009

Wray, L.R and Forstater, M . 2004. ‘Full employment and Economic Justice’ in D. Champlin and J. Knoedler (Eds), The Institutional Tradition in Labour Economics. New York: M.E Sharpe.