Unemployment causing untold suffering in SA

11th June 2010 By: Seeraj Mohamed

Recently, I attended a meeting where unemployed South Africans spoke about their lives.

Most of us who are employed have become insensitive to the plight of the unemployed. Those of us who work on economic policy seem to talk about unemployment as an abstract concept. We discuss employment statistics and talk about discouraged work seekers. We hardly ever talk about the impact of unemployment on individuals and their families. We do not discuss how a discouraged work seeker feels. We tend to have no idea of the desperation and urgency felt by those who are unemployed. The unemployed at the meeting told of suffering, pain and humiliation. They said being unemployed means that you do not eat when you are hungry, but only when someone gives you food. Many people said that being unemployed made them feel useless and suicidal. One woman spoke about her suicidal feelings. One man spoke about his brother who had committed suicide because he was unemployed.

There is strong evidence that there is a link between unemployment and increased rates of suicide. A whole range of socioeconomic ills are exacerbated by unemployment. Levels of depression, aggression and alcohol and drug abuse are some of the problems made worse by unemployment. Many young people, particu- larly young women, are forced to put their health and lives at risk by entering into exploita- tive relationships because of economic despera- tion. Families are unable to afford adequate shelter and sustenance.

Affluent members of our society often believe that unemployment is a choice or is due to character flaws. They seem to think that every- one in society has the same opportunities. They are wrong. Unemployment is a structural problem in South Africa and many other countries. In other words, there is something in the nature of these economies that causes the economy to perform at less than full employment.

Mainstream economic theory holds that the laws of supply and demand will ensure that everyone who wants to work will get a job. There is no such thing as involuntary unemploy- ment in this theory. Unemployment occurs because people choose unemployment. Later adherents to this theory argued that unemployment was caused by State policies like minimum wages and other policies that affected labour market flexibility. They also argued that trade unions that could act like monopolists that set prices above market prices triggered market distortions and unemployment.

John Maynard Keynes, writing in the aftermath of the Great Depression, stated the obvi- ous truth that involuntary unemployment exists. His analysis showed that one cannot separate financial markets from the real economy. Accor- ding to Keynesian theory, it is not State regula- tions or trade unions that lead to economies performing below full employment. It is business cycles, which are an inherent part of capi- talist economies, that cause upswings and downswings that affect employment levels in economies. The bigger the financial sector in an economy, the worse the swings in that eco- nomy. Keynes said that governments could use policies to temper the impact of business cycles in an economy and support more-stable and full employment. Further, adequate regulation of the financial sector could reduce, but not prevent, volati- lity in capitalist economies.

Keynes wrote about the negative impact of unemployment on individuals and society. He saw the devastation of unemployment during the Great Depression. Unemployment has been a huge problem in South Africa for more than two decades now. It wreaks untold hardship on our country. A large proportion of our population suffers through prolonged economic depression. The affluent part of society has learnt to live with unemployment by buying private security and other services. The media has not adequately reported the plight of the unemployed. It has not adequately told the stories and shown the faces of the unemployed.