In the echoing vacuum left in South Africa by President Jacob Zuma’s indecisive leadership, many of the nastiest, most cynical opportunists are fast rising to the top. The looting of state resources by ruling party officials has become brazen, backed by thuggish threats to rivals or journalists who threaten to reveal this rampant corruption.
Another trademark of Zuma’s incumbency is precisely what Franz Fanon, writing about earlier liberation movements, portrayed as the temptation for the recently oppressed to mimic the worst status paraphernalia of their former oppressors. There seems to be an obsession, starting with the president, with flashy trappings of power. This includes huge ministerial police convoys, blue lights flashing and sirens wailing, to long stays in the most expensive five-star hotels while their official residences lie empty.
Ominously, the cabinet recently decided to re-jig the police force, giving them military rankings. The new police commissioner, best known for his taste in dressing like a sharp gangster, will now have a swanky uniform and insists on being called “General.”
All this is accompanied by a seeming lack of new ideas about how to address our vast inequalities – inherited from apartheid but growing deeper. A sign of this desperation is that last month President Zuma announced in his state of the nation speech at the idea of a “wage subsidy” aimed at creating jobs for unemployed young people. This will be given the most urgent focus”, he said. “Proposals will be tabled”, Zuma promised, “to subsidise the cost of hiring young workers, to encourage firms to take on inexperienced staff.”
It’s an idea that governments round the world resort to when they are too timid to take bold action. History shows that such a scheme can all too easily become a reverse Robin Hood sting: propping up the desperately poor by giving hand-outs to the rich.
It started with the Speenhamland System in England in the 18th century. With poor harvests and a war against the French, many were starving. Fearing riots – or worse – justices of the peace from Berkshire met at the Pelican Inn in the village of Speenhamland in May 1795 and came up with a scheme that, essentially, is known today as a “wage subsidy”. Based on a sliding scale, related to the price of bread, earnings of workers paid starvation wages were supplemented by payouts from parish funds.
The Speenhamland justices rejected the idea of a minimum wage, opting instead for this subvention from the public purse. In effect, the African National Congress has now done the same.
The flaw soon became apparent and remains relevant today: the system allows employers to continue to pay below subsistence wages because the parish (then) or the government (now) makes up the shortfall. Authorities finance employers to continue paying miserable wages. The result is that employers are tempted to get rid of employees earning a living wage and instead take on a work force that is subsidised by the state.
This is exactly what happens in the United States. My American sister-in-law, left alone with three children to support, could only find work as a sales assistant for a major retail outlet, thanks to a scheme ostensibly to help single mothers back into employment. The US government recognised the wretched wage was not enough to live on, so it was topped up by a “food voucher” scheme. In other words, the US taxpayer bankrolled a powerful corporation to pay their workers peanuts.
All the other lowly assistants were on this system and the company never allowed them to work more than 28 hours a week, as other benefits would have kicked in. When they had been employed long enough to qualify for a full-time job, they were promptly “let go” and other subsided workers taken on.
As it stands, the wage subsidy often remains a poverty trap. It’s a scam.
This would not be the first well-intentioned scheme that has backfired here. Black Economic Empowerment, for example, has not helped the poor black majority. It’s just changed the colour coding at the very small, top end of South Africa’s vast inequality gap.
Funny. When the state gives support to the poor, there are mutterings about “handouts” and creating a “dependency culture”. The rich were voicing exactly the same gripes in the 18th century. But when public money bolsters employers to pay poverty-level wages, suddenly this is “in the national interest”, creates employment and has wonderful knock-on effects for “social equity” and “community benefits.”
We are now hearing that same guff from the ANC, not long ago a liberation movement, and from prominent politicians – many of whom have become rich thanks to corrupt government tenders or peddling their influence for backhanders.
The Speenhamland System was introduced in a panic to avoid social unrest. In South Africa today, the number of popular – and often violent – protests at miserable shack settlements all over the country is rising. Introducing a “wage subsidy” is not going to solve this problem. Nor is giving the police military rankings or puffed-up uniforms.
That’s the well-travelled road of repression, not liberation.
