The domino effect

The pandemic has revealed an even gloomier picture of the labour market – the insecurity of most jobs and the risk of unemployment many South Africans face. Unemployment numbers have exploded, recovery seems unlikely, people are without food, and companies are going bankrupt.

The ill-fated nature of the pandemic is such that hospitality, retail, aviation and other services businesses will feel the negative economic effects more than other industries. The ripple effects of the drop in aggregate demand for goods and services supplied by medium and small businesses puts them at risk of insolvency and consequent job devastation

Some jobs will be gone for good, and so too will many businesses.

Additionally, people employed in these industries are already in precarious and vulnerable positions due to low disposable income that barely covers most basic needs.

The employment devastation is not limited to the stated sectors, and at the same time shows the interconnected nature of key industries and how they sustain each other. To place this into perspective, ICT companies are also service providers to hotels, restaurants and airlines. Therefore, the longer economic inactivity continues (due to lockdown restrictions and Covid-19’s inescapable impact on travel and tourism), the more susceptible to reductions or suspension jobs in ICT industries will become.

The implications confirm a depressing turn: we are all vulnerable because nearly every job is at risk.

Be it an occupation of low, medium or high skill; whether minimum wage or over-the-top executive remuneration; in factories, offices, or on farms; whether employed, self-employed or contracted – nearly every job is at risk.

Read: Could salary cuts be the better devil instead of retrenchments?

For many workers, losing their only income will leave them exposed to the risk of poverty while they struggle to access unemployment insurance benefits. The cumbersome, ineffective and congested application processes will add – are adding – to their struggles.

Furthermore, some are finding out they do not qualify for Covid-19 Temporary Employer/Employee Relief Scheme (Ters) benefits because their employers did not register them with the Unemployment Insurance Fund (UIF), denying workers a chance of at least drawing unemployment benefits to lessen the economic uncertainty caused by the pandemic.

The point here is that many South Africans are in danger of losing their income, face poverty, and are trapped in state of helplessness as they watch Covid-19 wreak havoc on an economic system already characterised by income distribution inequality.

We are also witnessing companies redefining the concept of work, a trend slowly being shaped by technology that has now accelerated due to the pandemic. Businesses are becoming adaptive in their response and have quickly embraced artificial intelligence (AI) interconnected systems to enable remote working.

Some clarity will emerge

It will become clear one day – soon – that it was during this pandemic that companies and industries were finally able to distinctly tell which workers are essential and which occupations can be displaced by technology.

The precarious conditions Covid-19 has put many South Africans in will be a testing time for government, particularly with regards to its broader picture approach. How will it prepare for the economic cycle ahead? What policies can be modified or created to ensure previously discussed industries are not left behind? I have no suggestion because I don’t know.

What I do know is that overcoming this pandemic will require social cohesion, patriotism and solidarity on an unprecedented scale.

For in as much as it has laid bare the cleavages of the labour market, Covid-19 has also shown that the capitalistic notion that the survival of corporates is crucial and more desirable than the survival of workers is mistaken.

There is growing awareness that workers are vital and indeed become more essential in a time of crisis and possible economic recovery. What I also know is that the way forward, however uncomfortable for some, must entail an economic plan that prioritises social wellbeing and has minimum income safety nets for workers.

Lessons from Europe and the US during the Great Depression illustrate that loans and rescue packages availed to business do not produce the presumed upshots of lasting economic recovery if they do not address the inherent unemployment problems, and we have many of those. The pandemic has laid bare the pre-existing socio-economic conditions and inequities, not just in South Africa but across the world.

The crisis has exposed the many flaws in the global economic structures, highlighted the precarity of almost every job, put governments in uncharted waters – and there is no mission control.

It is fair to say that since no single actor is responsible for the after-effects, rebuilding the economy, society and public health requires that all stakeholders contribute. And it starts with one thing: valuing workers, especially those providing essential services, by paying them better.