socio-economic issues Archives

by Alex Kinmont

A Universal Basic Income (UBI) is a guaranteed amount of money given to every person regardless of whether they have a job or not. As a form of social security, this could help alleviate poverty and improve quality of life.

The idea of unconditional cash payments is a recent one, brought about as a response to the rise of technology and the fear that machines will take our jobs. Many highly successful entrepreneurs, such as Elon Musk and Mark Zuckerburg, have discussed the idea of a UBI as a potentially necessary answer to the growing problem of poverty and the risks of machines replacing low-skilled jobs.

There is no set definition for a UBI. How much money, to who, from who and how often are undefined. As a new idea not formally implemented, these are all still things which can be debated.

Getting money without working, of course, is controversial.

At first, a UBI sounds impossible. Who would bother working if they got given free money each month? And how could a government afford it? In the context of South Africa in particular, we can hardly afford to provide running water and service delivery, let alone cash payouts.

So, here comes the first hurdle. Where would the money come from?

When Notre Dame burnt down on the 15^th April this year, nearly R14 billion was donated by the world’s elite within days of the disaster, enough to feed over 2 million South Africans for an entire year.

The fire at Notre Dame did more than just burn an historical monument. It served as striking evidence that there is more than enough money out there to drastically, if not fully, close the wealth gap and feed millions. Wealth is simply held by too few.

So what if the world’s 1% were made to pay the UBI bill?

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There is something to be said about the idea of a maximum income allowance, after which a person has to donate their excess to welfare. Imagine if the world cared as much about people who are starving as they did about a building?

70 year old Bernard Arnault, whose family owns LVMH (a.k.a. Louis Vuitton), gave $226 million to Notre Dame. That’s over R3 billion from one family donated in a day.

Should people really be allowed to have more money than they can possibly spend?

So what is to be said then, of the argument that no one is going to want to work if their bills are not dependent on it?

Those against a UBI say it will let people be lazy and be enormously expensive. They argue it would crash our economy. Without reason to work, will anyone work? This is a valid point especially when one considers less attractive jobs, such as those which involve strenuous physical labour.

At the same time, a UBI could provide the platform needed for millions of people to think further and follow their entrepreneurial dreams. Will this opportunity for innovation and future work outweigh the cost of those who decide to work? Who knows what could come of that freedom?

Those for UBI say it will allow people to focus more on their well-being and fight their way out of poverty, as well as having a safety net to allow for taking chances in innovation and business. Mark Zuckerburg said himself that he was able to risk focusing all his attention and investments on Facebook because of the financial stability he had from his father.

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Will a UBI let people stop working and crash the economy? Or will it cultivate innovation?

Perhaps instead of calling it a UBI we should call it improved social welfare. The specifics around a UBI need to be carefully determined and will differ by region and country. This will influence whether a UBI collapses the workforce or inspires it. Free money to everyone, including the wealthy, is likely unrealistic. But what about better distribution of wealth to those under the poverty line, who have been unable to find a job?

The result would be the same sized workforce but a better standard of living for the unemployed.

The burning of Notre Dame proves that a UBI is possible if we just learn to share. So is it reasonable to demand that the ultra-wealthy pay the bill?

According to the African Economic Outlook, African countries are working towards improving the quality and skills levels of their labour forces. The increasing recognition that higher technical and vocational skills are crucial in enhancing competitiveness and contributing to social inclusion, decent employment, and poverty reduction has been a strong incentive for reform. The term technical and vocational skills development (TVSD) refers to the acquisition of knowledge, practical competencies, knowhow and attitudes necessary to perform a certain trade or occupation in the labour market. For the scope of this report, TVSD corresponds to the broad UNESCO and ILO definition of technical and vocational education and training (TVET).

Competencies can be acquired either through structured training in public or private TVET schools and centres, or through practical experience on the job in enterprises (work-place training in the formal sector and informal apprenticeship), or both (the so-called “dual” training, involving a combination of work-place and institution based training).

It is generally recognised (and is key to the ILO Decent Work Agenda) that the development of relevant skills is an important instrument for improving productivity and working conditions, and the promotion of decent work in the informal economy, which represents the major employer in Africa.

Education and skills can open doors to economically and socially rewarding jobs and can help the development of small informal-sector businesses, allow the re-insertion of displaced workers and migrants, and support the transition from school to work for school drop-outs and graduates. Ultimately, developing job-related competencies among the poor, the youth and the vulnerable is recognised as crucial to progress in reducing poverty.

The development of job-related skills is, therefore, not only part of the countries’ human resource strategies but also of their economic-growth and poverty-reduction strategies. The inclusion of a skills-development component in country poverty reduction strategy papers (PRSPs) and national development plans is, thus, becoming more common.

Generally, investing in knowledge and skills is seen by many governments as the cornerstone of developing an employable and globally competitive work force.

A skilled and knowledgeable work force improves the investment climate because skilled workers create an attractive economic environment for investors. The returns to increasing investments in skills development tend to be high in rapidly growing economies, and can be low or non-existent in situations characterised by weak growth and poor governance. Among the most critical supporting factors of better skills utilisation will be the macroeconomic reforms necessary to promote growth, and thus expand the opportunities for business development and employment. Strategies to promote national growth should emphasise skills development for the sectors with the most promising employment prospects if they are to have a maximum impact.

Important reforms to promote vocational and technical skills have been initiated both in the formal and informal sectors in a number of countries reflecting a more integrated approach to education, training and employment. A renewed emphasis on skills development has also been echoed by the African Development Bank High Level Panel which has recommended skills development as a critical pillar of the Bank’s support to African countries in the 21st Century.

In addition, the number of enterprises capable of offering work-place training opportunities is limited, while many training institutions have poor delivery capacity and commonly lack funding. In turn, training programmes do not produce skilled graduates because training is of poor quality and the equipment obsolete. Many youths cannot access formal TVET, and few countries have training policies which emphasise skills development in the informal sector. Other obstacles include the low prestige of formal TVET in the eyes of the general public and parents who consider it to be an option suitable only for pupils who perform poorly in general education.

A special edition of the African Economic Outlook provides a snapshot of technical and vocational skills development in 34 African countries, exploring challenges and bottlenecks, highlighting good practices, and identifying priorities for further research. This review also explores specific socio-economic issues, such as increasing youth unemployment, devising appropriate TVSD strategies in fragile states, and managing the effects of migration on a country’s stock of skilled workers.

For more information, visit: www.africaneconomicoutlook.org

Article sourced from: www.africaneconomicoutlook.org

socio-economic issues

What Notre Dame Tells Us About Global Wealth

The rationale for technical and vocational skills development