Conference Agenda

South Africa is the most unequal country in the world. The global polycrisis since 2020 has had devastating impacts on the population, worsening the extremely high levels of poverty and unemployment. This has placed the question of basic income high on the national agenda. South Africa has now introduced a de facto system of basic income (at an extremely low level) which has the potential to be transformed into a Universal Basic Income Guarantee (UBIG). This is the subject of considerable policy debate and research, in which the authors have substantively participated*. We draw on this experience, alongside our review of experiences in other LMICs*, to probe the potential impacts and challenges of a UBI as a pillar of development policy in the Global South.

*The IEJ research referred to here is available at https://www.iej.org.za/projects/universal-basic-income-guarantee/

While the demand for a UBIG (or UBI) is extremely popular in South Africa there is skepticism in some international quarters about the feasibility and implications of a UBI. Isabel Ortiz et al (ILO 2018) raises critical questions on potential negatives a UBI would need to avoid, including being exclusionary, having a negative impact on public services, regressive financing, inadequate benefits, and a net welfare loss. They conclude that “some models of UBI can be in accordance with ILO standards, while others are not”.

These concerns raised by Ortiz should be seriously addressed. This paper assesses the extent to which UBIG proposals made by government and civil society actors in South Africa meet these concerns. Specifically it will consider proposals in relation to the following criteria: financing, progressive or regressive; design (universality vs targeting); its relationship to other elements of social protection, in particular public services, and the social security system- and their likely impact on poverty, inequality, and social solidarity. It will also consider impacts of various design modalities on gender empowerment, worker rights, and just transition issues.

The paper follows the approach of Ortiz et al in arguing that the UBI/G model South Africa adopts will determine whether it meets the criteria set out in the paper, and elaborates on the elements that need to be addressed to ensure it constitutes a progressive advance. It further argues that an adequate UBIG model is not compatible with macroeconomic austerity.

The Covid-19 pandemic affected economies and labour markets all over the world. Due to containment measures economic activities were strongly reduced, unemployment went up and employment was seriously harmed. In a period of recession, a temporarily shortening of hours is one option to dampen its negative impacts. For employers short hours are an opportunity to maintain permanent employment. Workers would then also benefit from job retention. However, working time reductions generally result in income losses. Against this background, government schemes are aiming at temporarily compensating workers for the loss of income. Such arrangements make it easier for all parties to keep their relationships.

Short-time work compensation schemes were and are heavily used in many countries to combat the Corona crisis. Some countries even implemented the scheme for the first time, whereas others utilised this government programme since decades. One of the latter cases is Germany. The country has a long tradition in this respect. Short-time work compensations were, e.g., used in the aftermath of the reunification as well as during the Great Recession. At the beginning of the present crisis, Germany reached a new record level concerning short-time work. In spring 2020, almost six million short-time workers were registered. This corresponds to about 15 per cent of all dependent employed.

The question, however, how the effectiveness of short-time work compensation schemes can be assessed. Are they sufficient to safe jobs? What are potential side effects? Which factors may influence positive or negative effects?

The contribution is based on analyses on macro indicators as well as on international comparisons. All in all, they indicate that short-term work compensation schemes has helped to maintain employment levels during recessions. However, they can create inefficiency in the labour market, e.g. due to deadweight losses or because of limiting labour market access for less competitive workers. Important issues regarding the employment impacts of short-term work compensation schemes are the generosity of the regulations, the coverage of workers as well as the timing of legal changes. In addition, side effects are of interest such as distributional impacts as well as incentives to combine short-time work and training in a proper way.

During the several lock-down phases in Bangladesh amidst the COVID-19 pandemic, most economic activities were shut down. In a country where the informal economy is dominating the labour force (comprising 86.2% of total employment), these shutdowns have caused taunting impediments to the recovery of small businesses during post-COVID-19. Several studies highlighted the recovery of these small businesses, but the rate of recovery is found to be slow, and the magnitude of the recovery varied among different sectors. Besides, the current global economic turmoil and price hike of essential commodities have added another level of challenge that could hamper the usual growth of informal activities. Under such circumstances, this study using mixed method approaches (with a sample of 1200 informal sector owners) is attempting to understand the recovery statuses of the informal economies while considering the current economic vulnerabilities. This is an urban-centric study, encompassing the capital, Dhaka since most informal economic activities are concentrated in this city. This study explores the coping strategy and changes in their lives because of twin shocks; COVID-19 and the price hike of essential commodities. This study focuses on selected manufacturing and service sectors in the informal economy which is important to achieving poverty reduction by employment generation. The specific objective of this paper is to understand the coping mechanisms used by small business owners during the twin shocks, to explore the well-being of informal sector’s workers/owners affected by these shocks, and to identify how they absorbed or still absorb the shock and the possible policy adaptation to better tackle such economic shocks in the future. It is envisaged that due to COVID-19, informal sectors’ owners’/employees’ coping behavior has been shaped by both external and internal resources. Besides, their behaviour and practices are also shaped by three consequences; physiological, social, and physical. Though a simplified coping strategy model is presented to assess the sample, the study has theoretically taken a leaf out of Sen’s capability approach (1999) and World Bank’s ‘Voices of the poor’ (2000) reports for a comprehensive understanding and evaluation of the sample’s response.