Coronavirus was just a blip on the horizon, confined to Wuhan in China, when Michael Bagraim, the shadow minister of employment and labour began checking if we could sustain a lockdown. He asked Labour Minister Thulas Nxesi and Unemployment Insurance Fund (UIF) commissioner Teboho Maruping if there was enough money for a million UIF claims if the virus hit South Africa and led to a lockdown. Bagraim, also the labour spokesperson for the Democratic Alliance, was assured that the R140 billion in UIF reserves would be more than adequate.
He now realises he was asking the wrong question. “What I should have asked is if the system had the wherewithal and know-how to distribute it,” he said in a webinar hosted by the Gilah branch of WIZO (the Women’s International Zionist Organisation) on 30 July.
He has since seen the tragic ramifications of a UIF system that simply can’t handle the influx of claims under lockdown.
Bagraim described how his calls for clarity and attempts to assist hundreds of desperate South Africans in rightfully claiming UIF and Temporary Employee/Employer Relief Scheme assistance had destroyed his relationship with most people in the department.
However, he assured that he won’t back down as he watches the haemorrhaging of jobs and the desperation of business owners and their employees under lockdown. “I’m a world-class nag,” he proclaimed proudly, and encouraged community members not to give up in ensuring that they and their staff are rightfully paid the money that they have contributed to UIF.
“I hear horror stories every day. There are people who still haven’t been paid for April. At one point, it was suggested that the administration of UIF be handed to the South African Revenue Services (SARS) as it already had the system to do so.” Bagraim said some functions were handed over to SARS, but not the payout function.
A second dimension of the problem is that people who were receiving UIF payments before lockdown suddenly stopped receiving them. Back in April, Bagraim wrote to Business Day, “For the past two weeks, I have received hundreds of emails, WhatsApp messages, and phone calls from people who are desperate, and many are on the verge of starving. These are people who have relied on the UIF in the past, and need their future payouts. Many are in the system for pensions, dismissal, maternity leave, and other claims.
“For some inexplicable reason, their payments, which were active before the lockdown, have been stopped. In addition, hundreds of people have contacted me to say that they can’t access the system either telephonically or electronically. This system has failed South Africa. Our government has failed the most vulnerable of our workforce.”
As small-business owners fear for their workers, Bagraim has witnessed some paying salaries out of their own savings. One man even sold his second car to do so. “Our community has been exemplary,” he said.
Bagraim said that even before the virus arrived in South Africa, we already had “the perfect storm” in terms of job losses and unemployment reaching an all-time high. This has been put on fast-forward by the lockdown, with three million jobs lost by the end of April.
“Our treasury, which is usually very conservative, has now predicted that a further three million to seven million people will lose their jobs by the end of August,” he said. While he knows the virus is damaging and deadly, he believes the current economic circumstances are much more destructive, especially in the long term.
“The nightmare continues, and the frustration is enormous. We see shops being looted, and people taking over land because they are desperate. It feels like that story of a frog in a pot of water that is slowly boiling, and it doesn’t notice.”
However, he said there were still “green shoots of hope” on the horizon. The first is in the figure of Finance Minister Tito Mboweni, who is looking into decoupling small business from bargaining councils. “This means that big business can’t determine the terms and conditions of employment for small business, whereas according to the present system, they can agree with the trade unions how much the minimum wage will be, that’s sent to the minister, who extends the agreement to all businesses in that industry,” he said.
This change could create 2.5 million jobs. “If small businesses are deregulated, they can start expanding again,” Bagraim added.
Another positive in his eyes is the weakening of the Congress of South African Trade Unions (COSATU), “because the workforce is being decimated, and many workers are moving their allegiance to other trade union umbrella bodies”.
Then, there is the strengthening of NEDLAC (the National Economic Development and Labour Council). Although it has been dysfunctional for many years, Bagraim said its new executive director, Lisa Seftel, is looking at how to get people back to work and get the economy going. He sees this kind of organisation as leading the way forward, along with a strong reliance on business to adapt and be creative in creating jobs.
Bagraim also believes that government is starting to recognise different parts of the economy and “atypical employment” – the “side hustles” or working three jobs that are so common in places like New York. “At last, it’s saying we need more entrepreneurs, which will take us into the fourth industrial resolution.”
Finally, he believes that the International Monetary Fund loan is extremely hopeful. “Yes, people say it will be stolen or squandered, but not so fast. It comes with conditions, outside control, and guidelines on how it can be used. It’s a small loan in the scheme of things, but there may be more, and we should celebrate it.”
