NOMPU SIZIBA: The first wave of the National Income Dynamics Study for 2020 has been released. It’s the work of some 30 social scientists – researchers who hail from five different South African universities. They conducted the study with the blessing of the presidency. Their focus has been on the extent to which the national lockdown has impacted jobs and incomes, and the socioeconomic impacts that have arisen as a result. Sadly, they’ve found that some three million people lost their jobs from the time of the lockdown. The hope is that this body of work will aid policy makers in dealing with the impacts of Covid-19, which are expected to be long-lasting in nature.
Well, to give us more detail, I’m joined on the line by Nic Spall, a senior researcher in the economics department of the University of Stellenbosch. Thank you so much, Nic, for joining us. Now, the number of social scientists involved in your study is quite telling in terms of the amount of work that will have needed to be done to get out the data that you’ve produced. Before we get into those details, just take us through the number of people you spoke to, how you conducted your research in these times of Covid-19, and your basic methodology.
NIC SPAULL: Sure. Thanks for having me. The reason why we conducted the survey was to find out crucial information on how South African families were being affected by, particularly, the lockdown, but also just the turbulent time that we entering. We couldn’t collect data in the same way that we normally do, which is visiting households to conduct a survey, so we had to use a telephonic survey. We used an existing survey, the National Income Dynamics Study, but just utilising the telephone numbers from that sample and phoned 7 000 respondents, asking them about their employment and welfare. The questionnaire took about 20 minutes, and people were given R20 in airtime to say thank you for participating. And we’re going to follow those same people five more times during the course of this year.
NOMPU SIZIBA: Excellent. Of course, the data are devastating. You indicate that some 3 million South Africans lost their jobs, and 4.5 million people lost their income. Take us through that.
NIC SPAULL: Sure. We asked retrospective questions about people’s employment in February and in April, because we did the survey in the months of May and June. We had 50 call-centre agents who were phoning people all the time in 10 languages to get their responses. The figure of 3 million job losses comes from comparing employment in February and employment in April.
But we also had to ask not just about employment. These are quite strange times, as far as the labour market’s concerned, because a lot of people report that they had a job to return to, but they also reported zero income. So those are the additional 1.5 million people that take you to that 4.5 million number.
Now, this loss of income, either from a job loss or income loss, has serious ramifications for things like household hunger and child hunger, which is also something that we looked into, and it really is quite devastating.
NOMPU SIZIBA: And one of your observations is that, when there’s an economic disaster, those who have tend to be more resilient, and those who have very little get impacted the worst.
NIC SPAULL: Definitely. So I would say that there are two really high-level findings. One is that the people who were already disadvantaged in the labour market were much more severely affected by job loss than those who were well off. For example, the poor were eight times more likely to lose their jobs than the rich. That’s defining the poor as those who earn less than R3 000 a month, and the rich as those who earn more than R24 000 a month.
But the second big finding is that women account for 2 million of those 3 million job losses. So women have experienced the greatest job losses since the pandemic started
NOMPU SIZIBA: Very bad, indeed. And of course this all translates into what people are able to do for themselves – feed their families, and so forth. No doubt this has resulted in people experiencing more hunger.
NIC SPAULL: Yes. One of the questions that we asked was whether or not households or the respondents said that their households ran out of money to buy food in the month of April, and one in two respondents, 47%, reported that they did run out of money to buy food in the month of April. One in five respondents reported that someone went hungry in the last seven days, and one in seven respondents reported that a child went hungry in the last seven days. Now, these are more than double the numbers that we would see in any other household survey that looks at hunger, and this is really quite concerning.
NOMPU SIZIBA: Of course, it’s very early days for you to be making massive deductions because, like you say, you’re going to be continuing with research on these very same people for the rest of the year. But, from the little that you know now, how bad is the situation in terms of the socioeconomic impacts? To what extent are you in favour of us going for the basic income grant that has been discussed or raised by the social development minister? And, of course, that’s against the backdrop of a very difficult fiscal situation that we’re currently in, in South Africa. And, in the interim, what other solutions do you think that we need to bring out of the box in order to deal with the current situation?
NIC SPAULL: Firstly, to give you a sense of how bad things are, 3 million job losses – you can compare that to the 800 000 job losses as a result of the financial crisis. This is three times worse than the job losses that we experienced between December 20, 2008 and December 2009 as a result of the financial crisis. So it is really, really bad.
In terms of the support for the basic income grant, I am in support of those sorts of social protection mechanisms, because it’s very clear that our existing system is letting a lot of people fall through the cracks in really important ways. But, as you say, we need to find ways of funding it. And I think we need to be creative about thinking of new ways of getting revenue through different forms of taxation or wealth redistribution. I made this argument in the Financial Mail this week – that we can’t rely on old mechanisms to try and resolve this new problem.
Now, your last question – about other things that we can do – one is to fix the systems that we have. So, you know that with this new Covid-19 grant, the R350 a month one, two-thirds of recipients of that grant are men, despite the fact that two-thirds of job losers are women. How is that happening? The systems that we have are not targeting the people that we need to reach, and I think that’s a really easy one to reform.
Sassa needs to look at how it is that it’s excluding people and figure out why these grants are all going to men, when two-thirds of the job losses are actually experienced by women.
NOMPU SIZIBA: Very difficult, indeed. And then, just in terms of the future research that you’re going to be doing, how many more times are you going to be interviewing these people? And how often can we expect reports from you?
NIC SPAULL: We’ll interview them between every one and two months between now and December. We’ve already started with Wave 2. And, with each wave, although it has many of the same questions so that we can compare the exact same questions over time, we also change some of the questions that we ask. So, in Wave 2 we focus more on education and childcare, given the fact that children are now going back to school, or so we hoped; if things don’t change and schools get closed now, that would be a real disaster. But the results should be out in the middle of August, towards the end of August, and then every six weeks.
So basically a month to six weeks from now we should have the results of Wave 2, which will also be really good as we’ll be able to see the impact of these Covid-19 grants that are being progressively rolled out, because, when we were in field phoning people, they hadn’t fully been rolled out.
NOMPU SIZIBA: Nick, you touched on the schools – that will be a topic for another day. But thank you so much for giving us your insights there.