A basic income in South Africa

From Resolve Global Health

The streets and even the highways are empty, except for the police and military patrols. An eerie stillness has engulfed South Africa’s economic heart, Johannesburg.

It is March 27, 2020, and the country has embarked on one of the world’s strictest covid-19 lockdowns, confining most people to their homes, initially for three weeks. The country, already under a national state of disaster because of the virus, deploys the army in residential areas to enforce the shelter-in-place order.

Under the country’s apartheid government, South Africans of colour were forcibly relocated to segregated and underdeveloped areas called townships. In Johannesburg’s largest Black township, Soweto, self-trained photographer Thando Makhubu had been running a small business. “All our money was from event photography, but then lockdown came, and there was no work,” he says.

Still, Makhubu believed then that covid-19 would pass. “I wasn’t really worried,” he remembers. “We were just watching the news and trying to understand what’s going on.”

Soon, the three weeks of lockdown turned into five. By May 2020, Makhubu had joined the ranks of the roughly three million South Africans who became unemployed within the first three months of the covid-19 epidemic, according to a national survey by local universities. The research found an almost 20% decrease in jobs during the first three months of the outbreak and nearly half of the respondents reported running out of food during the lockdown.

“My bank accounts were drying up,” Makhubu says. “That’s when I realised that life wasn’t the same anymore.”

Unemployment on the rise

The epidemic worsened an already fragile employment situation. South Africa’s mix of historical racial oppression and poorer-than-expected economic growth has fuelled increasing unemployment in the last three decades. In what the World Bank estimates is the most unequal country in its global poverty database, almost half of working-age South Africans are unemployed, government statistics show.

“We’re looking at [a lot of] people whose probability of getting a well-paid job is almost nothing,” explains Isobel Frye, the director of the Studies in Poverty and Inequality Institute, on a recent podcast.

The country runs an extensive social grant programme for at least 17 million children and caregivers, the elderly, veterans and the disabled. Still, without social security for the country’s 11.5 million otherwise healthy yet unemployed, these grants often subsidise entire households. Almost one third of the country experiences daily hunger.

Reviving a decades-old idea

In May 2020, South Africa’s hard lockdown eased, and the country—like more than 200 other nations—extended social security protections in response to covid-19. For the first time in South Africa’s democratic history, the unemployed became eligible for a R350 (US$24) monthly grant.

Nearly 10 million people applied for the money in the first six months. More than 90% of the recipients surveyed used the money to buy food, helping increase the number of families who could regularly afford food, according to a 2021 United Nations University working paper. It helped reduce inequality in the country.

“When they announced the grant, the government said you can apply via SMS, WhatsApp or email and said you must just apply once,” Makhubu remembers. “I applied on SMS, WhatsApp and email. I really wanted to get this money and do something with it because I wasn’t receiving anything.”

The grant, which will run until March 2023, has reignited a decades-old debate about whether South Africa can afford a permanent basic income grant. Some of the country’s best economic minds say it can, but it will almost assuredly mean raising taxes.

“We can afford it, but let’s not pretend we can afford it without making sacrifices,” says Michael Sachs, an economist and adjunct professor at the University of Witwatersrand.

At the very least, a monthly basic income grant of R595 ($US41) could halve the number of hungry people, Sachs and others argue in a recent analysis. At most, a cash transfer of R1,300 ($US88) could almost eliminate some forms of poverty while making modest reductions in inequality.

But could it also buy South Africa gains in reducing deadly epidemics of non-communicable diseases (NCDs) like diabetes and depression? The answer lies buried in the many complicated and hidden ways poverty shapes our health and perhaps even our genes.

Hunger and an unfortunate inheritance

NCDs like type 2 diabetes and hypertension are often associated with lifestyle factors and overconsumption, but too few nutrients early on in life can also play a role.

The number of babies that die before their first birthday in South Africa is nearly five times that in the United States, 2019 World Health Organization (WHO) data shows. Dietitian and University of the Free State lecturer Chantell Witten has studied an important factor behind these deaths: the country’s abysmal rate for exclusive breastfeeding, which makes babies more vulnerable to die from conditions like diarrhoeal disease.

Babies who are not breastfed also have a higher risk of developing type 1 diabetes, high blood pressure and obesity, which is a risk factor for type 2 diabetes, the American Diabetes Association warns. For the mother, breastfeeding has been shown to lower the risk of type 2 diabetes, high blood pressure and breast or ovarian cancer.

Although it’s unclear how breast milk protects against NCDs, a 2014 research review posited that it could be epigenetic—meaning nutrition could influence how some genes behave and vice versa, leading to changes that could potentially be passed down through generations . In South Africa, this plays out in a broad context of increasing obesity driven partly by the rise of cheap, high-calorie and high-fat ultra-processed food.

Crucially, hunger may determine whether mothers feel able to breastfeed. As part of a 2020 study published in the International Breastfeeding Journal, Witten interviewed nearly 200 new mothers in poor townships. About 40% lived in households earning less than R2,900 (US$200) a month, and a similar proportion experienced signs of depression.

Witten found that hunger was physically and emotionally painful for these women—something they feared they could transmit to their children through their breast milk. “The minute the mother is aggravated, a baby can feel that—the mums in my study completely internalised this,” she says, describing what women in the study perceived as challenges to breastfeeding babies. “When they were breastfeeding, women would say, ‘I feel hungry. So I'm literally feeding my child my hunger’.”

In some ways, Witten says, the women are right. “Hunger is actually a trauma to the body—it elevates your cortisol, which is the stress hormone,” she explains. “Those stress hormones have been found in breastmilk.” But although cortisol levels in breastmilk can fluctuate depending on the mother’s stress, it is not known what, if any, impact this has on babies.

Still, for many women in Witten’s study, hunger—and their beliefs around it—played a role in their inability to exclusively breastfeed infants. Fewer than one in five women in her research exclusively breastfed their babies for the WHO-recommended six months.

"We live in a country where 95% of households access food through the formal, retail system," she says. "If they don't have money to buy food, we can't expect them to have good nutrition."

The poverty-depression link

By August 2020, Thando Makhubu had received three tranches of the covid-19 grant. The first bought family groceries, but the rest he used to open an ice cream shop out of the family home. The Soweto Creamery now employs five people, and its success garnered Makhubu a mention by name in the President’s February 2022 State of the Nation address.

In the public’s eye, Makhubu has come to represent what might be possible with a small amount of state-provided money in a country with widespread unemployment. “Unemployment isn’t really something I think about—it’s something I see,” he says, sitting at one of the many picnic tables for customers that now dot the family yard.

“Here in the ’hood, we're living in small spaces, we're malnourished, we don't have cars—it's depressing,” he explains. “Some people have lost hope.”

Living in poverty has been strongly linked to an increased risk of depression, says Crick Lund, a professor of global mental health and development at King’s College London. The link, he warns, is more complicated than it seems. The stress of poverty’s harsh realities—hunger, overcrowding, living in more dangerous communities—increases the risk of depression.

But the relationship also runs in the other direction. “If you’re living with depression, you’re more likely to drift into poverty,” Lund says. “You spend more on healthcare, and the disability associated with being depressed means it’s more difficult for you to generate income or maintain an occupation.”

He adds that people who are depressed are also more likely to have other conditions. People living with NCDs are also at an increased risk of depression, according to a 2007 research review in The Lancet.

Pairing cash with care

In South Africa, high unemployment triggers an ​​insidious chain reaction where poverty and hunger drive increased rates of NCDs like diabetes and hypertension. These conditions raise the risk of depression, which means people can struggle to earn an income and are therefore more likely to be depressed.

Still, as a recent review in Nature Human Behavior found, cash transfers like basic income grants improve mental health and wellbeing. Emerging research also suggests that pairing cash with a health intervention, like classes on coping skills, might make for an even more powerful tool for mental health, Lund says.

If this happened alongside a basic income grant in South Africa, it would allow health workers to finally reach a large population of men who might otherwise never set foot in a clinic, unlike women and children, who seek healthcare more frequently.

“There is emerging evidence to support pairing a mental health intervention with a cash transfer to yield interacting economic and mental health benefits, particularly for vulnerable populations like unemployed youth,” Lund says.

Economist Iraj Abedian is a former University of Cape Town professor and founder of Pan-African Investment and Research Services Group. He says the question is no longer if South Africa can afford a basic income grant.

"Often, I hear from different quarters: can South Africa afford this?” he says. “I'll flip it and ask: can we afford not to?”

 Even a very small basic income ($40/month) makes a difference.  Too often, basic income advocates ask for large basic incomes to be paid.  Of course, that would be the ideal.  But it makes paying basic incomes much more costly to the exchequer, which in turn means it isn't introduced.  

I've worked with poor people (I volunteer at an op shop (thrift store)) and I promise you that in Australia, even a few hundred dollars a month would make a significant difference to the real poverty I see every day.  It's time for a UBI, here in Australia and everywhere.  If South Africa can introduce a UBI, then very wealthy nations should be shamed into doing the same.