By Glenn Ashton · 29 May 2012
Unemployment and poverty are certainly South Africa’s terrible twins. The social risks of a restive, unemployed workforce are legion. That the majority of school leavers cannot secure employment emphasises our dilemma.
The government has two primary interventions to address this problem. First, it has implemented one of the world’s most extensive social grant systems to directly support the neediest. Secondly, it is well down the road in rolling out a massive job creation programme known as the Expanded Public Works Programme (EPWP), which aims to halve unemployment by 2014.
The biggest problem with the EPWP is that only a small fraction of the money going into the programme reaches the intended beneficiaries. In some cases less than 10% of programme costs reach the workers as wages. Some are paid less than R50 per day. This is exploitation on a grand scale, where well-connected movers and shakers take the cream, leaving the crumbs for the purported beneficiaries.
Liberals and free marketeers all strenuously insist that it is not the job of the state to create or provide employment. Rather, they claim that the state should create conditions conducive to job creation. In liberal and neo-liberal code this means all financial controls must be removed so commerce can operate without let or hindrance. The resulting wealth, they claim, will trickle down to where it is needed.
Of course this has repeatedly been shown up as a fairy tale, the great lie of our era. The repercussions of the 2008 financial meltdown remain palpable and real. The middle class, workers and poor bailed out the one-percenters and now bear the real consequences. The EPWP will do little to change this broken model. Nor is it meant to.
The first iteration of the EPWP was initiated during Thabo Mbeki’s term. The neo-liberal perspectives of Trevor Manuel, Alex Irwin, Tito Mboweni and the various other spectres who rapidly accustomed themselves to haunting the hallowed halls of the World Economic Forum in Davos – and even brought its doppelganger to Cape Town – initiated the programme. While it was largely based upon the successful “Working for Water” model of poverty alleviation, the far grander scale EPWP was, from its outset, poorly conceived and executed.
The real aim and challenge of any state-run job creation programme is to direct money to where it is most needed and ensure it reaches its destination. Yet from the start the EPWP had unacceptably high operating costs and inexplicably opaque overheads. Some employment was created but the primary beneficiaries were, and remain the well connected, not the poor.
Analysis shows that on average less than one rand in every five in the EPWP budget has been paid to the workers. In financial terms that means that the target beneficiaries of the EPWP will be lucky to get R15 billion of this year’s R77.5 billion EPWP budget. The rest will evaporate into obscure administration and overhead costs.
This constantly increasing expenditure is projected to provide 1.5 million “work opportunities” and around 650 000 “full time job equivalents” by 2014. The stated aim of the Zuma administration to use the EPWP as a vehicle to halve unemployment appears to be a bridge too far to realistically achieve. For a start, employment numbers are fudged.
Just exactly what are “work opportunities” and “full time job equivalents?” Besides being predictably vague in order that government can assuage public concerns that it is addressing poverty and unemployment, there are some broad brushstroke definitions.
A “work opportunity” is defined as employment for a person for a time; a week, month or year. The optimum length of a work opportunity is considered to be 100 workdays. The initial phases of the EPWP provided an average work time of 66 days. If a worker leaves, for whatever reason, then returns, two work opportunities have been magically created. Work opportunities are a kind of parallel universe, a distinctly political definition.
The more accurate and broadly accepted measure is the “full time job equivalent,” which equates to 230 days of employment in a year. This equates to a year of normal work, with some significant differences. Most EPWP work is labour intensive – shorthand for damn hard work. This can be at, or even below the minimum stipulated wage, with no health, leave, unemployment or other benefits; no work, no pay. Some work is reportedly fairly well paid, up to R200 per day, but this is exceptional. Beneficiaries may not work on EPWP programmes for more than two years in every five.
The EPWP is also meant to train workers. Initially it aimed to provide skills improvement at the rate of 2 days training for every 20 worked. The standard and type of training remains vague and needs to be properly defined and quantified so that long-term benefits can manifest. Most training appears to be centred on manual labour and administration.
Reviews and practical experience of the EPWP have clearly demonstrated serious shortcomings. For instance the work intensity, against the capital invested, is abysmal. Similar projects in Kenya have seen over half of project spending paid to beneficiaries and some major infrastructure programmes were completed. The EPWP pays beneficiaries at a fifth of that level with poorly measured outcomes.
While some excellent records have been kept which illustrate these sorts of inefficiencies, a central problem is a failure to specify outcomes or products. Huge amounts of data have been generated but very poor narrative reports exist on, for instance, what has been produced or improved. These shortcomings must be addressed.
In the infrastructure component, the largest component of the EPWP, wages to beneficiaries fell from just over 27% to less than 10% over five years. The analyses of these figures give no reason for this fall. Clearly, money was not going where it was meant. Major questions need to be asked.
It is clearly unacceptable that up to 90% of the value of the programme was absorbed by contractors, administration and other unspecified costs. Worse yet, efficiency and payment levels have plummeted as the project progressed. Instead of creating a watertight system and improving it as it grew, a weak, poorly managed system has been allowed to have been perpetuated.
For instance on the West Coast, projects have shown consistent under-delivery on programme goals, poor payment records, failure to provide adequate transport for programme workers in far flung locations and extremely poor payment of workers. Alien plants have not been cleared where they were claimed to have been, and if cleared, not properly followed up. Clearing was done by untrained contractors. Beach furniture was absent where it had been invoiced for.
Workers have sometimes waited months for payment. When it is made, amounts are disputed. Because no dispute resolution mechanisms exist, due to lack of unionisation, collective bargaining or other workers rights, this exploitation continues. This amounts to nothing more than taking advantage of people desperate for work to put food on the table.
This is not to say that all EPWP programmes have failed. Some have produced excellent results – the Working on Water Programme, on which much of the EPWP has been modelled is mostly well managed and monitored. Records exist of achievements and of follow-up programmes.
Given the huge threat of alien invasive plants to our extremely limited water supply this and related programmes like Working for Wetlands and Working for Fire provide excellent models. Most importantly these programmes have proven that they can provide quantifiable benefits, to water security, biodiversity preservation, sustainable energy provision, and most importantly to the intended beneficiaries.
The real tragedy of the EPWP is that it can, and should, make huge differences where they are most needed. Yet poor control, reporting and oversight mechanisms have blighted major aspects of the programme, from inception. Cronyism and tenderpreneurs have skimmed more than the cream in many cases, usually with no repercussions. Because there is a de facto suspension of labour rights, the most vulnerable participants in the programme are figuratively and literally left to bear the heaviest burden.
All of these problems can be managed and overcome. While guidelines have been significantly strengthened, stringent oversight and reporting mechanisms are not yet in place. There is an urgent requirement for a specialised flying inspectorate to be put in place, so that allegations of labour and financial abuse can be inspected and acted upon at short notice. This is a vast programme with thousands of teams around the country.
Everyone working within the EPWP must have access to such an inspectorate in order that management, all levels, can be kept honest, open and aboveboard. The inspectorate should operate independently of the EPWP unit and the Department of Public works, possibly in consultation with the Hawks.
Finally, the Department of Public Works, a profoundly dysfunctional department, must be held to account. Good work has been done by the relevant Parliamentary Portfolio Committee but this requires robust follow-up. An independent internal review panel reporting to the minister would be a sensible start.
The principles underlying the EPWP programme are sound. It is inexcusable to compromise such a noble project by allowing it to degenerate into a cesspit of crony capitalism. If the present situation is allowed to continue the monster of unemployment and poverty will engulf us all. More is the tragedy.
This piece makes some very serious criticisms of the EPWP, particularly the small share of the funding that reaches the intended beneficiaries. But there is no mention of its sources of information, so readers cannot judge how reliable its criticisms are. It seems irresponsible to launch such a damming critique without explaining where the evidence comes from. Also no recognition is given of the need for projects to be organised, and for there to be materials and equipment for participants to work with. It is likely that the better quality the project, and the better the experience for participants. Clearly there must be a limit to this, but it should not be dismissed out of hand. Finally, no explnation is given for what EPWP is so much worse than Working for Water etc.
Thanks for your comments Ivan. As far as sources, references go, I have tried providing hyperlinks previously but it is difficult to integrate direct from original text onto this site. Also this writing is not intended as an academic reference site, hence does not carry full references. Most of my raw data was from the EPWP statistics - for instance on the PDF on this page http://www.epwp.gov.za/ and elsewhere on the DPW website. Other critique also exposes this such as this - www.robert-mccutcheon.com/resources/McC%20FTP%20DPRU%208Oct10pm%20copy.docx As far as the success of early EPWP programmes such as WFW go, these were scaled up gradually and nurtured more carefully. The results show. Compared to other PW programmes elsewhere we certainly have a long way to go to ensure proper measurement of outcomes and results, as well as true cost benefit analyses. Even a cursory analysis of the programme makes this clear. The deeper one goes, the worse it looks. Interviews with workers has also raised serious shortcomings in training, payment, etc. Work is certainly needed on this programme - this is why I tried to make concrete suggestions to address some shortcomings. Its no good criticising if one cannot at least suggest solutions - that is my credo.
I can only speak from my own experience with people known to me who are on EPWP programmes in central Joburg, where many promises are made, desperate people become excited at the prospect of some work, walk to work in all weather to save money from the very small amounts they earn, get no training (other than some beadmaking for a male CWP person - how relevant is that??) so I must concur with the writer, that the intentions are good but the implementation has been highly problematic over some time. Properly referenced academic articles are all very well, but maybe we should all just speak to the people in those situations (easy enough to spot by their uniforms) and see how they feel about it all??? My expectation is that they are not going to be hugely positive about it all. Of course its not the State's responsibility to be the sole jobs provider, but I do question the extent to which they are fully committed to an enabling environment for business to flourish. And the R50 a day (after walking there) is correct - thats what CWPs working in Yeoville are getting on certain of the projects.
EPWP - who are the real beneficiaries
I see this piece was done in May 2012 and unfortunately so many years later it appears very little if anything has changed. I have just been paying attention to one EPWP project which is now nearing its conclusion on the 19th December though the handover has been done. Very little has been achieved materially and the labour issues are as you put it, but obviously that contractor managed to get more out of this project due to poor oversight and monitoring on the site of the responsible Department. Though its not public works this time around - working on a paper that will reflect on some observations and lessons learnt in details and just maybe some one will pay attention and the situation is changed for better...