You can tell right from the headline on this Bloomberg News story that the piece is going to be seriously problematic:
Lamb for 12 on $400 Monthly Shows South Africa Welfare Addiction
Is this news story really going to suggest that a family of 12 is living high on the hog off what comes to $1.14 a
month day per person? Yes, it is. Those good-for-nothing poor people and their lamb and macaroni. Let them eat veal!
Let’s pick it up from the second paragraph:
Side dishes: macaroni and bolognese sauce. What pays for the meal: South Africa’s taxpayers, via 4,540 rand ($418) in monthly government benefits. Nine of the residents in the house, from Matthys’s baby great-granddaughter to Hendrik, her husband, receive one kind of aid or another. Only one of the 12 works.
Welfare dependency, a problem across the developed world, has reached a danger level in South Africa. More people receive aid than have jobs, and the ratio has been worsening for five years. While the handouts have helped address abject poverty since the end of the apartheid regime, they haven’t helped recipients get skills needed for jobs in a country with 24 percent unemployment.
Did the ghosts of Lee Atwater and Ronald Reagan write this thing? It has everything but the Cadillac and the “strapping young buck.” Perhaps lamb is Afrikaans for “T-bone.”
Bloomberg writes that “only one of the 12 works.” But it never gets around to telling us that nine of the 12 aren’t of working age. We have to back into that ourselves. The heads of the household are in their 70s. There are seven kids. Bloomberg makes hay out of the fact that one, Christoline, says she’d have to move to Cape Town, 540 kilometers away, to look for a job if she didn’t get welfare for her baby. Christoline is 16, by the way.
That leaves two layabouts living on “handouts.” Is that because they’re lazy or because the unemployment rate in their city is some 90 percent?
That’s the first of a number of chicken-and-egg problems with Bloomberg’s piece. Here’s another:
In towns such as Brandvlei, dependence on social grants helps feed alcohol dependence, said Christolene Markus, a community-development worker at the Department of Social Services, as she stood in the door of the satellite office building. Two doors away is B&B Liquor Store, the biggest such establishment in town. People line up before 8 a.m. on Mondays. “Look outside,” she said, pointing to a group of rowdy young men stumbling along the street running toward the store. “This is what it looks like when they get paid. And then later they come and beg at our office again.”
It blames welfare payments for fueling alcoholism, but doesn’t acknowledge that no-hope joblessness is surely a much bigger factor. It also implies that welfare payments for incentivizing pregnancy, but doesn’t acknowledge that poverty and pregnancy go hand in hand.
This isn’t to say welfare doesn’t provide negative incentives in some cases. It can and does, and there are legitimate reasons to restructure programs to less those effects. But at a minimum, it is highly questionable that welfare itself is a bigger factor in self-defeating behavior than the underlying poverty and joblessness it is meant to ameliorate. And a look at the data seriously undermines Bloomberg’s unsupported inferences.
If welfare were really causing indolence in South Africa, you’d expect to see people dropping out of the labor force. But the OECD reports that labor participation has risen significantly over the last two decades, particularly among women, who are more likely to be welfare recipients (though it’s fallen sharply since the crisis, as it has just about everywhere):
What about welfare-fueled pregnancies? Bloomberg, of all places, should know better than to rely on anecdotal data. With the explosion in welfare recipients in South Africa, you’d expect to see a booming birth rate, according to the wire’s logic. Instead, it has collapsed:
Does receiving welfare payments cause South Africans to work less? There’s data that actually contradict that via Katherine Eyal and Ingrid Woolard in Oxford’s Journal of African Economies:
We find that grant receipt is associated with a higher probability of being (in) the labour force, lower unemployment probability for those who do participate, and a higher probability of being employed. These effects are not small, ranging as high as 15% for some groups.
How’s the South African economy doing? Pretty good, all things considered. And by all things, I’m mainly talking about an HIV crisis that still plagues it, the lingering effects of the global financial crisis as well as the economic transformation that has accompanied the end of institutionalized segregation and political oppression not so long ago.