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BL Premium reports that a new academic paper published by the Covid-19 economists group warns that there is a danger that employment losses due to the epidemic will become permanent, causing the rate of unemployment to be significantly raised for years to come.
SA has among the highest rates of unemployment in the world at 29% (narrow definition) and is also one of the most unequal societies. Economist Miriam Altman writes that various scenarios, based on the combination of strategies used to fight the epidemic, could see the rate of unemployment rise to between 30% and 37%. She points out that it is imperative that policymakers are alive to these dangers and make appropriate choices to limit long-term permanent output and employment losses. Altman argues that a shift from "a centrally regulated approach that controls activity" to one that "enables communities and businesses to adhere to the protocols required to contain the virus", is an essential first step. Such an approach is consistent with the approach the government has now taken, where a limited range of economic activities are prohibited, with the rest allowed, dependent on risk mitigation strategies. "It is within our power to limit the damage. A balance can be found between containing the virus and other health, social and economic imperatives in a way that is mutually reinforcing," Altman maintains. Her paper models four scenarios on the extent to which the three priorities are applied, which are briefly outlined in this report.
- Read the full original of the report in the above regard by Carol Paton at BusinessLive (paywall access only)
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