Mike Schussler says ‘It’s lives vs lives’ – IRR
21 April 2020
It’s not a question of the economy against people’s lives, but lives versus lives. So said renowned economist Mike Schussler in a virtual briefing hosted by the Institute of Race Relations (IRR) this morning.
Schussler said South Africa had to find a way to exit a hard lockdown as a matter of urgency, as a continuation would be ‘unsustainable madness’. He said the lockdown had starkly illustrated the ‘digital divide’ in South Africa between white-collar workers who could generally carry on with their activities, working from home, and blue-collar workers, ranging from cashiers and waiters to factory workers, hotel staff and hairdressers, who had no way of earning a living during the lockdown. Schussler estimated that for every white-collar job lost to the lockdown, up to ten blue-collar jobs could be lost. The expanded unemployment rate could leap from its current level of just below 40% to closer to 50%.
He noted that the economic decline due to lockdown was exacerbated by a number of factors, including high-interest rates, high levels of unemployment, and policy uncertainty, especially on such issues as the expropriation of property without compensation.
Analysing activity such as card payments showed that, in March, economic activity was about 55% of normal levels, while electricity consumption matched levels last seen over a decade ago. The service industry would be particularly hard hit by this decline in economic activity, Schussler said.