AN EMPLOYMENT GUARANTEE SCHEME OR A WORKSEEKERS GRANT

The Institute for Economic Justice proposes two alternatives to address South Africa's structural unemployment crisis: an Employment Guarantee Scheme (EGS) providing 100 days of work per year, or a Workseekers Grant of R1000 per month for six months. Estimated to cost R30-36 billion annually, these schemes would be funded by a proposed R15 billion annual contribution from the Unemployment Insurance Fund (UIF) surplus and additional solidarity taxes, such as a wealth tax.

• South Africa faces a severe structural unemployment crisis where active labour market measures like retraining have limited impact. As of the first quarter of 2018, over 41% of workseekers (using the narrow definition) had been unemployed for more than three years, and approximately 4.2 million (68%) had been unemployed for more than one year. Using the expanded definition, there were around 9.6 million unemployed people in the second quarter of 2018.
• There is a critical lack of social protection for adult unemployed persons in South Africa. The Unemployment Insurance Fund (UIF) covers less than 10% of the unemployed, only those with previous contributions, and only for a maximum of one year. Specifically, there are over 6.7 million unemployed adults between the ages of 25-54 who lack coverage from social protection, training, or employment schemes.
• The document proposes two alternative social solidarity interventions to support the unemployed, with an estimated annual cost between R30-36 billion starting in 2019. The first is an Employment Guarantee Scheme (EGS) modeled after India's NREGA, which would guarantee every household 100 days of work per year at the minimum wage, or an equivalent payment if work is unavailable. The second is a Workseekers Grant, a non-conditional flat amount (proposed at R1000 per month for six months a year) for unemployed adults who do not qualify for UIF benefits.
• The Employment Guarantee Scheme (EGS) would build on existing Expanded Public Works Programme (EPWP) and Community Work Programme (CWP) frameworks. Its advantages include providing work experience and training and being accessible across all demographics and locations. However, it faces challenges regarding the need to build state capacity, higher administration costs compared to grants, and a high potential for corruption.
• The proposed Workseekers Grant is designed to be easy and inexpensive to administer using existing electronic payment mechanisms. It aims to remove financial barriers to job searching and could serve as a first step toward a universal Basic Income Grant (BIG). Its primary drawback is that it does not provide the direct work experience offered by an employment guarantee.
• Funding for these schemes is proposed through a combination of the UIF surplus and the fiscus. The UIF, which had a surplus of at least R138 billion (with 2016/17 reserves of R133.3 billion), could contribute R15 billion per year. Additional funding could be generated via 'solidarity taxes', including a wealth tax (estimated R32-130 billion), a personal income tax bracket for the super-rich (R27-47 billion), and restructuring Corporate Income Tax (R4-13 billion).

APA

Coleman, N. (2018). AN EMPLOYMENT GUARANTEE SCHEME OR A WORKSEEKERS GRANT. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2020/07/Stream-4-Policy-Brief-2-An-Employment-Guarantee-Scheme-or-a-Workseekers-Grant.pdf

Chicago

Coleman, Neil. AN EMPLOYMENT GUARANTEE SCHEME OR A WORKSEEKERS GRANT. Institute for Economic Justice, 2018. https://iej.org.za/wp-content/uploads/2020/07/Stream-4-Policy-Brief-2-An-Employment-Guarantee-Scheme-or-a-Workseekers-Grant.pdf.

Wikipedia

{{cite report |last1=Coleman |first1=Neil |title=AN EMPLOYMENT GUARANTEE SCHEME OR A WORKSEEKERS GRANT |publisher=Institute for Economic Justice |date=August 2018 |url=https://iej.org.za/wp-content/uploads/2020/07/Stream-4-Policy-Brief-2-An-Employment-Guarantee-Scheme-or-a-Workseekers-Grant.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{coleman2018employment, author = {Coleman, Neil}, title = {{AN EMPLOYMENT GUARANTEE SCHEME OR A WORKSEEKERS GRANT}}, institution = {Institute for Economic Justice}, year = {2018}, month = aug, url = {https://iej.org.za/wp-content/uploads/2020/07/Stream-4-Policy-Brief-2-An-Employment-Guarantee-Scheme-or-a-Workseekers-Grant.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }