Tired of being poor? You should move to the city - IOL

12 July 2018 - Cities are our best hope in solving our very large problems of poverty and unemployment, but government policy must reflect this.

Marius Roodt

In the heyday of British imperialism in southern Africa, young fortune seekers (almost all male and white) who found themselves at the Fairest Cape were often exhorted to ‘Go north’ to what is today Zimbabwe and Zambia. One might give similar advice to young South Africans seeking to improve their lot in 2018 – but instead of ‘Go north’, the cry would be: ‘Go to the city!’

International research shows that urbanisation and development are closely linked, and this shouldn’t be a surprise. As renowned Harvard economist Ed Glaeser has argued, cities are quite possibly humanity’s greatest invention. The proximity of humans to one another increases productivity encourages the spread of ideas which encourages innovation and often provides people with higher living standards than those prevailing in rural areas.
 
Evidence in South Africa confirms this; those living in urban areas are more likely to be employed and to have higher standards of living than those remaining in rural areas.

The rates of unemployment in our cities compared to rural areas reveals something quite striking – the number of discouraged work seekers is far higher in rural areas than in cities. More people in rural areas have simply given up hope of finding work, but this is not the case in cities.
In South Africa’s cities (defined as our metropolitan municipalities) unemployment is very slightly higher than in rural areas – 26.8% (on the strict definition) against 26.6% in rural areas. However, if we include discouraged work seekers (which is a more accurate reflection of unemployment and includes those who would like to work but have given up actively looking for a job) the difference is far more pronounced. 

In rural areas, the expanded unemployment rate is 41.4% or very nearly double the strict unemployment rate. However, by contrast, expanded unemployment in cities is just over 30%, only four percentage points higher than the strict unemployment rate. The number of discouraged work seekers is far higher in rural areas, proportionally and in real terms.  

If we drill down to particular regions, this difference is even more pronounced. In Nelson Mandela Bay (NMB), strict unemployment is a fairly high 36.3%. Strict unemployment in the Eastern Cape outside of the two metros (NMB and Buffalo City or East London) is 36.6%, only very slightly higher than in NMB. However, expanded unemployment in NMB is only 36.4%, meaning there are very few discouraged work seekers in that city. By contrast, if we look at the expanded unemployment rate in the non-metro Eastern Cape, it is over 50% –more than half of all people are unemployed. 

The figures are similar in other parts of the country, too. In eThekwini (Durban) strict unemployment is 20.3%, rising to 27% on the expanded definition. Strict unemployment in the rest of KwaZulu-Natal is 23.9% – but, on the expanded measure, it more than doubles to 48.6%. 

This is also the case, for example, in Limpopo, where strict unemployment is below 20%, but expanded unemployment is nearly 37%. The trend is similar across the country – cities tend to have fairly small differences between strict and expanded rates of unemployment, while the difference is far more pronounced in rural areas. In short, people in cities have more hope that their lives will improve than those living in rural areas.

Findings from two researchers at the Human Sciences Research Council (HSRC), Ivan Turok and Justin Visagie, back this up. They found that between 2008 and 2014, some 385 000 people were lifted from poverty simply by moving from a rural area to an urban area, and thus securing access to the labour market and waged employment. Before these migrants moved to the city their poverty rate was estimated at 80%. Six years later – after moving to the city – their poverty rate had declined to 35%. Those who had remained in rural areas also saw the rate of poverty decline, but much more slowly – from 80% to 70%. 

These rural migrants did not escape poverty by joining an established urban household. Rather, their escape from poverty occurred because they found work. The expanded unemployment rate of rural migrants fell from 50% to 15%, and 80% of those who had been previously unemployed found a job. The HSRC researchers also argue that moving to an urban area is an important factor in determining whether a person graduates to the middle class. 

These figures show that the government is barking up the wrong tree in pursuing Expropriation without Compensation (EWC). South Africa’s salvation lies in its cities. We need to make these areas where people can live in decent conditions, and close to employment opportunities which allow them to escape poverty and become established in the middle class. Becoming urbanised is one’s greatest hope of finding employment and escaping poverty. Land reform can play a role in this by giving title to people living in government housing, and by formalising shack settlements as far as possible (and where possible also providing title) – but this can all be done without EWC. In addition, a continued focus on farm and rural land will not solve our problems, but only exacerbate them.

Cities are our best hope in solving our very large problems of poverty and unemployment, but government policy must reflect this.

* Marius Roodt is a campaign manager at the Institute of Race Relations (IRR) ), a think tank that promotes political and economic freedom. If you agree with what you have just read then click here or SMS your name to 32823.   

https://www.iol.co.za/news/opinion/tired-of-being-poor-you-should-move-to-the-city-15980788

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