Covid has robbed SA’s poor of lives, money, resilience and hope

The Covid-19 pandemic has affected poor South Africans’ ability to weather future potential crises because of their precarious financial positions.

This is one of the findings contained in a new Southern Africa – Towards Inclusive Economic Development (SA-Tied) research study, which showed the devastating impact the pandemic has had on the livelihoods of township residents.

Drawing data from SA’s NIDS-CRAM survey, researchers Simone Schotte and Rocco Zizzamia discovered that people living in informal housing — concentrated on the fringes of urban centres — had the highest incidence of financial distress in the early phases of the pandemic:

• Half lost their main source of income.
• Two thirds ran out of money for food.
• One third went hungry during the initial lockdown.

Schotte and Zizzamia then traced the impact of the pandemic on the livelihoods of 15 residents of Khayelitsha, on the Cape Flats.

Their research findings highlighted three consequences of the pandemic, the first being a shock to the labour market.

“The collapse of survivalist livelihood strategies during this crisis, particularly pronounced in the informal sector, severely deprived the poor and the vulnerable of their ability to secure a living on their own.

“The shock to earnings and employment affected household spending, posing a risk to food security, particularly during the early phases of the pandemic.

There was a general sense of loss of individual control and agency brought about by the pandemic, which led to increased psychological distress.

—  SA-Tied research study

“In this regard, the expansion of government social protection through top-ups to existing grants and through the introduction of a new social relief grant has been indispensable in sustaining the livelihoods of the poor,” the researchers found.

Another finding was that the pandemic decreased resilience to future crises.

“The pandemic’s initial effect on livelihoods has negatively affected families’ ability to cope with potential future crises – which could include the second wave of Covid-19 infections from which SA emerged in February 2021.

“Households have lost access to both formal and informal mechanisms of social insurance in the crisis. For example, several respondents reported defaulting on funeral policies, drawing down on savings, witnessing rotating savings and credit associations disintegrate, and losing access to remittance income.”

Psychological distress, brought on by the pandemic, was also another finding that emerged in the study.

“There was a general sense of loss of individual control and agency brought about by the pandemic, which led to increased psychological distress. Individual anxieties were centred on where respondents have ‘skin in the game’ – younger men were distressed primarily about their perceived loss of agency in the labour market, while older respondents were more anxious about the uncontrollable disease environment.”

“The shock of the Covid-19 pandemic has deepened the economic vulnerability which preceded the crisis – with potential long-term consequences.

“The labour market recovery has been strong but uneven and incomplete, and households have turned to liquidating their small savings and defaulting on insurance payments in the absence of alternative ways to cope.

“In addition, school closures and the constraints that poor children have faced in online teaching may hold down their chances of moving up the social ladder and deepen existing inequalities,” says researcher Schotte.

Zizzamia emphasised the indispensable role social grants played in sustaining a basic standard of living during the pandemic.

The pandemic’s initial effect on livelihoods has negatively impacted families’ ability to cope with potential future crises.

—  SA-Tied research study

“Many of those we interviewed had fallen back to subsisting entirely on social grants after the initial shock last year. As severe as the consequences of the Covid-19 shock have been in SA, the impact would have been far more severe in the absence of the existing social safety net.”

The study found that while economic distress since the onset of the pandemic was experienced across the income range, it was the poor who were affected the most.

“The transient poor and the vulnerable non-poor faced the highest risk of job loss, were similarly exposed to severe financial pressures as the chronic poor, and experienced elevated levels of food insecurity.

“Analysing the pandemic impact, it is important to understand that the transient poor and the vulnerable non-poor share a number of structural commonalities, which are masked by their static division along the poverty line. Both are in a position of economic insecurity and instability, which primarily derive from their volatile position in the labour market.

“Respondents who were more resilient to the shock (that is, the middle class and elite) were more likely to be formally employed, with a permanent work contract and union coverage.

“By contrast, the transient poor and the vulnerable were more likely to be in unstable and informal employment relationships, and a larger share was either unemployed or economically inactive before the pandemic.”

“Overall, in our sample, the labour market shock affected a population which does not have a particularly strong attachment to the formal wage labour market, but who nevertheless remain heavily reliant on labour income — often derived from informal work and generally shared within extended support networks.”

“School closures posed a double burden to children from socioeconomically disadvantaged backgrounds. The absence of meals provided at schools posed risks worsening food insecurity, and many were lacking the basic infrastructure to continue remote learning, reducing their chances of educational attainment and future upward social mobility.”

According to the study, the success with which households were able to withstand the pandemic shock depended largely on their ability to access formal or informal systems of social protection.

“In face of the Covid-19 labour market shock, government grants provided an essential, stable stream of income.

“In many cases, respondents and their households relied primarily or even exclusively on social grants when labour incomes collapsed, and would have been left destitute in their absence. However, many also complained that the top-up was insufficient, given the economic challenges they faced, including rising prices for basic items.”

To buffer the loss in household income, many respondents indicated they were forced to run down savings and/or to default on policy and insurance payments, leaving them vulnerable to future shocks — including the health risks posed by the pandemic.

One respondent said: “Economically and health-wise I am worried because if anything would happen I don’t know where I would go or where to start. If any of my family members were to die, I am not sure how I would bury them because I am not working and my policies lapsed ever since I stopped.”

The study also found that older women and those with family were more worried about the health risks posed by the pandemic and placed more emphasis on complying with hygiene and social distancing regulations.

They also expressed concern about people ignoring the rules — reflecting an attempt to maintain some control over their environment.

One elderly female respondent, who used to supplement her pension by selling grilled intestines, reported stopping her business because of being “terrified” about catching the virus.

Another respondent expressed his concerns about the risk of infecting his family and the limited actions he could take to prevent this, as he continued his work at a grocery store throughout the lockdown: “The shop is always packed so I meet these different people and come back home. It is even more difficult for us people living in hokkies [small shacks] because we are in the same room and there is no way I can isolate myself from them.”

Young men were much less worried about the health risks in the pandemic context.

For instance, one young man admitted that “last weekend I went out to drink and there were seven of us in a hokkie. We were not wearing masks or any protective gear. We make a joke about it when we were drinking and someone coughs.”

The study found that young men were more concerned about being unemployed than the health risks posed by the virus.