The paper had been released just the previous month. It starts by acknowledging a perceived linkage between being part of the middle class and having a degree of financial well-being:
Being middle class entails being free from poverty, which means being able to afford the basic things in life – not only today, but also tomorrow. It is actually this very confidence which many people will name first when being asked what makes them self-identify as middle class. It is about the freedom they have to decide what to spend their money on, and the stability needed to engage in midand long-term planning. It is also about the opportunities they are given to move ahead in life, which some people never get, and about the financial cushion that allows them to take risks and to cope with adverse shocks.2
But then they move quickly to the crux of the problem: the lived experience of the average South African is that this type of financial stability is still highly fluid. If anything, it is in constant flux, with people embarking on a road to financial well-being and social mobility, then finding the process derailed.
Evidence from psychological and health literature has shown that vulnerability to poverty can reduce the well-being of households, even if a deterioration in material well-being does not materialise.3 It is not only current income or consumption that matter for actual welfare, ‘but also the risks a household faces, as well as its (in)ability to prevent, mitigate and cope with these’.4
In mapping how prevalent this movement is, the authors ask two important questions:
- What factors tend to undermine social mobility?
- Could financial services and products play an important role in both providing social protection and facilitating social mobility?
At first, we thought this would be a fairly straightforward exercise. As the authors themselves suggest, further research was needed. We thought the avenue for investigation was therefore relatively clear. But the more we thought about the problem, the more it evolved into a far more complex set of considerations.
To begin with, sustained financial well-being and stability for individuals and their families can be achieved only in an environment where both economic policymakers and employers believe that achieving well-being is desirable for all stakeholders. There needs to be a shared vision that this would add both economic and social value to all three layers of our society: the broader economy, the workplace, and individuals and their families.
Until this edition of Benefits Barometer we had been looking narrowly at issues of ‘employee benefits’. We had argued that it was in the state’s, employer’s and employee’s interests if ‘employee benefits’ could be deployed to address the physical, emotional and financial well-being of the employee and their family.
If we could solve for basic individual and family well-being first, this would underpin economic growth.
In many ways, this suggested that evolving benefits into highly individualised portable solutions might be the best possible answer to addressing the incredible variability in personal agendas that exist in South Africa. But, as we argued in the previous chapter, it became increasingly apparent that such a narrow focus ignored the far greater issues at the root of the country’s economic growth conundrum.
As Francis Fukuyama points out in his powerful economic study, Trust: The Social Virtues and the Creation of Prosperity, where neoclassical economics got it wrong was by insisting people come together only to satisfy their selfish needs before retreating back to their ‘real’ social lives. As he argues, ‘the economy constitutes one of the most fundamental and dynamic arenas of human sociability’.5
We needed to first get a better handle on those social dynamics.
Turning the problem on its head: the role of social capital and trust
We realised that a better approach was to turn the problem on its head. We needed to start at the top and argue that until we, as a country, could develop a stronger reserve of social capital and trust between all parties to our economic success, economic development and growth would not be forthcoming.
We needed to move beyond the myriad historical barriers – economic, social and political – that have kept us from taking our rightful place on the global economic stage. We needed to identify exactly how South Africa could start to build the trust required between all economic players before any individual, group, family, corporate, employer, labour or political interest would benefit.
As Fukuyama argues: ‘If the institutions of democracy and capitalism are to work properly, they must coexist with certain pre-modern cultural habits to ensure their proper functioning […] Law, contract and economic rationality must be leavened with reciprocity, moral obligation, duty toward community, and trust which are based in habit rather than rational calculation.’6
The problem for South Africa, which ranked 8th in the world in Fearon’s global comparison of ethnic and cultural diversity (The Netherlands, by comparison, ranks 151st)7,is, how does one identify those defining cultural habits that represent our collective vision? The power of the multistakeholder collaboration exercise that we recommend so emphatically here is that it will play a critical role in allowing us to move more effectively to that unified voice.
In piecing together the storyboard for Benefits Barometer 2018: Creating the well-being economy, we realised that what we had in effect set out here was a framework for creating this measure of social capital and trust for all stakeholders in the South African economy. This meant our research could now evolve into: BENEFITSALL BAROMETER.
'A multistakeholder approach' provided several excellent examples of just how those high-multiplier multistakeholder collaborations could work:
- We showed how we could create a much richer discourse around second-tier city development by expanding the model to explore broader social dynamics .
- We showcased a solution where employers, employees, SMMEs and municipalities could collaborate to solve for that bane of all our workday worlds: transportation costs, congestion and reliability.
- We tackled the question of how to create much needed long-term-care solutions for elderly people by using investment savings targeted at retirement benefits.
- We highlighted how we could transform the world of asset management in terms of both the ends that it serves and how its business models could better align with the needs of South Africans.
Every aspect of Benefits Barometer 2018: Creating the well-being economy is peppered with additional examples of the multiplier effects that can be achieved through collaborative engagements.
All that said, though, we are left with the realisation that our work here is only just beginning. In effect, we had laid down some floorboards here and there, but there were any number of gaping holes that needed further consideration before the foundation would be properly set.
And this is what led us to the recognition that we needed to recast Benefits Barometer to be something far more dynamic than an annual publication.
What followed in the course of our work was a mushrooming of discussions and debates on the following questions: