The Impact of Closing Down State-Owned Factories in Townships on Unemployment and Poverty
For long periods, state-owned plants have been the backbone of the townships, providing employment, skills, and stability in these marginalized communities. Such factories developed small, and sustainable local economies and opened up income channels to these families. Workers had skills and a wage, and families were ensured an income. However, with political shifts, economic restructuring, and globalization, the factories began to close. The closures and their impact are the townships facing increased unemployment and poverty and a deteriorating cycle of socio-economic deprivation on which the townships are reliant to sustain their everyday lives.
Declining Economic Lifelines
Factories in townships, these areas being the most disadvantaged in an Apartheid era, became the most employers. Factories were built for the purpose of job creation and industrial growth. When these factories closed down, the most of shattering and immediate impact of job overshadowing thousands of employment losses.
Residents of townships also had little formal education and little else in the way of skills, and so there were few other job opportunities available. If there were any, were there were small, private businesses. When a single factory was closed however, oof the entire neighborhood would lose their primary source of income.
The Collapse of Local Economies
Factories do more than just house employees; they promote and encourage the surrounding businesses and services. When they closed, the ripple effect through township economies was small. Local transport, schools, small shops, and informal traders felt the impact. Local spending and money circulation dropped. Workers in the informal sector – taxi drivers, hairdressers, and hawkers who relied on factory employees – saw their incomes drop.
This created a negative multiplier effect; in a factory, a single job is lost, and in the community, multiple jobs are lost. Local markets lose their economic activity, and with it the potential to prosper. This is the economic hardship that was created.
Rising Unemployment and Social Instability
Job losses in public sector factories made an already bad situation much worse. People, especially, young people, entering adulthood fell victim to an economic crisis with no factories or entry-level jobs, no apprenticeships, no training opportunities, and left with a void of social issues to contend with.
Social issues of crime, drug abuse, domestic violence, etc. are direct result of high unemployment in a made worse in a township. Social issues are formal education is missing. Legal social structures break down and families are stressed when people are forced into closed economies.
Loss of Skills Development and Career Pathways
State owned factories were not just places of employment, they conduits of skill transfer. Uncertified, though practical, workers learned welding, and mechanics and a few other valuable engineering skills, Textile fabrication, and operation of machines. Practical and valuable skills. Future generations suffer when training stops. Closing factories mean loss of access to training.
The inability to develop further skills became a problem for generations. Parents employed in factories lost the ability to transfer technical expertise or assist their children in obtaining secure jobs. Young people then joined the labor market untrained, further hindering their prospects for decent employment.
Migration and Family Disruption
With the closure of plants, many were forced to move away from townships in search of work, frequently in towns or urban centers. This created new social problems. Families were fractured, children were left behind with grand parents, community leadership and skilled capacity was lost. For those who remained the opportunities continued to vanish.
Some migrants were left in new forms of urban poverty due to overcrowded informal settlements or unstable temporary employment. Loss of jobs in the township also disrupted local economies and added strain on urban areas.
Impacts on Mood and Mental Health
The mental impact of being out of work is often lost in translation. Work provides people with meaning and stability. Workers experienced deep distress and embarrassment when factories were closed, and jobs were lost. Older workers who have not been able to work at jobs for decades have taken the brunt of this. Depression and anxiety have become more common, and before good and timely access to mental health services became available, many people worked through life alone.
Of course, families felt the impact of the emotional distress as well. Unemployment related stresses resulted in more conflicts in the home. Children in these households were affected with the lack of income by facing hunger, no school supplies, and little hope of rising in the social system. This created and perpetuated a cycle of poverty and emotional distress.
Limited Alternatives and Failed Transitions
The loss of factories and the loss of jobs created a need for the government to step in to provide new jobs in an alternative economy. This, however, has been the most severe of the transitions as most of the factories have been closed for years. Planned new initiatives take a long time to implement and, in many cases, never get implemented at all. New industries are often introduced, but they usually disregard the lower skilled workers and the people that are in need the most.
Also, some efforts to promote small business growth in townships face multiple obstacles, such as, lack of credit, inadequate infrastructure, increased crime, and limited market access. Leaving state-owned enterprises to do little to fill gaps as they operate without any strong entrepreneurial support systems.
Legacy Effects of Poverty for Generations to Come
The closing of state-owned facilities worsened intergenerational poverty in the region. Parent’s loss of such stable employment meant their children would lose access to better opportunities, quality education, and social issues that poverty would exacerbate. It resulted in entire communities being in a vacuum with chronically high unemployment, in poverty, and without opportunities to access escape routes.
Absence of a reliable economic anchor means that township social grants and informal employment became their main sources of income. While informal/emergency employment may fill the gap temporarily, it won’t the replace economic benefits of sustaining employment.
The state-owned enterprises closure in townships was not simply an end to industrial revolution employment with the factories closing. It was employment. It was the end of an entire way of life for entire communities, the end of a social safety net, of social stability, social fragmentation, and the end of the industrial revolution.
To be able to mitigate the negative impact of the closures, however, any solution must focus on the reconstruction of sustainable economic opportunities in the townships. Relatively, there needs to be a focus on the provision of relevant infrastructure, the opening of training programs, funding local manufacturing, and the provision of funding on entrepreneurship. Without any of the efforts outlined, the collapse of the township factories will continue to inflict economic damage and poverty for generations.
