First time in history – more than 10 million unemployed – CHRIS HATTINGH
You cannot legislate people out of poverty. You cannot regulate jobs into existence. Jobs need to be created, and at the moment, the South African government is slowly but surely suffocating businesses’ ability to create jobs by continuously adding more and more burdens on both employers and the unemployed - the latest being the National Minimum Wage (NMW). The NMW is a disincentive for businesses to employ more people. The only “real” jobs in an economy are found in businesses that are providing goods and services to consumers. All government jobs are paid for by current and future taxpayers.
For the first time in history, the number of unemployed people (as per the expanded definition) is more than 10 million. The higher the price of a good, the less of that particular good people will buy. This basic law of economics is ignored by the government, but it cannot escape the consequences of implementing laws and policies which contradict this law. According to StatsSA, the unemployment rate increased by 1.4 percentage points from 27.6% in the first quarter of 2019 to 29% in the second quarter of 2019. This means an increase of 455,000 in the number of people who are unemployed. The expanded definition of unemployment, which includes those who have stopped looking for work, is 38.5% - 10,226,000 people. SA must change course from policies such as the NMW, which inflate the price of labour and contribute to such an astronomically high unemployment level.
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Publish date: 07 August 2019
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.