Free Market Foundation wins Templeton Freedom Award

21 October 2009
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On Monday the Atlas Economic Research Foundation announced that the Free Market Foundation (FMF) had been awarded a $10,000 prize in the category Free Market Solutions to Poverty for its book Jobs for the Jobless by Eustace Davie, which proposes a workable solution to South Africa’s mass unemployment problem. The New Economic School in the Republic of Georgia won a similar prize in the same category for its efforts to reduce poverty by focusing the political debate in Georgia on pro-growth policies.

The Templeton Freedom Awards for Promoting Liberty, managed by Atlas, is the largest international awards programme for think tanks. The sixteen organisations recognised in the 2009 programme represent four continents and twelve countries – Brazil, Chile, Egypt, India, Paraguay, Peru, Poland, the Republic of Georgia, South Africa, Sweden, Slovakia, and the United States. Winners were selected from more than 130 applications from 47 countries, by an independent panel of judges. The 2009 awards grant a $10,000 prize to each winner, and two prizes are given in eight categories.

One of the independent judges who adjudicated the Free Market Solutions to Poverty category said about Jobs for the Jobless, “One single idea can be much more powerful than one thousand actions and this is a perfect example." The single idea referred to by the judge is the proposal that unemployed people should be allowed to decide for themselves what amount of wages and conditions of employment they find acceptable and to negotiate with prospective employers on that basis.

Jobs for the Jobless proposes that anyone who is unemployed for six months or more should have the right to a Special Exemption (SPEX) Certificate, valid for two years, that exempts the certificate holder from statutory labour laws. An important condition of the exemption, contained in the proposal, is that written contracts specifying the most important conditions of their employment agreements, be entered into between SPEX holders and their employers. At the expiry of the stipulated contractual period, the employee can then renegotiate with the employer as to whether the SPEX proposal should fall away and be supplanted by working conditions in terms of existing labour legislation.

The SPEX proposal is grounded in some very important considerations. Labour unions have fought long and hard to obtain certain statutory privileges for their members. That they will fight hard to retain those privileges is recognised and respected. So the SPEX proposal avoids tampering with those privileges and does not seek to weaken the position of labour unions in their relations with employers. Adoption of the SPEX proposal would leave the existing labour law protections afforded to employees untouched and intact.

Small firms are the most likely potential employers of the young, inexperienced, unskilled, old or otherwise disadvantaged jobless people. The general approach of governments elsewhere is to build exemptions for small firms into the labour laws that encourage such firms to employ the jobless and thereby reduce unemployment. However, this option is also likely to be resisted and therefore unlikely to be implemented by SA’s government.

Without something like a SPEX certificate, how can government get the unemployed working and learning valuable skills without disturbing its own relationship with the labour unions? Tampering with the job security of current employees appears to be a no-no, even as far as micro firms are concerned. Current proposals for dealing with unemployment and the poverty and misery that go with it are welfare grants and government make-work jobs subsidised by taxpayers. Solutions that are not sustainable.

The unemployed must be given the opportunity to make their own way in life, to regain their self-respect and the respect of their families and friends. They must be given the opportunity to learn skills on the job that will enable them to always be assured of work or even to open their own businesses. Armed with a SPEX certificate, the jobless will be able to scour the job market for a job they can enter into on their own terms: they will learn skills; they will become self supporting; they will regain their self-respect; and the ills of mass unemployment and poverty will diminish.

Government has the power to set the unemployed free under carefully considered circumstances. It could become a badge of honour for employers to help alleviate poverty by employing holders of SPEX certificates and teaching them skills – we appeal to government to give them that chance. Above all, we appeal to government to give the jobless a chance to liberate themselves from the vicious cycle of unemployment, poverty and the propensity for crime.

Author: Temba A Nolutshungu is a director of the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

FMF Feature Article / 20 October 2009

Note: The publication Jobs for the Jobless: Special Exemption Certificates for the unemployed by Eustace Davie can be downloaded at http://www.freemarketfoundation.com/htmupload/PUBDoc1059.doc/a>

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