Eustace Davie is a director of the Free Market Foundation and author of Unchain the child.
The views expressed in the article are the authors' and not necessarily shared by the members of the Foundation.
This article may be republished without prior consent but with acknowledgement to the author.
The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for
a non-racial, free and prosperous South Africa.
As a policy organisation it promotes sound economic policies and the principles
of good law. As a think tank it seeks and puts forward solutions to some of the country's most pressing problems: unemployment, poverty, growth, education, health care, electricity supply, and more. The FMF was instrumental in the post-apartheid negotiations and directly influenced the Constitutional Commission to include the property
rights clause: a critical cornerstone of economic freedom.
+27 11 884 0270
PO Box 4056, Cramerview 2060
This article was first published on Mail & Guardian on 25 July 2022
Government’s assault on the unemployed
Is it a game the Government and its Department of Labour and Employment are playing with the lives of unemployed citizens of South Africa? If it is a game, it is an insensitive, cruel, and senseless game, which is destroying the lives of millions of individuals and families.
UNEMPLOYMENT IN SOUTH AFRICA – STATS SA 31 March 2022
Employed 14.544 million
Unemployed 7.921 million
Discouraged workers 4.832 million
Unemployed and discouraged (46.72%) 12.753 million
Total potential workforce 27.297 million
South Africa has one of the highest, if not the highest, unemployment rates in the world. It should not and need not be so. The mass unemployment results from artificial legislative barriers to entry into the labour market. Remove the legislation and regulations that are the root cause of the inability of jobseekers to access jobs and the mass unemployment will steadily disappear like mist in the wind.
Policies that are the primary cause of mass unemployment
The figures from Statistics SA tell a grim story of the deprivation of the poorest and most needy members of the population. Ask the members of government and their cohorts and they will tell you that they do a great deal for the poorest and least fortunate members of the population.
They will tell you that they persuaded Parliament to introduce the minimum wage law to force the employers of low wage people to pay them a national minimum wage. This minimum is applicable across the entire country no matter whether employers and prospective employers can afford higher wages. And no matter what challenges face them in their businesses and daily lives and despite the general disparity in employer incomes and wages between city, country, and geographical areas. They will also proudly tell you that they persuaded government to increase the protection of people with jobs and make it more difficult and costly for employers to terminate employment agreements. U.S. President, Ronald Reagan, once said of excessively strict labour laws, “If you can’t fire, you don’t hire.” What is never mentioned is that strict labour act as harsh barriers to entry into the labour market.
The 12.753 million unemployed people are prevented from working because they cannot discuss, let alone cut voluntary deals, with potential employers. The high rate of unemployment tells you that few employers in their right minds, are prepared to “buck the system” by agreeing to employ people who offer to work for less than the minimum wage, or to work under conditions of employment banned by the labour laws. The millions of unemployed South Africans have discovered that the right to price their own labour and agree the conditions of employment that they would accept, are not theirs to decide.
Despite warnings from economists and employer organisations that the introduction of such supposedly caring and worker-beneficial measures, would have devastating consequences for low paid workers, young, old, and otherwise disadvantaged people Parliament approved and continues to support such strict measures despite the clearly harshly negative consequences for the rapidly increasing number of unemployed people in the country.
Consequences of the adoption of inappropriate laws
The labour regulations that are currently applicable in South Africa have had increasingly negative consequences for unemployed people as reflected in the Stats SA figures (summarised above and covering the first quarter of 2022, which closed on 31 March 2022).
Tragically, young people are particularly hard hit by the barriers to entry into the labour market: 63.9 percent of young people aged 15 to 24 years, and 42.1 percent of those between 25 to 34 years, were unemployed, according to the 31 March Q1 2022 report.
Talking about totally ending involuntary unemployment in the country may sound impossible but with the replacement of harmful policies with sound freedom-oriented policies, based on an ethos of “freedom to work” leaving decision-making in the hands of work seekers, unemployment reductions will rapidly follow.
FMF provides logistical support to the autonomous Langeberg Unemployed Forum
The FMF has been providing logistical support for the Langeberg Unemployed Forum (LUF), which is based in the Langeberg area of the Western Cape. Donations from the Mary Oppenheimer & Daughters Family Trust, the Atlas Network in the USA and a private personal donor made the support possible. The FMF has created and maintained a website https://www.letmework.co.za a Face Book page @LetMeWorkZA, assisted the LUF in telling their story on Twitter, and in the publication of articles in the Press.
In seeking for a solution to the unemployment problem that would give long term unemployed South Africans access to the labour market, the LUF adopted the Job Seekers Exemption Certificate (JSEC) which provides a way to do so without needing to repeal any existing labour legislation. In other words, a win-win solution that gives the unemployed people access to the labour market without tampering with the rights of people who already have jobs. The LUF have lobbied the government to implement this proposal to dramatically reduce unemployment in the country. Unfortunately, their appeals have fallen on deaf ears.
Complaint lodged by the LUF with the Human Rights Commission
Not only are the regulations and legislation that have been introduced, harmful, but they conflict with provisions in the Bill of Rights. Three years ago, the LUF lodged a 21-page Complaint document with the South African Human Rights Commission (SAHRC) detailing the extent to which Parliament had adopted unconstitutional legislation and regulations, harmful to the interests of unemployed South Africans.
The response from the SAHRC essentially said: “If your complaint is that Parliament is causing harm to the unemployed, take your complaint to Parliament!” A rather crass response from the Constitution’s Section 181 (b) “State Institution Supporting Constitutional Democracy.” Although the SAHRC has a specific responsibility to ensure the realisation of the rights concerning housing, health care, food, water, social security, education, and the environment, looking out for the rights of the country’s unemployed people surely falls squarely within these specific responsibilities. In the interests of South Africa’s 12.753 million people a policy revision by the SAHRC is crucial. Under the circumstances the unemployed people in South Africa would be justified in crying out, “Eli, Eli, lama sabachthani?