Unemployment in South Africa: Coming full circle

It is fashionable these days, and not without due cause, to reflect on the apartheid policies with scorn and dismay. Indeed, which sane and balanced person would advocate a return to those dark days of a racist apartheid regime with its unapologetic oppression of the vast majority of the peoples of this country? It is also fashionable to extol the virtues of the new South Africa and applaud many of the changes and much of the shift that has been like a fresh breeze bringing vitality and opportunity to a beautiful but blighted country.

However, with several recent developments, the breeze does not seem so fresh. When you dig more deeply and compare the causes for much of what is occurring today with the reasoning behind some of the legislation of the apartheid era, you find that the new has more in common with the old than many of us would care to admit.

The underlying sentiments and fears that led to evermore restrictions being put in place to govern the movement and actions of black and brown South Africans are numerous and wide ranging. They encompassed such ignoble and reprehensive sentiments as narrow minded bigotry, the fear of being overrun by a misunderstood majority, a desire to perpetuate a narrow and biased culture and to impose this culture on others. What is often forgotten is that an important, and some would argue the main, cause underlying these policies was purely and simply economics. Economics in its most rudimentary form.

Their nomadic existence having been denied them, black and brown potential workers streamed into the cities looking for better opportunities. Life was not easy. The slums were overcrowded and men and women of all ages sought desperately to sell their labour to those willing to pay.

In the aftermath of the Anglo-Boer war, many mainly Afrikaner families had been forced to leave their farms. They also converged upon these same cities and towns seeking opportunities. Many of them had few skills or training and found themselves competing with blacks for work.

A large part of the impetus for apartheid was the protection offered to these unskilled, rural Afrikaners by the imposition of discriminatory laws regulating which job opportunities should be reserved for whites and which should be available for blacks and other people of colour.

Seldom, though, can laws be enforced without resulting in secondary effects, so-called unintended consequences. One of these consequences was that to preserve the economic facade, ever more and wide-ranging new regulations were required to demarcate and isolate from each other the various population groups.

The distorted society and economy resulting from this inevitably lead to sub-optimum economic performance and, ultimately, benefited no-one other than the unskilled white workforce and their dependants, and then only in the very short term. The most notable losers were the skilled and semi- skilled non-white work force who were excluded from most of the skilled job opportunities.

In post 1994 South Africa, we have seen the final destruction of this false facade which left, as its legacy, a vastly distorted social and economic landscape of this country. In its place, sadly, we have contrived to build an equally distorting labyrinth.One distorting factor is our post 1994 labour legislation, much of which disenfranchises a major sector of our community, i.e. the unemployed.

The minimum wage regulations and the restrictions on dismissing sub-performing workers has created a situation in which a premium is placed on automation and, in fact, reducing the size of the work force. The labour lobby represents only those who currently have jobs and furiously defends the "rights" of these workers. From the perspective of the unemployed, this landscape is beginning to resemble, more and more, the protective working environment of the old apartheid South Africa. The differentiation may not be based on skin colour but the effect is the same.

Less productive and over-priced workers in employment are increasingly being protected at the glaring expense of enthusiastic, often skilled, but always currently unemployed, potential workers. The unemployed have no lobby to represent them and their views, wishes and dreams are swept away by the loud, insistent and over-bearing voices of those enjoying the protection afforded them by current employment and union representation.

A 1976 survey by the American Economic Association found that 90 per cent of its members agreed that increasing the minimum wage raises unemployment among young and unskilled workers. Another survey carried out in 1990, found that 80 per cent of economists agreed that increases in the minimum wage cause unemployment among the youth and low-skilled.

The protection enjoyed by striking workers is another area which deserves the attention of critical, unbiased and independent analysis. The number of working days lost to strikes in South Africa has increased alarmingly and it is difficult to reconcile this reality with that other one, our huge level of unemployment. Once again, it is difficult not to arrive at the conclusion that the plaintive voices of those wishing to work are drowned out by the chorus of organised labour, ostensibly in the name of fairness and justice, but in reality predicated more on a selfish interest to protect a privileged position. No wonder then that the South African work force is described as non-productive and militant by foreign, would be investors, who, as a direct result of this, choose to locate their factories elsewhere.

The underlying motivation could not be more divergent but the laws imposed on us by the two regimes have remarkably similar results - the exclusion of a large proportion of the population from the formal economy.

South Africa does not have the luxury of time on its side. Fifty two per cent of the population of the country is below the age of 25, and, among the 16 to 24 age group, a staggering sixty one per cent are unemployed. This situation is extremely dangerous and cannot be allowed to continue without a serious attempt being made to come to grips with the underlying causes. Should we continue to bury our heads in the sand and refuse to acknowledge and deal with the obvious, we will all be held culpable by future generations of having been in a position to do something but failing to try.

What may be waiting for us threatens not only the continued existence of the ANC, but also the chances left to us to make this country stronger, wealthier and peaceful.

AUTHOR Robert Wassenaar, a former bank executive, is a member of the Executive Committee 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/ 21 February 2012

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