The Free Market Foundation (FMF) published an article more than a year ago saying that it was crisis time in South Africa. The country’s greatest crisis lies in the large-scale unemployment that is causing havoc in the lives of millions of people. The situation has not improved. In fact, it is being made worse by deliberate actions that result in more people being unemployed.
Almost a decade ago the FMF suggested that the simplest and most effective way to reduce unemployment is to exempt unemployed people from the restrictions of the labour laws so as to allow them to find jobs for themselves. We have kept repeating this proposal, which would entail issuing exemption certificates that would free the unemployed from the labour law barrier but would leave the job security intact of people who already have jobs; a win-win solution.
A change of attitude is needed on the part of all who are blocking the unemployed from getting jobs. Do they have no compassion for those who are desperate and destitute? Do they have no pity for those who live in poverty and misery? Do they not realise how dangerous it is when desperation and frustration boil over?
There is a grave danger of civil unrest when more than six million of the total potential workforce of 19 million has been unemployed for a long time. Government needs to take swift action to avoid unrest and the serious harm it could cause to innocent people.
Underlying the complaints about service delivery and lack of housing is the fact that most of the protestors are unemployed. Amidst the placards about service delivery there are always demands for jobs. Many of the problems of the protestors would disappear if they could only get jobs; any jobs where they can learn skills and recover their self-esteem.
Being without work and being unable to get a job, month after month, year after year, destroys the self-worth of the individual. The people know instinctively that something is badly wrong but can’t understand why there is zero demand for their labour.
Government policies aimed at addressing the unemployment problem have done very little to improve matters. The unemployment figures remain depressingly high and there appears to be an alarming lack of urgency in the Department of Labour, which is the department that must take responsibility for the current situation.
Official proposals for reducing unemployment amount to mere tinkering and will clearly not meet the government’s own target of five million jobs added in 10 years.
The proposals will not provide a lasting solution, if any at all. Taking into consideration the young people who will leave school in the next decade, the real target should be double what the government has set for itself. Imposing an increasing burden on taxpayers so as to make higher welfare payments or create make-work jobs in the public sector, or even to increase the size of the public sector, is self-defeating; it simultaneously destroys jobs and potential jobs in the wealth-generating private sector. It also whets the appetite of welfare recipients to demand more.
In trying to solve the unemployment problem, government would do well to give searching attention to the anti-business bias that appears to exist in certain sectors of its administration. Officials must realise that it is the private sector of the economy that will have to provide the millions of jobs that are needed to change South Africa into a nation of working people. It is the private sector that provides the taxes that pay their own salaries, the same private sector that in the final analysis pays all salaries, including those of all elected politicians through to the President of the country. Put plainly and simply the private sector is the goose that lays the golden eggs.
Given that the livelihoods of the entire nation are dependent on the efficient functioning of the private sector, it is astonishing to observe the malice it often faces from its beneficiaries. Business people are portrayed as the bad guys and their beneficiaries as the good guys, which is a strange way for beneficiaries to behave. What must be recognised is that the malice and distrust displayed towards the people who not only pay everyone’s salaries but also provide them with the goods and services they need in their daily lives, has a destructive dimension that imposes a cost on everyone in the country, not least on the poorest and most vulnerable.
Part of the solution to the unemployment problem requires a major change of attitude on the part of the government and its officials. A good start would be to deliberately work towards placing South Africa in the top ten of the World Bank’s Ease of Doing Business Index (currently 34th) and in the top 40 of the Economic Freedom of the Word Index (currently 82nd). The first step would be to stop increasing the burdens on business; to stop smothering them with costly regulations and then to review all regulations with a view to stripping those away that impose costs with little or no benefit. Every unnecessary cost imposed on the private sector either destroys existing jobs or prevents the creation of new jobs.
Solving the problem is simple in theory but obviously politically very difficult, otherwise there would not still be millions of unemployed people wondering where their next meal will come from. When the demand for labour increases, unemployment will decline, and when the demand for labour becomes huge, the decline in unemployment will be huge.
A change in attitude towards the private sector must be accompanied by a change in attitude towards the unemployed. First and foremost, the right of the unemployed must be respected to make their own decisions about what wages and working conditions are acceptable to them. They will take the best jobs they can find and it is malicious for outsiders, whatever their intentions might be, to step in and prevent them from doing so. The dispute over low wages in the Newcastle clothing factories has provided a graphic example of the callousness of intervening in the right of workers to make their own decisions about their own affairs.
President Jacob Zuma’s call for jobs, jobs, jobs must incorporate recognition of the fact that to the unemployed a job is a job, is a job is better than nothing at all.
The solution that is offered by our proposed Job Seeker’s Exemption Certificate is one that will disturb the existing labour dispensation as little as possible, yet allow a massive number of extra real jobs to be created. It would radically reduce the number of men and women forced into resorting to crime or the shame of prostitution out of desperation as the only means of maintaining themselves and their children.
It is time for government to start listening. They have to do something before an unstoppable tsunami hits us all.
- Temba A Nolutshungu is a director of the Free Market Foundation (FMF). This article first appeared on the FMF website, it is republished here with the permission of the FMF http://www.freemarketfoundation.com.