“The World Economic Forum ranks South Africa as the 7th worst country out of 139 countries in the world in terms of its labour laws and regulations. This is an important consideration for the ACDP.
Employment has increased among higher-income groups in South Africa, while lower earners have lost jobs. Despite legislative gains for workers' rights, social inequality has grown, with most South Africans perceiving the gap between rich and poor asbeing the country's most divisive fault-line and potential trigger for violent, uncontrolled action?
The ACDP believes South Africa would benefit from a social dialogue on labour market policy that interrogates whether the political alliance between the ANC, COSATU and the SACP contributes negatively or positively to present labour ‘realities’. Hon Bantu Holomisa spoke of an Economic CODESA, perhaps we should take that idea forward.
Two sets of laws are seen as particularly problematic; collective bargaining (the legal process by which business, trade unions and government agree on wage escalations to exceed labour productivity growth) and dismissal protections that protect employees from dismissal despite performing poorly on the job. Both are credited with causing labour productivity to be very low.
To boost employment and raise economic growth rates The ACDP believes South Africa requires changes to labour laws and regulations that would promote high labour productivity and a link between productivity and remuneration. Productivity and global competitiveness are crucial!
When most people are employed, exploitation is less of an issue as workers can leave bad employers without the risk of unemployment.
For me the topic of immigrants is important in a conversation on the South African Economy and it is interesting to note that immigrants to South Africa have been perceived as having higher standards of literacy and education than their SA counterparts, are deemed to have a better work ethic, are typically happy to work for a lower wage and are less likely to join a trade union – all of these factors have made these immigrants increasingly attractive to employers...a mixed blessing we know as this has also made them targets of many local community’s dissatisfaction and anger.
My point here is that like South Africa, Hong Kong had to accommodate many thousands of refugees in the 1960s–people fleeing from China and Vietnam. To overcome the unemployment problem, Hong Kong made a deliberate effort to remove government’s heavy hand from economic activity to allow entrepreneurs to innovate and employ the country’s human and material resources to the best advantage of all. The results were spectacular and absorbed therefugees at such a rate that by the 1980’s employers were complaining of a shortage of labour. In 1960 the average per capita income in Hong Kong was 28 percent of that in Britain and by 1996 the situation was reversed and had risen to 137 percent of that in Britain. The difference was credited to socialism in England, and free enterprise and free markets in Hong Kong.
Of course the cost of employing people also affects whether or not an employer will be inclined to employ additional people or not. The earnings threshold is a significant factor influencing the labour cost to businesses, with a higher threshold likely to lead to additional costs for employers, especially smaller firms, who have to re-align payrolls and benefits, like overtime payments.
In terms of labour broking, it is the ACDP’s hope that South Africa will be rational and follow the International Labour Organisation (ILO) convention on labour broking. This allows the industry to exist, develop and grow, while effectively banning exploitative and abusive practices.
Corruption is obviously an important consideration with 25 to 30 billion rand corruption in one year in procurement alone. We can’t expect to remove systemic povertywithout addressing systemic corruption.
The significant amount we spend on welfare grants is of course necessary in the short term but unsustainable in the long run and we need to take a far more targeted approach.
Other speakers have made reference to critical issues like water, energy, agriculture, minerals and manufacturing which we will need to prioritise but enough has been said to stimulate debate in these areas and the ACDP looks forward to today’s discussion.”