South Africa’s unemployment crisis is the consequence of decades of inadequate growth coupled with some of the effects of globalisation, technological change and bad policy choices. There are limits to the pace at which this can be rolled back, so realism about how quickly the crisis can be resolved is needed. At the same time, the scale of unemployment has been greatly magnified by policies that have increased the cost of labour, especially unskilled labour, both in absolute terms and in comparison with the costs of mechanising firms’ operations. The result has been not just slow growth, but growth that has absorbed less and less unskilled labour. Determined action is essential if we are to have any chance of building a more inclusive economy. Although a rapid resolution of the unemployment crisis is not possible, real progress is. To achieve this, government has to grasp that politically difficult decisions will have to be taken. Were all the recommendations made here implemented, South Africa would stand a much greater chance of both faster economic and employment growth. How these reforms are implemented matters, of course, and the greater
the level of consensus across our society and among “social partners”, the better.
