“No-one disputes that South Africa needs millions of new jobs. However, the
current labour market regime and the policy model underpinning it is illsuited
to achieving significant employment growth. It is not possible to create
millions of jobs for a relatively unskilled workforce while insisting on a set of rules that drive employment costs relentlessly upward. Those costs – wage and non-wage – have made firms much more reluctant to take on staff, particularly
those with few skills and little education. As a result, the economy has become less employment-intensive and increasingly dominated by large, capitalintensive firms. This approach has no hope of raising employment levels to
those commonly found in other middle-income countries. Policy-makers need to address this flawed thinking about the labour market, and the regulatory regime that has emerged. Workers must be protected, and South Africa’s wage-setting machinery must be fair to all parties. But ways must be sought of achieving this without serving as a disincentive to create employment.”
