Reader Blog
Reader Blog

What do we do with another 14000 unemployed?

By Aidan Prinsloo

In my previous contribution, I made a fairly simple point: the retrenchments proposed by the big mining companies in South Africa are unavoidable. The only way our mines can offer competitive prices and look after their employees properly is if they move from the outdated and inhumane many people, low-tech model to the higher tech, fewer people model. The alternative is that mining companies crash and burn while trying to please everybody, because it’s simply unsustainable to employ as many people as they have while offering them a decent wage. The government will face the same dilemma if it nationalises the mines as the Association of Mineworkers and Construction Union proposes it should.

So, what then do we do with the new lot of unemployed? One thing is certain: they cannot simply go to another sector and find jobs. As it is, our unemployment rate sits at 25.5% of our current labour force. The IMF predicts the current trend of policy making and urban unrest will hamper any attempts at job creation. So an extra 14 000 plus unemployed will definitely not be able to ”help themselves” or find employment elsewhere. Instead, they’ll have to get into a very long queue for work. This is very worrying, to say the least. For those who have to live with being recently unemployed (and having very few skills to boot!), it’s an unimaginable tragedy.

This is where the government actually does need to step in. South Africa currently exports most of the raw materials harvested from the country. We then buy these material back in the form of cars, computers and other finished goods. We have here an incredible opportunity for job creation. If these sectors can be developed — especially sectors that use the raw materials from our own mines — we may be able to absorb not only the recently unemployed from the mines but perhaps some of the others from our large pool of unemployed.

In order for this sector to be developed we need our government to do two things: 1) Create policies that protect and encourage South African companies working in these sectors and 2) provide economic stimuli for companies in this sector by taxing imported goods more than locally produced goods. Government, unlike the mining giants it so happily attacks, is actually in the position to change things for the better for the unemployed. They need to choose a set of consistent policies which work together to strengthen multiple sectors of our economy.

Part of this involves doing whatever it takes to minimise the number of strikes in the country. They won’t be able to minimise strikes through force. Instead the government will have to actively foster a culture of realistic dialogue between itself, employers and employees. Strikes generally decrease a country’s ability to create more jobs and are therefore counterproductive. Most people realise this but are unable to come up with alternatives. What we need to learn now is how to encourage employers to employ more people without undermining the basic rights of South African workers. This is where government needs to listen to researchers and analysts and foster informed debate. Only when we have the facts and figures as a country can we have a meaningful (and hopefully fruitful) debate on labour relations.

The government needs to incentivise good business practices so that employers will have less reason to take shortcuts with their labour forces. Workers strike in response to these shortcuts because they feel powerless against their employers. The government needs to grant workers the power to approach their employers in a way that does not create an atmosphere that is toxic for job creation.

The government also needs to take better steps to protect South African industries from outside competition. Countries such as China may offer us cheaper goods than we can currently produce ourselves but we only hurt ourselves by importing their goods at prices that prevent South African companies from producing the same good. For this reason, one of the best things we can do is tax imported goods more and subsidise South African produce more.

Of course, these are all merely suggestions, but my point remains the same: the South African government can avert the impending disaster caused by a necessary shift in the mines by stimulating growth in other sectors of our economy. It’s the only way we’re going to combat our already high unemployment rate.

Aidan Prinsloo is master’s student in philosophy at Rhodes University. He is actively interested in the country in which he lives. He believes the only way we can overcome our current predicaments is through careful planning and rigorous, informed debate.

Tags: , , , ,

  • Stagflation
  • Breaking down South Africa?
  • Why the ANC continues to flounder and defend the power of patronage
  • South Africa’s policy choices unwittingly reinforce poverty