MONDAY, 10.00AM:
A DRAFT World Bank study claims South African unemployment rates are largely the fault of what the bank considers the high level of wages paid to black workers. The study, now being circulated in relevant government departments, also warns that the Basic Conditions of Employment Act will increase costs in industries already racked by unemployment.
The study mentions other factors contributing to unemployment: a rise in capital-intensive investment, a decline in private investment, and an unskilled workforce. But none of these are much explored in the document, which was prepared by the bank’s economist, Peter Fallon, and Nobel economics prize winner Robert Lucas.
The study recommends that macro-economic policies encourage the improvement of skills and growth in “labour-demanding” enterprises, tying in with its view that the problem of rising unemployment can be solved not by raising wages even further but by removing barriers to mobility.
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