The David Gleason Column
Of all the many matters requiring national attention, three are now vital for our long-term well-being. All three carry significant economic overtones.
First, the endless controversy over labour needs to be put into the perspective of formal sector job losses. Over the past nine years about one million jobs have been lost to redundancies, restructuring and economic inefficiencies. Most of these (around 650 000) have been felt in the manufacturing, construction and mining sectors. Agriculture and services account for the balance.
Comparative surveys reveal that, over the past 30 years, there has been little advance in remuneration in the United States. On the other hand, there has been massive job creation on a scale previously unparalleled and which puts USunemployment at its lowest levels ever. The reverse has taken place in Europe. Over the same period, Europeans enjoyed net gains in employment compensation. But virtually no new jobs were created (in fact, many were lost).
It is unarguable, therefore, that there is a trade-off between job creation and monetary rewards. And the European experience has been copied faithfully in South Africa. Here the advances in employment earnings have been dramatic – but the number of formal sector jobs available has shrunk exponentially. The knock-on effect is also critical – the number of people directly and indirectly reliant on each formal sector job is proportionately and critically much higher here than elsewhere.
A further factor in this country is that most of our key exports are no longer all that labour intensive. They are certainly heavily dependent on energy and raw materials, but are no longer so reliant on unskilled and semi-skilled labour.
And, as more and more people have lost formal jobs, they have found other means of economic activity in the informal sectors. This is not meant to lack compassion but there appears very little really “desperate” unemployment in this country (and where it exists it is readily filled by “illegals”). This process implies the development of a labour aristocracy on two levels – those employed formally and those who make do with what they can find in unregistered work.
This suggests, as the International Monetary Fund argues, that South Africa has a fairly flexible labour market, certainly by comparison with Germany whose labour laws are unusually rigid. Where the analogy breaks down, however, is in the productivity performance of the labour force, an area in which we are grossly uncompetitive.
But the single most important equation requiring solution is whether we can grow skills in the black communities faster than the skills are emigrating. Not all emigrants are white by the way – about 10% are black, and the balance is spread fairly evenly among coloureds, Indians and whites. Many experienced and dedicated coloured teachers are emigrating in droves to New Zealand and the United Kingdom – so creating a new South African tragedy.
There is now strong evidence that while the measures of inequality in general and within each racial category are increasing, measures of inequality between the races are declining. In fact, interracial inequality has been declining since 1970; the black share of disposable income then was stagnant at about 20% of the total – it is now more than 40% and growing.
This implies that while South Africa remains two nations, the distinctions are blurring rapidly. As it turns out, a growing black middle class is making it good now like never before. Conversely, the white lower class is sinking rapidly into a “poor white” syndrome reminiscent of the Twenties (which doesn’t say much for four decades of affirmative action).
And the reason for growing inequalities within racial categories is that there’s no shortage of skilled people leaving South Africa, and an abundance of unskilled people entering the country.
This leads to the second matter demanding national attention. The prime reason for the unending leak of skills is encapsulated in crime. Among white emigrants affirmative action and fears of falling tertiary education standards are cited as additional factors, but the great cause is crime, pure and simple.
If labour inflexibility and crime are two of the country’s Achilles heels, the third is the poverty of creative solutions for black education. Nor should it come as any surprise that among the most powerful blocking factors in making progress are those embedded in intransigent teachers’ trade unions.
Just as they exercise disproportionate muscle in other countries, the UK for example, so they do here. Many of their members are black teachers with modest educational qualifications (standard eight) and a short teaching diploma. Theirs are the jobs most threatened by any dramatic plan to reorganise and rescue black education.
It is in this education portfolio that Kadar Asmal has been handed what will be his sternest test – in a ministry which, of all of them, should be the least susceptible to argument for purely party political gain.
These three areas – labour inflexibility, crime and education – are those which will arbitrate on our economic well-being, on South Africa’s common wealth. No amount of short-term smart money advice will get us over the impact these issues – and how they are handled – will exercise on all our lives.