/ 1 March 2009

Without rhyme but with reason

It seems there is merit in the Congress of the People’s (Cope) mumbling on affirmative action (AA). The review of AA should be informed by the shortage of critical skills, growth of an uncompetitive black labour force, as well as the country’s ever-modernising and globalising economy.

According to the Reserve Bank’s Quarterly Bulletin (2008), since 1996, exports of goods and services grew more than sixfold between 1994 and 2007, from R27 092-million to R170 861-million (in 2008 prices). There has also been a significant increase of employment in these sectors and a decline in the traditional sectors.

The Quarterly Labour Force Survey (Stats SA) for the third quarter of 2008 recorded the trade industry as the largest employer, with 23.3% of total employment, and this has been increasing. There has been a decline of employment in community and social services, manufacturing and mining. The decrease of employment in these sectors also explains the large number of job-losers, who account for 30.8% of the total 4.1-million unemployed. Africans constitute 27% of this total, followed by coloureds at 19.2%, whereas Asians stand at 11.7% and whites record 4.1%. These racial disparities in the labour force could be attributed to the apartheid legacy. In 1995 the South African labour market emerged with a significant entrepreneurial class that was mainly white and Asian.

The 1995 October Household Survey reveals that about 44% of Africans were in elementary occupations (cleaning, garbage collection and agricultural labour), 50% in intermediary (semi-professional, technical, clerks, sales and services, artisan and assembly), with only 3% each in managerial and professional jobs. The white working population in elementary jobs was less than 2%, about 80% in intermediary, with 13% and 8% in managerial and professional occupations, respectively. The same figures for Indians stood at 6% in elementary occupation, 78% in intermediary and 9% and 7% in managerial and occupation respectively.

Coloureds recorded 55% in elementary, 40% in intermediary and 2% each in managerial and professional occupations.

Nonetheless, scarce skills and a critical shortages of skills seem to haunt the democratic labour market by presenting mostly white, modern, competitive human capital over a generally black, unskilled traditional labour.

The AA became a tool to redress labour market imbalances. But the black labour force is characterised by absolute scarcity of skills, in which there is limited skilled human capital, a shortage thereof or disequilibrium in supply and demand.
The white competitive modern human capital has become a relatively scarce capital in the South African labour market; it might be available but does not meet the employment criteria. The 500 000 vacancies that are available and unfilled directly explain relative scarce skills and critical skills shortage.

The majority of AA beneficiaries do not have the skills required by the modern sector. In some instances their qualifications do not meet the needs of the modern economic sector.

The aforementioned points are a bone of contention in the skills shortage debate and an argument for another day. Moreover, population growth seems to frustrate the AA. The well-intended child grants result in population growth because some teenagers become pregnant to get income and disregard their future and the cost of raising children. As a result, of the total unemployed, 42.3% are the new entrants into the labour market. Furthermore, availability of skilled human capital is one aspect of infrastructure that attracts investors to any country.

Clearly, there is a need to balance the objectives of AA with market needs as well as curtailing the growth of an uncompetitive labour force and availing the non-AA skilled human capital.

Perhaps this is the thinking that prompted Cope’s mumbling on AA policy.

Dr Zoleka Ndayi is a lecturer in the department of international relations at the University of the Witwatersrand