A priority in South African policy is the creation of “decent jobs”. With an unemployment rate of close to 25% (or closer to 40% depending on how you count), can we as a country afford to focus on “decent jobs”, rather than just plain jobs?
In a recent blog Professor Teal, from Oxford University, he argues that “it is the creation of these kinds of jobs which increases poverty, precisely because such jobs are so scarce”.
Teal attributes the rapid decrease in poverty in Ghana over the past two decades to a dramatic increase in employment, especially in low paying jobs in small firms. He contrasts this with the dual labour market in South Africa where the few who are lucky enough to be permanently employed earn well.
Research in South Africa suggests fact that “decent jobs” would come at a cost of fewer jobs. For example, in a recent paper, Bhorat et al find a significant reduction in employment figures in the agricultural sector in South Africa, due to an increase in the minimum wage.
The poorest in South Africa are those without permanent employment. So, if we as a society care most about the poorest shouldn't the priority be to get more into the formal labour market?
The issue, of course, is that the South African labour market is fundamentally different to other sub-Saharan African countries. We have a highly developed economy floating in a (much larger) underdeveloped economy. This has two implications. First, some people are earning exceptionally well. Large wage disparities breed discontent. Relative deprivation matters for well-being. So, even if the creation of “bad jobs” will do more to alleviate poverty in South Africa, it might not be politically feasible in a highly unequal society. Second, there are more opportunities for “decent jobs” in South Africa, compared to other sub-Saharan African countries. The business community complains of a massive skills shortage. So, if only our education system could improve, then maybe there would be no need to legislate “decent jobs”.
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