A series of essays taking an account of the milestones of South African democracy in order to give a multidimensional perspective of South Africa.
The death of Nelson Mandela on 5 December 2013 was in a sense a wake-up call for South Africans, and a time to reflect on what has been achieved since 'those magnificent days in late April 1994' (as the editors of this volume put it) 'when South Africans of all colours voted for the first time in a democratic election'. In a time of recall and reflection it is important to take account, not only of the dramatic events that grip the headlines, but also of other signposts that indicate the shape and characteristics of a society. The New South African Review looks, every year, at some of these signposts, and the essays in this fourth volume of the series again examine and analyse a broad spectrum of issues affecting the country. They tackle topics as diverse as the state of organised labour; food retailing; electricity generation; access to information; civil courage; the school system; and - looking outside the country to its place in the world - South Africa's relationships with north-east Asia, with Israel and with its neighbours in the southern African region. Taken together, these essays give a multidimensional perspective on South Africa's democracy as it turns twenty, and will be of interest to general readers while being particularly useful to students and researchers.
About the Author
Devan Pillay is an Associate Professor in the Department of Sociology at the University of the Witwatersrand, Johannesburg.
Gilbert M Khadiagala is the Jan Smuts Professor of International Relations at the University of the Witwatersrand, Johannesburg.
Prishani Naidoo is Senior Lecturer in the Department of Sociology at the University of the Witwatersrand, Johannesburg.
Roger Southall is the Professor Emeritus in the Department of Sociology at the University of the Witwatersrand, Johannesburg.
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New South African Review 4
A Fragile Democracy â" Twenty Years on
By Gilbert M Khadiagala, Prishani Naidoo, Devan Pillay, Roger Southall
Wits University PressCopyright © 2014 Wits University Press
All rights reserved.
The South African labour market after eighteen years: It's class struggle, stupid!
Nicolas Pons-Vignon and Miriam Di Paola
The liberation from apartheid generated great expectations of change in the workplace and the labour market (Pons-Vignon and Anseeuw 2009). This was due to the key role of trade unions – both as a political force and through successful undermining of the racist order which had been established in workplaces – in overthrowing the system of minority rule, (Von Holdt 2003). Apartheid geography had ensured the racial separation of dwellings. Encounters (often brutal) between people considered to belong to different racial groups took place, mostly in what Marx calls 'the hidden abode of production'. The history of 'forcible commodification' (Bernstein 1994) of southern African peasants into wage labourers, one of extreme violence, was followed by the imposition of a migrant labour system and of colour bars (limiting the promotion of blacks) across workplaces, with the active support of the state and capital. In the absence of alternative sources of income, wage employment came to occupy a central place in the daily life (or reproduction, in Marxist parlance) of most South Africans; but with a record-breaking unemployment rate (standing close to 40 per cent), more and more research points to the restoration of employer power post-1994 through the widespread use of outsourcing and an explosion in casual and informal employment (Buhlungu and Bezuidenhout 2008; Pons-Vignon, forthcoming; Von Holdt and Webster 2005). The economically liberating stable employment to which most South Africans aspire has therefore not materialised but remains the overarching objective of progressive forces in which unions continue to play a leading role (Barchiesi 2011).
And yet, reading the media or the reports produced by the International Monetary Fund (IMF), one could believe that the South African government has yielded to the dreaded sirens of populism, at least in the labour market. Rigid rules have allegedly been established, killing flexibility by over-protecting workers who are poorly skilled and over-unionised; a deadly mix which lies at the root of high unemployment and poverty (Klein 2012). Such arguments follow the South African (neo)liberal tradition (Knight 1982; Hofmeyr and Lucas 2001; Kingdon and Knight 2007) according to which the key to unlocking growth and reducing poverty in South Africa would be to reform the labour market (making it 'flexible') and equip poor people with useful skills. Similar arguments were used in the early 1990s to dismiss the report of the Macro-Economic Research Group (MERG, see Freund, forthcoming), and debunked by Sender (1994) who exposed their weakness. The new claims associated with this neoliberal perspective on the labour market suffer from serious empirical limitations, whether in attempts to point to 'high' wages as the cause of unemployment (Forslund 2013; Strauss 2013), or to claim that South Africa's labour market is rigid (Bhorat and Cheadle 2007). This position is, however, reflected in sections of government, notably the National Treasury, which champions a 'youth subsidy' ensuring a transfer of taxpayer money to employers to facilitate the creation of casual jobs, and in the recently endorsed National Development Plan (NDP).
Such a perspective corresponds to a residual view of poverty (Oya 2009), according to which poverty alleviation requires a combination of free markets and improved human capital, and meaning that the poor ought to be equipped with what they lack, whether it is education or capital. The intrinsic inconsistency of such an approach has been captured by Amsden (2010) when she noted that Say's law (supply creates demand) does not hold: increasing the supply of skilled workers will not alone generate sufficient appropriate jobs for them. Moreover, and crucially, the flawed characterisation of the South African labour market as 'rigid' has diverted attention away from a more grounded assessment of its performance. This chapter thus offers a critical review of post-apartheid labour market restructuring, showing that it has not failed for lack of flexibility, but rather because it has not protected poor workers. The changes which have taken place in the labour market have indeed reproduced, rather than challenged, the unequal relationship between capital and labour.
THE DISMAL PERFORMANCE OF THE POST-APARTHEID LABOUR MARKET
The new democratic regime carried expectations for millions of South Africans to find good jobs, with some security as well as wages and benefits, allowing them to live decently. Most of them have been disappointed. Because jobs are the main source of direct and indirect income for most South Africans, high unemployment and growing casualisation have made their reproduction extremely difficult.
Unemployment: Discouraging and structural
Unemployment in South Africa is amongst the highest in the world and represents the most significant expression of the country's deep and lingering socioeconomic crisis. According to the Quarterly Labour Force Survey for January to March 2013 (StatsSa 2013), the official unemployment rate stands at 25.2 per cent; this figure climbs to 36.7 per cent if discouraged jobseekers are included. Unemployment still bears an unceremonious racial stamp with the black population being the most affected (28.8 per cent in the first quarter of 2013), closely followed by the coloured population, while white unemployment stood at only 7.2 per cent.
While government's 'official' rate (excluding discouraged job-seekers) downplays the extent of the unemployment crisis, the 'expanded' rate appears to be a better reflection of the situation of the labour market. Indeed, the reason for excluding discouraged job-seekers from the unemployed is that they are allegedly less motivated (therefore less likely) to find work. While this may be true in certain countries, recent research shows that in South Africa 'there is little to distinguish the searchers from the non-searchers in terms of their commitment to finding work' (Posel et al. 2013). As a result, 'the non-searching unemployed form a legitimate part of the labour force and their exclusion from the official rate should be reconsidered'. As shown in Figure 1, the 'strict' or narrow rate has entailed a substantial underestimation of the number of unemployed people. Yet, even when only active job searchers were considered, the incidence of long-term unemployment in South Africa stood at close to 70 per cent of total unemployment in 2011 – meaning that two-thirds of those officially unemployed had been so for a year or more (OECD 2011). As a result, 59 per cent of the unemployed had never been in employment in 2008 (Leibbrandt et al. 2010).
In spite of the depth of the unemployment problem in South Africa, many economists have sought to explain it as an abnormality rather than engage with the dynamics that (re)produce it. This started in the early 2000s, with Bhorat emphasising 'the simultaneous existence of a skilled labour shortage and unskilled labour surplus' (2004: 976) to argue that skills development would be the key to reducing unemployment. This argument was profoundly flawed for, as pointed out by Makgetla and Van Meelis (2003): 'Even if more jobs were created for skilled than for unskilled people, it does not follow that increasing skill levels would in turn generate more jobs.' In the following years, drawing on dual labour market theories (which posit that there are two distinct labour markets, a formal and an informal), some economists have argued that 'insider' formal workers were forcing many 'outsiders' to either remain unemployed or to work informally (Kingdon and Knight 2007). Informal employment in South Africa is very low, however, especially by comparison with other African or middle-income countries, and much of its growth has been related to the informalisation of work rather than to new opportunities in the informal economy. Why can't informal activities 'soak up' more of the excess labour in South Africa? Valodia (2013) suggests that:
Unlike most developing countries where small-scale, informal producers are able to capture a significant proportion of domestic consumption, the South African economy is dominated by large-scale, monopolistic producers with reach deep into the consumption basket of the South Africans of all income classes. Even in the most remote, rural and low-income communities, the basic consumption basket is dominated by goods produced in the formal economy, with very little – if any – capacity for local, informal producers to capture a sizeable proportion of local demand.
It is furthermore important to discard the notion that unemployment is high because informal wage employment is not captured by labour statistics; if anything, informal sector (especially self) employment is exaggerated by the Quarterly Labour Force Survey (Pons-Vignon, forthcoming). Following Pollin et al. (2006), our contention is that South Africa's unemployment is a product of its structural economic features, with the three immediate reasons accounting for the very high unemployment rates being historically high unemployment, sluggish growth, and declining labour intensity of growth. Growth has overall been sluggish in South Africa since the late 1960s, with the exception of the period 2003 to 2007. Mohamed (2010) argues however that economic growth, during the latter period, far from being associated with long-term investment in the real economy, was linked to increased debt-driven consumption and speculation in financial and real estate markets and much of the growth in services employment was related to the outsourcing of low-pay services from manufacturing, in particular cleaning and security (Tregenna 2008). While the official unemployment rate had slowly declined during the 2000s, unemployment went up again after the economy recorded a million job losses in the wake of the global crisis. Last but not least, the continued dominance of sectors associated with the minerals-energy complex means that the most dynamic sectors are capital- rather than labour-intensive, with limited capacity to increase employment significantly even when they grow (Ashman et al. 2011). These structural features suggest that it will be necessary to change fundamentally the economic structure in order to tackle unemployment and poverty.
Largely ignoring these structural dynamics, debates about unemployment in South Africa have been dominated by calls for more labour market flexibility as the sustained unemployment crisis means that the national focus is primarily on job creation, often couched in 'any job is better than no job' terms. However, Bhorat and Cheadle (2007) have shown that the South African labour market was not rigid at all when compared to that of other countries:
Classified as an upper-middle income country, the comparisons across the regulatory indices are surprising. In the first instance, it is evident that South Africa's measures of labour regulation compare quite favourably with those found in the rest of the world. In almost all of the individual regulatory sub-indices, South Africa yields a level of regulation that is lower than both the mean for upper-middle income countries, and for the sample of countries as a whole. For example, in the case of alternative employment contracts – the legislative regime governing part-time work, contractual employment and so on – South Africa yields an extremely low measure of labour regulation.
It is furthermore evident that if the roots of unemployment are structural, they cannot be reduced to a mere 'frictional' dimension related to a neoclassical understanding of the labour market as the place where supply and demand for labour meet. The focus on an imaginary 'rigid' labour market (and elusive 'overpaid' unskilled workers) is therefore little more than a diversion from a serious engagement with unemployment. It is all the more so that the South African labour market is in fact extremely flexible (and probably too flexible). Employers can do pretty much whatever they please in practice.
Casualisation: When no job is better than many jobs
The quality of jobs in South Africa has declined dramatically over the past twenty years. The implication is that working poverty, which was a structural feature of segregation and apartheid (Wolpe 1972), has all but disappeared. Many South Africans work long hours, but for miserable pay and in insecure, often hazardous conditions. Is any job really better than no job?
Non-standard forms of employment are increasingly common throughout the South African labour market, in line with the global restructuring of work which has led, through a great diversification of employment arrangements, to widespread precariousness. Contrary to what is often assumed, this is not restricted to the 'margins' of the labour market, but is increasingly a feature of its core (Chang 2009). In South Africa, restructuring started ahead of the transition to democracy and has since become a wideranging phenomenon in sectors as diverse as healthcare, mining and forestry (see Pons-Vignon and Anseeuw 2009; and Von Holdt and Webster 2005 for a broad range of case studies). In mining in 2008, one out of three workers was employed by a contractor or a sub-contractor (Bezuidenhout 2008), a figure which has probably increased in the wake of the 2012 violence across platinum and other mines. The forms taken by work-restructuring have been varied, and include the growth of third-party employers such as labour brokers and contractors, alongside a sharp rise in casualisation, documented in a vast range of sectoral case studies but poorly captured by labour force surveys (for a methodological discussion, see Sender and Pontara, 2010). Casualisation, for instance, entails work arrangements such as homework (Godfrey et al. 2005) or the hiring of gangs of workers by the day to perform certain tasks. With a few exceptions, for instance in transport (Barrett 2003) or metals and engineering, trade unions have not been able to counter employer strategies and prevent casualisation.
Labour casualisation has entailed a marked deterioration in levels of pay and security. In terms of pay, this is visible in the consistently low wages received by workers covered by sectoral determinations (see section 2), two-thirds of whom were classified as 'poor' in 2007 – with an increase in the number of poor workers in certain sectors since the adoption of a determination (DPRU 2010). In terms of employment security, out of a workforce of 13 million in 2008, 5.8 million workers were not covered by unemployment insurance; 2.7 million did not have written contracts; and 4.1 million did not have paid leave entitlements (Marais 2011). Workers have suffered most where employers have adopted task-based payment, which often leads workers to super-exploit themselves to meet unrealistic production targets (Pons-Vignon, forthcoming).
It is therefore unsurprising that the problems associated with the labour market have contributed to a sharp crisis of reproduction experienced by many poor people in South Africa.
Excerpted from New South African Review 4 by Gilbert M Khadiagala, Prishani Naidoo, Devan Pillay, Roger Southall. Copyright © 2014 Wits University Press. Excerpted by permission of Wits University Press.
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Table of Contents
INTRODUCTION: South Africa's fragile democracy: Twenty years on, 1,
PART ONE: ECOLOGY, ECONOMY AND LABOUR, 17,
CHAPTER 1: The South African labour market after eighteen years: It's class struggle, stupid!, 21,
CHAPTER 2: The state of organised labour: Still living like there's no tomorrow, 39,
CHAPTER 3: Citizen Wal-Mart? South African food retailing and selling development, 56,
CHAPTER 4: Transcending South Africa's oil dependency, 74,
CHAPTER 5: The politics of electricity generation in South Africa, 91,
PART TWO: POWER, POLITICS AND PARTICIPATION, 109,
CHAPTER 6: Platinum, poverty and princes in post-apartheid South Africa: New laws, old repertoires, 113,
CHAPTER 7: amaDiba moment: How civil courage confronted state and corporate collusion, 136,
CHAPTER 8: Secrecy and power in South Africa, 150,
CHAPTER 9: The contemporary relevance of Black Consciousness in South Africa, 167,
CHAPTER 10: Death and the modern black lesbian, 182,
PART THREE: PUBLIC POLICY AND SOCIAL PRACTICE, 197,
CHAPTER 11: Why does Zimbabwe's school system out-perform South Africa's?, 204,
CHAPTER 12: Higher Education in 2013: At many crossroads, 223,
CHAPTER 13: Democracy without economic emancipation: Household relations and policy in South Africa, 238,
CHAPTER 14: Prisons, the law and overcrowding, 256,
PART FOUR: SOUTH AFRICA AT LARGE, 271,
CHAPTER 15: South Africa in Africa: Groping for leadership and muddling through, 275,
CHAPTER 16: South Africa and Israel: From alliance to estrangement, 290,
CHAPTER 17: South Africa's economic ties with north-east Asia, 306,
CHAPTER 18: Regional parastatals within South Africa's system of accumulation, 332,
CHAPTER 19: The leadership challenge in Southern Africa, 349,