SA needs wage flexibility in its bid to create jobs
Creation of lower wage employment for unskilled people will not threaten higher paid jobs, write Nicoli Nattrass and Jeremy Seekings
SA’s extremely high unemployment means inclusive development is impossible without labour-intensive growth. When nearly two adults in five are unemployed, the expansion of jobs, even at relatively low wages, reduces poverty and inequality. SA’s development strategy rests on the false hope that an increasingly skill- and capital-intensive economy can generate such high growth that unemployment falls. In fact, the economy has grown by less than 3% per year since 1994 and growth is generating fewer and fewer new jobs. It is time to change direction. This means learning from the experience of the many countries that have industrialised through labour-intensive manufacturing. In China, production for export generated 5.5-million clothing jobs by the mid-2000s. Bangladesh grew the number of clothing jobs from 1-million in the mid-1990s to more than 4-million today by taking advantage of rising wages in China. The clothing industries in Cambodia, Vietnam and Burma also employ huge numbers ...
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