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JOBLESS: A usual sighting on South African roads.

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THE DA's campaign for a youth wage subsidy compounds the unemployment problem in that it requires taxpayers' money, which will destroy jobs elsewhere.

Cosatu, on the other hand, pursues its main objective of protecting the 2million fortunate workers in jobs at the expense of more than 7million who are unemployed. The debate has turned needlessly vitriolic and violent.

There is an alternative but nobody is listening.

It is crisis time in South Africa.

When 7.7million of a total potential workforce of 21.2million are without work and have little hope of obtaining any, when almost one-third of the potential workforce is unemployed, the government is sitting on a ticking time bomb.

Unhappy people are complaining about a lack of service delivery and the failure to provide them with housing. Many of these complaints would disappear if only they could get jobs; any job where they could learn skills and recover their self-esteem and dignity.

Being without work and being unable to get a job, month after month, year after year, destroys the self-worth of a human being. The people know instinctively that something is badly wrong but can't understand why there is zero demand for their labour.

Government policies aimed at addressing the problem include increased government spending to create pseudo-jobs in the government sector at taxpayers' expense.

Proponents of "make-work" programmes fail to recognise that the extra money the government takes from taxpayers to pay for such projects reduces the potential for real jobs to come into being in the productive sector of the economy. There is a better way of solving the problem without spending scarce budgetary resources.

In December 2003 the Free Market Foundation published Jobs for the Jobless, a book that contains a proposal that would lead to a massive increase in the demand for labour at minimal cost to taxpayers. The publication has since won an international award (Templeton Freedom Award for Promoting Liberty) for its potential for alleviating poverty.

Sadly this groundbreaking idea has not been implemented, or even put to the test in SA, thought we now have a jobless rate of 36.6% when discouraged job seekers are included.

Jobs for the Jobless proposes that people who have been unemployed for six months or longer should be entitled to a job seekers' exemption certificate, which would grant them exemption from all labour laws for two years and protect any employer who hires them from prosecution under the labour laws.

The exemption would place decision-making entirely in the hands of the job seeker - allowing certificate holders to contract with employers on whatever conditions and wages the job seekers find acceptable.

Their exemption certificates and mutually agreed written contracts would provide evidence that their employers are acting within the law. No fear of being hauled before the CCMA or the Labour Court.

Being free to negotiate, the unemployed would be able to exercise their right to work and legally accept employment at terms mutually agreed on with the employer, and with more flexible employment conditions (such as longer working hours or less rigid employment termination procedures) than those mandated by the labour laws.

They would have the opportunity to acquire skills and build up an employment history. This does not mean that these individuals are unprotected in the workplace.

While they might be relinquishing statutory protections, they would still have all the protections against abuse that are afforded by common law. But why create a two-tier system, where some workers remain subject to labour laws and others not? Why not simply allow freedom of contract between all employers and all employees? Because neither the government nor the unions would agree to this.

Most countries have sacrificed contractual freedom in labour markets in favour of job security. SA has embraced the developed world trend and seems unlikely to make fundamental changes to its laws. The solution offered here is one that will disturb the existing labour dispensation as little as possible, yet allow a massive number of real jobs to be created.

It would defuse the unemployment bomb. It would radically reduce the number of men and women who are forced into resorting to crime or the shame of prostitution out of desperation as the only means of maintaining themselves and their children.

If the 7.7million jobless were each earning R1000 per month, they would annually take home R92.4bn to support their families. Low-paid jobs with long hours might not be regarded as "decent" work but they would be better than what SA's jobless have to do to stay alive. Once they have their feet on the employment ladder they can demonstrate their abilities and steadily increase their pay.

The fundamental solution to the problem is to increase the demand for labour in the private sector, especially in small and medium-size firms (SMEs). Two-thirds of all jobs in the European Union, and almost 50% in the US are in SMEs that have fewer than 250 employees. If we use the same classification of small firms as the EU, employment in SA's SME sector is more than 50%. But why is the labour market not growing? Why are employers not hiring our 7.7 million unemployed job seekers?

Because they estimate that the total cost of employing the unemployed, including labour law compliance costs, is greater than the value of their productive work.

Under SA labour law today, the risk of employing long-term unemployed people includes the possibility of having to face the CCMA or Labour Court over termination disputes, should they prove to be totally unsuitable for the job.

Long-term unemployment generally involves low skills, poor work habits, potential discipline problems and no track record - not an attractive prospect for an employer. The potential disruptive risk is just too great for the average small employer or householder to take.

Small employers do not have human resources departments to deal with the complexities of the labour laws. They respond to the hazards of falling foul of our labour laws by refraining from taking on risky new recruits - the 7million people who desperately need jobs.

If the government would give the long-term jobless the power to eliminate the risk by exempting them from the laws that deter employers from employing them, their lives would improve significantly.

The government's compassion for the unemployed is misdirected when it sets excessively high employment standards for employers. Millions are rendered unemployed and unemployable, especially if they are unskilled, old, young, without experience, or have no recent employment records.

• Davie is a director of the Free Market Foundation and author of the book Jobs for the Jobless

Comments

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Wed May 22 00:31:29 SAST 2013 ::

May 29, 2012

tpaz

I disagree, the exemption certificates will lead to exploitation.

The issue is not that the 7.7milion are not employable nor are they demanding huge wages or office jobs but the is no production- the is no one who can employ them.

My solution, is there are protest of service delivery.....Govt should contact -----food for work schemes for these people- to build roads in their local areas and not use the public works dept.

The youth should go for YOUTH SERVICE.....on govt projects.....

The private sector is a free market, the lessor the controls the better.

Labour Laws are there to protect us.
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May 29, 2012

Mamamedium

I agree fully with this concept, the employee and employer will reach a salary agreement that is one, two the employee will be acquiring experience instead of volunteering and not being paid or paid what the company wants to pay, three should he/she feels that he has gained enough experience, he can start looking for better oportinuties. We cannot always expect handouts, it is like a parent who tells his son that " I am working for you all this will be yours when I die" the son decides why should i go to school or work when i am already rich. We cannot expect someone to work for food only, we all have other needs other than eating. or working for the gvnmnt for nothing, we need to work and get paid
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May 29, 2012

SED

CCMA is as corrupt as SAPS. They also accept brown envelopes from Labaour Brokers to Exploit labour.

Yah BAHOLI ba sleg ne!!!! they want to implement before planning. They must start by Removing Labour Brokers if they mean business..

Anyway, this is structural problem and needs structural solution. This is just microwave solution.

Bona, we are talking about involuntary unemployment here. The reason why people are not working is not the LOW WAGE that companies are offering, but unavailability of vacant positions. Are they saying Private sector can absorb 7.7 million people if they introduce subsidy?

BUSA indicated that there is a possibility of deviation from intended agenda if this is not planned well.

Where are the academics?
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May 30, 2012

molefelives

@Eustace Davie
It would seem you do not have explotative history of employer employee in South Africa.
I read an investigative story a juno from The Herald of the Great Chicken Expose, whereby nearly no Labour Laws in RSA are adhered to.
Your idea is not far from that of Labour Brokering.
Our problem is the means of production are still in the wrong hands and could simply be the strategy to undermine the ruling party by reducing productivity and job opportunities.
However, the government finds itself in this circle because of Tripatite Alliance. Government should think for itself.
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May 31, 2012

KEHLHA

Can't you see that the article says the unemployed must be given exemption so that they can decide for themselves about employment. If they don't want exemption, they don't apply and they avoid the terrible danger of being EXPLOITED. Do you think the unemployed are stupid, that they can't make up their own minds whether to take a job or to stay in a job if they are treated badly. What is much worse than being exploited is if you can't find somebody who wants to exploit you. Getting our freedom in 1994 was supposed to mean freedom to make up our own minds, not to follow blindly what others tell us what we must do or can't do for ourselves.
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