'We should be concerned...'
by Trevor Gothan
2009-11-03 11:02
We should be concerned - 40% of our citizens live in grinding poverty. They are unemployed, or unemployable, due to lack of jobs or skills appropriate to our economy. Education is long term, so job creation is an immediate priority. The government says it is trying, but recession doesn't help. What are the realities?
A growing economy provides more jobs, albeit restricted by skills shortages, crime hurting investment, etc, all topics hotly debated. However, the critical basis for a strong economy is a free and competitive market, which is rarely mentioned.
Is our market free enough? Is it one "without economic intervention and regulation by government except... against force or fraud" which "requires protection of property rights, but no regulation, no subsidization, no single monetary system, and no governmental monopolies." (Wikipedia)
Prosperity relies on free choices citizens make in the market, communicating their values to employers, suppliers and producers, who (if competitive) will quickly take action to cut costs, improve efficiency or redirect their resources to other, more profitable applications.
This "feedback" is continuous, automatic, instant, cheap and immensely more accurate than the occasional, biased, directives from expensive centralised economy bureaucrats.
The South African market has never really been free in so many areas. Price fixing is rampant, punishable at worst by a tap on the wrist after a few years. The only real competition is from imports. The greatest collusion of all, however, is in the labour market by monopolistic unions, fully supported and unpunished by government.
The laws of supply and demand are simple. When wages for any category of labour are increased by union blackmail, or government legislation, the supply of job seekers will rise and the available jobs will dwindle, increasing unemployment.
Some companies will close, others will find it more profitable to mechanise or outsource manufacture to China, or change to less labour intensive businesses - the opposite of what we need right now.
Cosatu, one of the culprits, also states that labour broking is unconstitutional. Our constitution gives workers the individual right to unionise, picket, etc but it is their right. They are free to join Cosatu or not unionise at all.
Imposing unionisation will certainly infringe that constitutional right. Pity is, when many of these people, who work through brokers, end up unemployed, neither Cosatu, nor the constitution will give them a second thought.
Cosatu also wants "decent" wages (whatever that may mean), for their "club"; not for the unemployed, unpaid charity volunteers, etc. Apparently their members had no idea what a decent wage was when they took the job! Are these actions, which increase unemployment, pure madness or is it a plan?
Francis Daniels, writing from Nigeria, suspects the latter. Please Google his blog "Frankly Speaking: The return of apartheid" published November 1 2009 and see what you think.
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