Labour+Laws+Alone+do+not+kill+jobs,+Alide+Dasnois



=Labour Laws Alone do not kill jobs=

Business Report, Johannesburg, July 4, 2005

 * Alide Dasnois**

In an article published in Business Report last Friday, the minister of labour, Membathisi Mdladlana, makes a point worth remembering as the debate on labour market "flexibility" hots up.

Employers have long called for more "flexibility" or labour market "reform" (read: a weakening of the post-1994 labour laws to make it easier to fire workers and to pay them less than the negotiated minimum wage). Their arguments have been given a new legitimacy in documents tabled for discussion at the ANC's National General Council meeting at the weekend, which propose a dual labour market with special exemptions for employers of young workers, employers in certain areas and employers in vulnerable industries, in a bid to boost employment.

It's a mistake, Mdladlana points out, to think that more labour market flexibility automatically means more efficiency. Efficiency is often - usually? - a management responsibility.

"Calls for greater flexibility generally create the impression that management is performing optimally and it is labour rights and workers that are entirely to blame for inefficiency," he notes. "Flexibility should not be a solution for poor management."

Not that the minister is totally opposed to the notion of making life easier for employers. His suggestions about how to do this, though, do not include exemptions from minimum wages.

In a frank review of some of the problems in his department, he notes that its work seekers' data base is not being used efficiently; that the sectoral training authorities could be more helpful to employers, especially small businesses; that the role of the Unemployment Insurance Fund needs reconsidering; and that the Commission for Conciliation Mediation and Arbitration could function differently so that employers are spared some cost and inconvenience.

Mdladlana's insistence that the problem of unemployment cannot be tackled with labour market strategies alone echoes points made in a paper by Wits researchers Edward Webster and Andries Bezuidenhout, published by the Centre for Policy Studies. "Treating the labour market as the sole cause for high levels of unemployment ... is an unproductive approach to social policy," they argue: the notion of labour market rigidity is "a red herring".

The causes of the rise in unemployment should rather be sought, they suggest, in population growth, the accelerated entry of women into the jobs market, and shortages of skills, on one hand, and, on the other, in job losses in industries such as footwear, clothing and mining.

In any case, the dual labour market already exists, the researchers argue, pointing to "shell" wage agreements "where labour wins high standards on paper that apply to fewer and fewer workers in reality" - but it has not led to an expansion of employment.

Cosatu economist Neva Makgetla makes the same point. She argues that there is no evidence that the current system imposes excessive costs on employers.

If the labour laws were truly a hindrance to job creation, the sectors where these laws have the least impact - domestic, farm and informal work - would have shown the most rapid growth in employment, she says. "In fact, the opposite is true."

And far from imposing unaffordable wages on small and rural businesses, Makgetla notes, the current system of minimum wage bargaining applies to fewer than 20 percent of workers in the private sector; more than 80 percent of applications for exemption by small businesses are granted; and different wage rates are already set for different regions.


 * From: http://www.busrep.co.za/index.php?fSectionId=553&fArticleId=2610610