The labour laws implemented to reverse the exploitation of labour, as found in apartheid South Africa, had “gone too far” and was now suppressing small businesses and contributing to the country’s high unemployment rate, Free Market Foundation (FMF) chairperson Herman Mashaba said on Friday.
The labour legislation adopted post-1994 was meant to give greater rights to workers and eliminate the exploitation of particularly blacks by employers but, he noted, the current labour regulation environment was not conducive to the creation of jobs for South Africa’s 7.5-million unemployed citizens, many of whom have never held a job and was unlikely to ever have a job.
Speaking at the South African Chamber of Commerce and Industry yearly convention, in Midrand, he said lifting the burdens on small firms would allow them to flourish and create more jobs. The regulations now required revision and the barriers preventing firms from expanding their workforce should be removed.
Subsidies and incentives would not stimulate business, as companies feared hiring, owing to disruptive labour and the threat of labour disputes on a whim. He also suggested the removal of the minimum wage, as this would enhance the chances of the unemployed being able to seize the opportunity to earn at least some kind of wage, and the application of the rule of law in respect of labour disputes.
He said that it was possible to improved wages without threatening the jobs of others, citing the “havoc” created over the past few months with nationwide illegal strikes throughout many industries.
Centralised bargaining structures, as currently established in certain industries, held negative consequences for smaller firms unable to meet the minimum wages set by the unions and resulted in the closure of businesses, further job losses and no wages at all, Mashaba stressed.
He pointed to South Africa’s low ratings in most of the labour categories of the Fraser Institute's 'Economic Freedom of the World: 2012 Annual Report'. South Africa ranked 85 out of 144 countries.
Meanwhile, Mashada criticised the country’s education system and questioned the delivery of sustainable and valuable educational outcomes, considering that 20%, or R270-billion of the fiscus went to education-related development in 2012/13.
Letsema Circle executive chairperson Dr Mamphela Ramphele noted that the education system was sliding further into crisis, and the need to move away from a system that provided one graduate out of every student class enrolled in a school.
“We have a narrow window of opportunity and we will not have the luxury of an Arab spring but are instead headed towards a searing African summer,” she said.