South Africa’s job crisis: Skills, policy, and opportunity in peril - Garth Zietsman

Key topics:

• SA’s high unemployment worsened by weak skills and poor education system

• Govt policies, crime, and red tape stifle business growth and job creation

• Many job seekers lack skills or willingness to add value to enterprises

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By Garth Zietsman*

ANC philosophy, and related policies and actions, are responsible for our terrible unemployment rate. South Africa (SA) has one of the world’s worst unemployment problems.

Stats SA say unemployment is over 30%. Some critics say that many of those are employed in the informal sector and that the real unemployment rate is more like 16%. It is safe to say though that many of those employed in the informal sector would prefer a job in the formal sector, and even 16% is too high. So why is it that a person looking for employment can not find any? To answer that question we must first understand why anyone would seek to employ another person.

Human enterprises – businesses, armies, NGOs, governments, schools, churches, etc – exist in order to solve the problems of meeting various human needs. The problems could be how to efficiently manufacture more tools or produce more food than small hunter-gatherer families could manage. The problem could be recording wisdom and expertise so that knowledge accumulates instead of being rediscovered every generation. It could be the coordination of many people to ward off the predations of a neighbouring group. It could be how to combat disease, provide entertainment, build decent and affordable homes or make functional and appealing clothes. Then once an enterprise exists logistic problems will need managing.

Anyone devoting their time and effort to solving the problem of meeting people’s needs will only do so if some of their needs, including the resources the enterprise needs, are met in return. Since everyone has limited means it means that all enterprises, capitalist or communist, compete for that limited support with all others. In turn any enterprise must devote all its own resources to fulfilling its chosen purpose or simply dissipate.

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The only reason any enterprise needs people at all is for the additional skills and activity necessary to meet its chosen purpose. Any person who provides neither is simply a drain on the enterprise that it can ill afford when competing for support. An enterprise cannot become a charity and provide employment for its own sake if it is to meet its purpose or survive at all.

There are two reasons business (a proxy for enterprise in general) will not employ people who want work. The first is that something inhibits business from offering solutions to consumer problems. So, becoming established or expanding is difficult.

Some policies that inhibit business are dictating what consumer needs a business may try to meet or how it may do so, making it hard to start a business, imposing onerous bureaucratic loads, taxing excessively, imposing anti-competitive rules, making property rights insecure and failing to control crime and corruption.

The SA government does all of these and more. In general, anything that makes it not worthwhile to attempt meeting the needs of consumers must lead to a lower demand for employees.

The second reason business is not employing people is that they regard applicants as unlikely to contribute to solving the problems of the enterprise. Frequently they believe it likely that the applicant will actively harm the business. It simply is not worth their while to employ most job applicants. Business in SA has said that the people seeking employment typically do not have the skills to do anything beyond basic physical labour. The reason why they do not have skills is because government education efforts have failed to impart skills for over a generation. Ironically this is yet another illustration of what happens when you forget what an enterprise was meant to do and ask it to do other things – like simply give income to teachers.  Now government is trying to take control of and undermine the education efforts that do work.

Many of those who do have skills have a sense of entitlement to the income or the status of the job without having to contribute to the enterprise at all. Management will spend their time upgrading their offices rather than actually managing anything. One bit of evidence for this sense of entitlement is the attitude that immigrants are taking ‘their’ jobs.

Many of those who feel entitled will undo work already done or otherwise sabotage the enterprise if asked to do any productive work. They also frequently mount various forms of protest that cause chaos in the organisation. Government is the primary force stoking this sense of entitlement. The ANC (current and former) seems to have a cargo cult (Google it) view of the economy as something that falls from heaven.

They believe business, instead of creating it, has somehow unfairly captured the heavenly mana and the only real issue now is ‘equitable’ distribution. They will have none of the “ask not what your country can do for you but what you can do for your country” by the likes of JF Kennedy, or even Stalin. Then there are some employees are simply there to steal from the enterprise or those who are hostile to clients and consumers.  

Finally, our labour laws make dismissal, or performance-based pay systems, difficult. Business cannot risk being lumped with problem employees, so they prefer not to hire them in the first place.

Business in SA is not employing people because government policy makes expansion and survival difficult and ownership and control of the enterprise insecure. Also, business cannot employ applicants who do not have the skills or willingness to contribute to the tasks that need doing.

*Garth Zietsman is a professional statistician with 40 years’ experience applying his skills to social, medical and economic issues. He has written on wide-ranging topics, from tax policy to health spending to global warming, and has a blog called Freakostats. In 2001, Zietsman was described in the media as the World's Smartest Man on the strength of his performance in a high-level IQ test in which he was bettered only by Marilyn vos Savant, listed in the Guiness Book of Records as having the highest recorded IQ.

This article was first published by Daily Friend and is republished with permission