Nicholas Woode-Smith: Public sector workers drain South Africa dry

South Africa's public sector is burdened by bloat, inefficiency, and escalating wage demands, with salaries outpacing economic growth. Parliament cleaners are set to earn more than teachers by 2026, highlighting a system skewed by union pressure and political compromise. With the public wage bill now at 10.4% of GDP, this unsustainable trend drains the fiscus and stifles essential services like education. True reform requires cutting bloat, curbing unions, and fostering private sector growth..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here. .BY Nicholas Woode-Smith*.While there are doubtlessly important and crucial people employed by the government, the public sector has become synonymous with incompetence, bloat, corruption and entitlement. Recently, full-time staff at Parliament, including cleaners, can expect to earn R350,000 a year by 2026. Double their current salaries..This comes after trade unions rejected a 3% pay rise. Their initial demand being 12%. Despite Finance Minister Enoch Godongwana's insistence on shrinking the public sector wage bill, government worker salaries continue to skyrocket – becoming a huge drain on the fiscus. This will see parliament cleaners being paid more than teachers..Over the last thirty years, the public sector wage bill has increased from 5.6% of GDP (1994/1995) to 10.4% of GDP (2023/2024)..The average public sector worker earns (R41,200) almost double that of the average salary (R26,800). Their jobs are also usually protected from scrutiny, and it is very hard to fire them for incompetence or even corruption..Unions keep demanding more and more extravagant salaries for their members, leveraging political power and intimidation to get what they want. But while unions will fight tooth and nail to get more and more money for their due paying members, they aren't concerned with reality, or non-members..Trade unions have often pushed for legislation and regulations that have directly caused unemployment. But in the public sector, they continue to guarantee that the budget is unsustainable and that importance government projects like law enforcement and education are underfunded..Read more: SA's shocking skills shortage crisis and Visa red tape strangle economic growth, jobs, and investor confidence.Public sector workers also seldom face any real competition to incentivise good work. Their jobs are very secure, and the only real threat to if they get paid or not is if their superior is too corrupt or incompetent to remember to pay them. The success of their work does not really factor into if they are rewarded are not. Their income will just keep going up, at the expense of the taxpayer..The government has often touted public sector employment as a solution to unemployment, but public sector workers are more expensive, less qualified, less competent and just downright worse than their private sector alternatives..Private sector jobs have meritocracy baked in. If you don't perform well at your job, you don't get a raise. You don't promoted. And if labour regulations were more logical, you'd get fired. While the public sector rewards union membership, crony relationships and merely existing, the private sector rewards hard work and skill..But most importantly, private sector jobs don't cost tax money. They generate tax money. Every public sector worker is a drain on a dwindling tax base. While every private sector job positively contributes to the fiscus..The solution to unemployment therefore cannot be to increase the number of public sector jobs. In actual fact, more jobs could theoretically be created by cutting the bloat and removing public sector jobs. The extravagant and redundant public sector jobs drain tax money. With lower taxes, businesses could afford to hire more workers. The economy would grow, generating more tax money, leading to increased infrastructural development, leading to more economic growth..If the government is serious about balancing the budget, it needs to rein in the trade unions and start retrenching the bloat. Parliament shouldn't be hiring its own cleaners anyway. It should be outsourcing that function to a private company, tendered through an open and transparent tendering process that prioritises cost-cutting..And if the government is serious about ending unemployment, it needs to deregulate the labour market. It must become easy to hire and fire, so businesses can take a risk on hiring young and new staff. Legislation needs to be business friendly, so more businesses can create jobs..That's how we grow the economy. That's how we improve South Africa..Read also:.Government prods the union bear – public sector strike looming?How world sees us: Only thing keeping SA from total chaos is its private sectorSA government leaves private health sector in the dark.*Nicholas Woode-Smith is an economic historian, political analyst and author of over twenty books. He is a Senior Associate of the Free Market Foundation and writes in his personal capacity.

Nicholas Woode-Smith: Public sector workers drain South Africa dry

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