Apartheid-style race-based laws damaging SA’s employable future

The fact of youth unemployment is that 63 percent of the 2.4 million people aged 15 to 24 in South Africa don’t have jobs – or more worryingly have given up looking. In this piece by Herman Mashaba, he calls on the youth to become architects of their own futures. He also calls on government to remove the self-inflicted barriers to an employable future – including the harmful consequences of a minimum wage, the bargaining council and legislated discrimination. The result of an unhappy youth force has been well documented in countries like Egypt, and it is not something worth repeating. – Stuart Lowman

by Herman Mashaba*

Herman Mashaba
Herman Mashaba is Executive Chairman at Lephatsi Investments

Young people who decide to make their own way and be beholden to no one have a far better chance of being successful in their careers and personal lives. If you are working for a salary or wage, do the job as if it was your own business. Act with the same care and attention to detail as if you are an owner. Treat customers as an owner would, and do everything you can to make the business a success.

Developing a way of thinking that allows you to take ownership of a job will also allow you to take control of your own life. By always performing to the best of your ability, you will gain the skills and the ability to rule your life instead of having your life ruled by others. The most valuable employees in any business are those who can think independently, can add value, and who do not have to be constantly supervised to see that they are doing their jobs. Take the path to becoming a self-starter and you have a good chance of making your way to the top, or better still, owning your own business.

In South Africa, the most difficult hurdle to overcome is to get your first job. This country has shocking unemployment statistics. Stats SA’s report for the first quarter of 2015 showed 8.7 million unemployed (including those who have given up looking for work), which is 36.1% of the potential work force. Most disturbing of all is that 3.3 million (40.7%) young people aged 25 to 34, and 2.4 million (63.1%) aged 15 to 24, including those who have given up looking for jobs, are unemployed. You would think that to solve this serious problem would be the government’s number one priority but apparently it is not. Unbelievably government departments are bringing out one policy after the other that will increase unemployment even more.

A national minimum wage might sound like a good idea but, the evidence shows, it only makes many more people unemployable. Why? Because as the price of labour is pushed artificially higher by government, fewer and fewer employers are able to buy that labour. Which means more people become unemployed.

Managing a workforce has become a lot more expensive for employers. Many laws and regulations govern their relationships with their employees. Large firms have to employ highly qualified human resources (HR) and legal specialists to ensure that they comply with all the labour law requirements. These additional costs incurred to just be able to comply with the law add to the cost of labour and on average the monthly cost per employee could equal the wage of a low wage employee. It makes hiring an unskilled person uneconomical for a large firm.

In small firms, generally, it is the owners who deal with employment matters and because they don’t and can’t know the laws, they often land in trouble over labour issues. This costs time and money they can’t afford and in some cases puts them out of business.

When labour laws are complicated, like those we have in this country, both large and small firms avoid hiring unskilled and inexperienced workers, and this is why we have so many people who can’t get jobs.

I am personally supporting a constitutional challenge by the Free Market Foundation to Section 32 of the Labour Relations Act. Basically, the Act says that if the business and labour union members of a Bargaining Council (which means big business and big labour) come to agreement on wages and employment conditions for their workers, they can inform the Minister of Labour who then must extend the agreement to non-parties who have not participated in the negotiations that ended in the agreement. This provision has caused havoc for small firms, resulted in business closures, and in substantial job losses. The purpose of the challenge is to end the unconstitutional power of business and labour representatives to instruct a minister to impose their private agreements on small businesses that have not been involved in the negotiations, know nothing about the issues, cannot afford to pay the same wages as large companies, and, together with their employees, suffer untold hardship and even business closure and loss of jobs.

We must get rid of all this red tape that is causing so many people to be unemployed. The law must be changed to put the power of decision-making in your hands as workers and potential workers to decide for yourself what wages and conditions of employment you will accept. You must be able to negotiate with employers to get the best deal available. These decisions should not be made by government officials on your behalf.

Finally, I believe in freedom of contract and voluntary agreement. Our economy will not function properly while we have government officials dictating to us who we can hire and on what conditions. We must therefore get rid of apartheid-style race-based laws. I detested such laws during apartheid and I still detest them. We must have equality before the law for everyone and as our constitution demands, we must not have discrimination by the state, especially not legislated discrimination, on the grounds of “race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth”.

We must work together to persuade government to remove the barriers that are preventing young unemployed people from getting jobs so that every single one of you can start earning a living, take care of yourselves, and become proud and independent members of the South African community.

* Herman Mashaba is the Executive Chairman of Lephatsi Investments (Pty) Ltd. The views expressed in the article are the author’s and are not necessarily shared by the members of the FMF.