Employment and jobs

Why has manufacturing employment declined so rapidly?

Anthony Black, University of Cape Town on 3 October 2018
Reads 302

The manufacturing sector has performed poorly and employment has fallen sharply. Policy has tended to push manufacturing onto a more capital-intensive trajectory. Paradoxically, South Africa’s actual (or ‘revealed’) comparative advantage has come to be in relatively capital-intensive products. In contrast, labour-intensive sub-sectors have performed poorly. In a context of high structural unemployment, industrial policy should focus more on supporting employment-intensive growth by subsidising labour and training rather than capital investment, electricity and infrastructure for capital-intensive firms.

Creating jobs, reducing poverty V: Is ‘formalising’ the informal sector the answer?

Frederick Fourie, REDI3x3, based at SALDRU, University of Cape Town on 21 August 2018
Reads 508

This extract from a new REDI3x3 book proposes a constructive way to approach the possible ‘formalisation’ of the informal sector. A common impulse is to reduce formalisation to regulating and taxing informal enterprises – two blunt instruments that can be destructive. Formalisation must rather be seen as a means to aid the quest for better livelihoods for more people and stronger, more self-standing informal enterprises. Smart formalisation can be pursued with a ‘formalisation menu’.

Creating jobs, reducing poverty IV: What policy approach to enable the informal sector?

Frederick Fourie, REDI3x3, based at SALDRU, University of Cape Town on 14 August 2018
Reads 586

This extract from a new REDI3x3 book outlines an appropriate and ‘smart’ policy approach to enable enterprises in the informal sector. Such policies need to be differentiated and nuanced, recognising that both one-person or multi-person enterprises are situated on a developmental spectrum from embryonic to mature states, some ‘survivalist’ and others ‘growth-oriented’, with different aspirations, entrepreneurial aptitudes, degrees of development, complexity and capacity – and different needs and challenges. Factors for good policy design are identified.

Creating jobs, reducing poverty II: The substantial employment performance of the informal sector

Frederick Fourie, REDI3x3, based at SALDRU, University of Cape Town on 31 July 2018
Reads 953

In this extract from a new REDI3x3 book, the employment-creating behaviour of informal enterprises is analysed – in particular, enterprises with employees. Almost half of those working in the informal sector work in such multi-person firms – which provide paid work to about 850 000 people (owner-operators plus paid employees). There is a growing employment orientation and employment intensity. Jobs are created via new-firm entry as well as employment expansion – also by one-person enterprises. Entrant firms are vulnerable, though.

Creating jobs, reducing poverty I: Why the informal sector should be taken seriously and enabled properly

Frederick Fourie, REDI3x3, based at SALDRU, University of Cape Town on 23 July 2018
Reads 4,804

In the first extract from a new REDI3x3 book on the role of the informal sector in job creation and poverty reduction, a compact picture of the size, texture and impact of the sector is provided. One in every six South Africans who work, work in the informal sector. Several policy-relevant features are highlighted, such as industry, spatial and gender dimensions. This provides the backdrop for the second extract on the employment-creating performance of the informal sector.

What affects job retention and job creation: reservation wages or reservation what?

Christine Jeske, Wheaton College, Illinois on 2 July 2018
Reads 558

Unemployment research typically inquires how to generate more jobs and how to keep workers working. Researchers often probe the reservation wage level (which appears to balance the interests of employees and employers). Qualitative research findings suggest that wages may be less significant factors in work-related decisions than the nature of interpersonal relationships in the workplace. Both employees and employers emphasise the importance of the quality of relationships, though employers and employees highlight different factors.

Is the growth of labour productivity in manufacturing a good thing?

Neil Rankin, Stellenbosch University on 27 February 2018
Reads 2,278

Labour productivity grew substantially in the first twenty years of democracy, but is this unequivocally good? Much of the increase has been driven by changes at the firm level. Smaller firms’ average labour productivity increased more than that of larger firms. This seems to reflect changes in the composition of firms and jobs – smaller firms and low-productivity jobs appear to be vanishing. This is worrying because these are the type of jobs we need to reduce unemployment.

Technology and minimum wages are likely to change the mix of capital and labour in industry

Friedrich Kreuser, Department of Economics, Stellenbosch University on 20 June 2017
Reads 3,185

While technology is making capital cheaper, policies like the national minimum wage will make labour more expensive. What does this mean for the choices firms make in terms of labour and capital inputs? This research shows that higher prices for labour will result in lower demand for labour, making job creation more difficult. Low-skilled and high-skilled labour are substitutes – higher wages for low-skilled workers will encourage firms to employ more high-skilled workers and become more skill intensive.

Youth unemployment: what can we do in the short run?

Lauren Graham, Centre for Social Development in Africa, University of Johannesburg on 12 December 2016
Reads 15,021

The challenge of youth unemployment is shaped by factors in both the labour market and the education system, alongside intricate community, household and individual-level issues. This complex mixture may make it a seemingly intractable problem. While long-term solutions need to be discussed and implemented, certain options warrant attention in the short to medium term. If these were efficiently addressed, we could begin to break down the barriers that prevent entry into the labour market for at least some young people.

The employability of higher education graduates: are qualifications enough?

Elza Lourens, Stellenbosch University on 21 November 2016
Reads 4,264

The transition from higher education to employment is a challenge, considering persistent graduate un- and underemployment. Qualifications are not enough. Graduates (should) develop a ‘workplace identity’ that improves their chances of being employed. An empirical study shows that achieving employability frequently involves several labour-market states in which personal attributes are utilised but also developed. Most graduates are not prepared for this arduous journey, something both higher education institutions and graduates should attend to.