Employment and jobs

Finance and businesses in the time of Corona

Philippe Burger, University of the Free State on 31 March 2020
Reads 2,763

The lockdown and physical distancing measures of government impact small and medium-sized companies severely as they lack the financial reserves to survive the crisis. This article proposes immediate financial measures to support companies, large and small, to ensure that a liquidity crisis does not turn into a solvency crisis, putting many companies out of business – and causing large-scale unemployment. On a macroeconomic level the objective is to protect income and jobs by slowing down the rate at which aggregate supply and demand contract.

Hiding in plain sight: high-value agriculture’s large-scale potential to grow jobs and exports

Nimrod Zalk, Department of Trade and Industry on 17 September 2019
Reads 6,336

South Africa has a major but overlooked opportunity to expand the production of high-value agricultural products that are both labour-intensive and export-oriented. There is an extensive and growing global demand for these products. Various supply side constraints must be addressed, such as how land is used; public investment in irrigation, agricultural inputs and R&D; development finance; and logistical costs and quality. Around 300 000 jobs could be created directly and indirectly, primarily benefitting the poorest: rural women in former homelands

The informal economy: Is policy based on correct assumptions?

Caroline Skinner, African Centre for Cities, University of Cape Town on 18 February 2019
Reads 5,032

We analyse the emphasis in informal-sector and informal-economy policy, highlighting who runs the risk of being missed. We then interrogate assumptions on which policy objectives are based – notably that the informal sector acts as a ‘shock absorber’ in times of recession and, given the emphasis on the township economy, the spatial dimensions of informal-sector employment. We argue that policy makers should pay attention to harmful regulations, the infrastructure needed and where informal activities fit in value chains.

Why has manufacturing employment declined so rapidly?

Anthony Black, University of Cape Town on 3 October 2018
Reads 7,530

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 5,836

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 6,274

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 9,292

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 107,166

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 3,462

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 7,037

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.