Unemployment

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 325

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 807

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.

Reservation wages found in surveys can be very misleading

Rulof Burger, University of Stellenbosch on 12 September 2017
Reads 1,643

The responses of unemployed workers to the typical survey question about their ‘lowest acceptable wages’ are susceptible to error and overestimation – particularly for people in persistent joblessness. Studies using only the responses to the standard question may incorrectly conclude that vulnerable workers are unemployed because they tend to price themselves out of employment – while in fact their responses are just unreliable and distorted indications of their true reservation wages. Alternative questions would give more reliable results.

The former Transkei and Ciskei homelands are still poor, but is there an emerging dynamism?

Michael Aliber, Department of Agricultural Economics and Extension, University of Fort Hare on 2 August 2017
Reads 2,360

The dominant perspective on the economic situation of the former homelands is that long-term, deliberate neglect has left a durable legacy of poverty and stagnation. While this may be largely correct, there is also evidence to suggest that the former homelands are dynamic. This article presents some evidence on population, employment and unemployment, in particular through a focus on the evolving nature of the linkages between former homeland towns and their rural environs.

REDI3x3 conference: Policies for inclusive growth

Murray Leibbrandt, University of Cape Town on 15 February 2017
Reads 3,914

The REDI3x3 research project has completed most of its research at a time when unemployment, poverty and inequality is intense. With growth at just 0.5%, government needs to become more innovative in fixing the social policies that hamper progress. It should draw on all the research evidence to find ways to transform the structure of the economy without inhibiting growth. Addressing education, low labour intensity, the informal sector and the spatial legacies of apartheid can make a real difference.

Are internal migrants more likely to be unemployed than locally born residents?

Susan Ziehl, Cape Town on 11 October 2016
Reads 2,696

This article compares the labour-market status of migrants and locally born residents. The focus is on migration into Cape Town and the Western Cape from elsewhere in South Africa. Survey and census data show that migrants were more likely to be unemployed than residents in 2001 and 2011. However, in 2011 migrants were also more likely to be employed and to be economically active (working or wishing to work) than locally born residents. They are also more likely to be self-employed than non-migrants.

Do low-paid workers’ wage increases raise unemployment – and is this relevant for the minimum wage debate?

Dieter von Fintel, University of Stellenbosch on 30 March 2016
Reads 6,250

Increasing the wages of workers in the bottom half of the wage distribution contributes less to regional unemployment than increasing the wages of better-paid workers. The wages of the worst-paid – who live in regions of low union and large-firm concentration – play almost no role in unemployment. Collective bargaining arrangements appear to explain these differences. This phenomenon may soften the negative impact of a national minimum wage on employment in the short run, but might make matters worse in the longer run.

Labour and unemployment in South Africa: towards a ‘grand bargain’

Ravi Kanbur, Cornell University on 7 October 2015
Reads 5,763

The problematics of the situation in South Africa are clear: high unemployment, high inequality and low growth, combined with a lack of consensus on what to do. It might be more fruitful to think in ‘grand bargain’ terms: a package of policies that are intended to balance opposing perspectives whose differences cannot be resolved through technical debate – and to set short-term political-economic imperatives against the longer time horizon needed for policy interventions to address deep structural legacies

A foot in the door: are NGOs effective as workplace intermediaries in the youth labour market?

Veerle Dieltiens, Centre for Education Policy Development on 28 September 2015
Reads 4,408

It has been argued that properly focused workplace intermediaries can reshape the labour market to become more youth friendly. Case studies of NGO intermediaries in South Africa offer some optimism but also caution in this regard. Although the intermediaries were able to match unemployed youth to jobs, smooth the transition to work and even positively influence employers’ reticence, they are small in scale and costs are high – and they have yet to broker larger pacts to add more jobs.

Youth unemployment: can labour-market intermediaries help?

Andre Kraak, Wits School of Education on 17 September 2015
Reads 4,942

Labour-market intermediaries can make a significant contribution to the reduction of youth unemployment.They recognise that the demand for labour is not fixed. By reshaping the attributes and broader workplace skills of the young jobseeker, labour market intermediaries can help overcome employers’ reticence to employing first-time workers. Such interventions, although small in scale, may be more successful than larger public works schemes of government. The potential positive impact of such intermediaries is demonstrated with international examples.