Each year South Africa commemorates Human Rights Day, marking the 1960 Sharpeville massacre, when police opened fire on people protesting against the pass laws. The day invites reflection on the many ways apartheid denied millions of South Africans their rights and opportunities. The passbooks are gone. Job reservation laws are gone. The racially tiered wage schedules are gone. But tax records and payroll data filed as recently as 2018 tell a more unsettling story: the labour market distortions that apartheid’s economic laws had created are still measurably present today, in the very sectors and regions where those laws were enforced.
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Talent Nesongano
Each year South Africa commemorates Human Rights Day, marking the 1960 Sharpeville massacre, when police opened fire on people protesting against the pass laws. The day invites reflection on the many ways apartheid denied millions of South Africans their rights and opportunities. The passbooks are gone. Job reservation laws are gone. The racially tiered wage schedules are gone. But tax records and payroll data filed as recently as 2018 tell a more unsettling story: the labour market distortions that apartheid’s economic laws had created are still measurably present today, in the very sectors and regions where those laws were enforced.
Mxolisi Zondi
A nationally representative survey of South African smokers confirms that illegal cigarettes made up roughly 60% of the total market in 2021. This aligns closely with other research indicating that the illicit market grew from less than 10% before 2010 to more than 55% in 2020 and subsequent years. We estimate the share of cigarettes sold at prices strongly indicative of illicit production, and identify brands and brand owners most implicated. The results show where enforcement agencies should focus their attention to curb the continued rise of illicit trade.
Walter Shiba
Agriculture is a key sector of the South African economy. Research institutions play a crucial role in generating evidence that can inform decision-making across this critical sector.
Andrew Donaldson
In the context of South Africa’s deep structural unemployment, neither the empirical evidence nor the underlying theory supports the current narrowly targeted wage subsidy of South Africa’s youth employment incentive. We outline recommendations for reform of the incentive as a broad-based employment subsidy, drawing in part on a comparison with the US earned-income tax credit. How should the ETI’s design be adapted, and what are the cost implications?
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Editor's Corner
The latest editions of Econ3x3 feature two timely articles: one on the unemployment crisis – or as the writers put it the “crisis of missing jobs” - the other on the state of SA agriculture at a time when it is under threat by both domestic and foreign naysayers.
The first, by a group of writers associated with the public employment programmes, the Presidential Employment Stimulus and the Presidential Youth Employment Initiative, argue that many have approached the unemployment crisis - particularly youth unemployment – through a faulty lens. Fewer than three million jobs have been created since 2015 – a period when more than four million new jobseekers entered the labour market.
It is time to reframe the question: “An unemployment crisis tends to make us ask: what is wrong with the people who cannot find work? A crisis of missing jobs makes us ask: what is wrong with our society that it cannot create ways for people to contribute even though there is so much work to be done to make South Africa a better place to live in?”
Public employment programmes have been criticized as being an inadequate solution to the unemployment crisis. However, the writers argue, the “employment stimulus has shown… that the state and civil society have the capacity to create higher quality, better paid work that meets growing social and environmental needs..[and] provide work experience,… for a labour market that is unable to do so.”
Also timely, given the misinformation about the “targeting” of white farmers, is the measured article by Wandile Sihlobo about the state of South African agriculture.
Democracy has been good for the sector, he argues: it has more than doubled output since 1994 and last year the country was the 32nd-largest agricultural exporter world-wide. True, it faces serious challenges, including crime and inept municipalities; it is also true that land-reform projects have stumbled, largely due to the “inertia” of the Department of Land Reform and Rural Development.
But the big picture tells us that South African agriculture has “benefited from its connectivity with the world since 1994.” It is as much a message to domestic doomsayers as it is to foreign critics: “The stories we tell about ourselves and the country matter. They shape views domestically, and how others outside view us.”
Pippa Green