Pravin Gordhan and the Labour Market

You might have picked up from warm and welcoming statements by the Democratic Alliance and a flood of beaming news stories that our Minister of Finance Pravin Gordhan said something slightly more exciting about economic policy than the bland pap from the policy kitchen of the increasingly awkward compromise which is the Ruling Alliance.

But before anyone gets too excited we should look at exactly what he said.

First up, in the main body of his speech to the 14th annual conference of the Board of the Institute of Internal Auditors – a body I suspect has hitherto not been allowed to bask at the centre of an important breaking news story – he suggested as part of his list of things that need to be done to “energetically reposition, restructure and reform our economy” :

Lower the cost of young, inexperienced low-skilled workers for firms to stimulate the demand for labour

That is from the paper as published on the the Treasury’s website – catch that here – it is well worth a read.

Then press stories – this from the New Age – seem to imply that he took things a little further in discussion. I give you the full text below, especially as the journalist has left off quotation marks on the key sentence, making me wonder if this is more a case of hearing what you want to hear than it is an accurate reflection of exactly what the minister said:

The New Growth Path envisages the creation of five million jobs by 2020. Gordhan suggested that South Africa might have to relax its labour laws in certain cases to grow jobs. “We may have to change the way we see the labour dispensation in South Africa,” he said.

For example, a balance needed to be found to retain the jobs of the 10,000 people working at clothing factories in Newcastle, KwaZulu-Natal, while still allowing them to earn a reasonable wage and keeping the factories open.

There is no doubt in my mind that the inflexibility of our labour market is partly responsible for the high levels of unemployment in this country.

I have tired of pointing out that as the representative of the ‘already employed’ Cosatu is not to be trusted to talk on behalf of the ‘unemployed’ – with whom its interests often conflict (see here, but a number of other places as well).

The Minister of Finance’s job is to find an economic policy that somehow reflects the national interest – and not the sectional interest of organised labour.

The most important government priority is to find ways to grow the economy in a manner that helps create the greatest number of jobs.

With a government gone soft in the middle, led by a compromised and beholden president, it is a relief to hear someone in power, however tentatively, at least name the nettle if not actually grasp it.

One thought on “Pravin Gordhan and the Labour Market

  1. Thanks for the insights, Nic, and links to relevant articles. I had not read before of Pravin Gordhin’s appeal to auditors to sharpen up in the fight against corruption in the government AND private sectors, or any regard by the government of the increasing chasm between the richest and poorest in S.A. If Minister Gordhin is really speaking on behalf of the government (whoever that might be, these days) what he is saying must be taken seriously, particularly in the context of current hot topics such as the National Health Insurance Plan and the once-off tax on whites.

    As I type I can hear the palms of the wretched tenderpreneurs rubbing together in anticipatory glee.

    Personally, I am loathe to part with another cent of my honestly earned money until the government is seen to be ACTING PROPERLY on, amongst others:

    – the public protectors report on the police lease scandals
    – Travelgate corruption saga
    – the real biggie – that goddam Arms Deal. This is the original cancer of corruption, inherited from the previous government, which has now spread throughout the new government and society. We had the chance of a lifetime, and we blew it.

    There will be many more people admitted to ICU with chestpain when that one is re-opened.

    Just my two cents worth, but it is worth a heck of a lot more than that to me: it is my future and the future of the 50 million people whose country I share.

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