Regulations are killing SA
Jobs creation stunted by rules
THE latest quarterly review figures from the first quarter have been released.
We are once again shedding jobs in South Africa, and in fact we have lost jobs every quarter since 2013. The disaster of job loss is of epic proportions and needs to be tackled head on.
A job summit was headed by our president last year and it was agreed by all the role players that we needed to create employment.
We have about 10 million unemployed people, and among the youth unemployment is at 55.2%. This means that the majority of our youth in the job market cannot find work. Statistics tell us that if someone hasn’t found a job within three years the likelihood is that they will remain unemployed for the rest of their lives.
We also know that every person employed effectively helps three to four family members. Another fact is that the majority of jobs are created by small businesses, not by big business, and certainly not by the government.
Thus it is clear that we must all work on creating an environment conducive to job creation for small businesses. Much of the environment is influenced by the government through laws and regulations.
Every political party has job creation as part of its manifesto, and every South African has an interest in ensuring that work becomes available to everyone who wants it. In essence, every citizen of South Africa is in the same boat, and we share the same goal.
It should therefore be a simple task for the experts to give us a recipe for job creation. Unfortunately, many of us have the same goal but believe in using different paths to achieve it.
Some of the best minds and universities in the world are here in South Africa.
There are also internationally renowned consultants who could put their heads together with our academics and the business community to try to overcome the ideological differences between our people.
Ideology aside, we all know that the situation is urgent, and we all understand that there is no one “silver bullet”.
There have been numerous institutions and joint efforts from the government and civil society to try to tackle unemployment. Many ideas have been tried, with varying degrees of success.
What has become clear is that the harsher the regulatory authority, the more difficult it is to create jobs.
I speak to small business owners daily who tell me that they are scared to take risks in job creation because of various factors.
One business person said quite bluntly “it is easier to get a divorce than to dismiss someone”. Another said to me that he would rather invest his money in another jurisdiction as the returns would be greater.
Mr Zwelinzima Vavi of Saftu said that business had embarked on an investment strike. Although I never agree with Mr Vavi, his statement does ring true. Many businesses would like to take the risk of employing more people in order to investigate whether a new line of business would be profitable.
Unfortunately, this risk is increased because of our harsh regulatory labour legal authority. We don’t need to change our labour laws, but we do need to have a very careful look at the regulatory environment set by the Labour Ministry.
One hopes that our president, who comes from a labour background, looks at the situation carefully and reads the surveys done worldwide on “the ease of doing business”.
Unfortunately, South Africa is way down on the scale, and we need to change this. It doesn’t take long to change regulations, nor does it cost anything. The government fully understands that the more profit businesses earn the more people they will employ and the more taxes they will pay. This is a win-win situation for government, labour and business.
A simple example of this is the national minimum wage. Although some have expressed unhappiness with it, we must accept that it is now law, and we must work within the ambit of the law. It would be a simple task for the Ministry of Labour to revisit its regulations attached to the national minimum wage, and to make it easier to do business.
In essence, some sectors have said quite clearly that if they have to pay the national minimum wage, they would have to either close up shop or shrink their businesses.
The answer given by the Department of Labour was that they should try to apply for exemptions that would then be properly considered and implemented.
Unfortunately, the minister said that she was putting a maximum exemption amount of R2 per hour, making it almost impossible for some businesses to survive.
Additionally, the exemption process is so complex and lengthy that many of us have had to spend days trying to understand the process. Unfortunately, in the Welfare Sector the workshops are not profitable. These workshops are needed to allow those within the disability sector to at least have fruitful employment (if not gainful).
Many of these workshops receive a stipend from provincial and national governments ranging from R12/hr to R16/hr. These workshops are now all threatened with closure because of the harsh regulations surrounding exemption.
A mere stroke of the pen would allow these workshops to continue operating and to keep providing humanitarian employment for those who really need it.