‘State-sanctioned job destruction is at odds with NDP’

THE NATIONAL Development Plan (NDP) aims to reduce unemployment from 25 percent to 6 percent by 2030, yet the nation suffers from state-sanctioned job destruction, especially in the clothing industry.

This is according to Jeremy Seekings, a professor of political studies and sociology at the UCT, who was speaking at the 26th annual Labour Law Conference yesterday.

He said the NDP estimated 11 million jobs would be needed by 2030 and pinned its hopes for a huge expansion of employment for less skilled workers on small and medium enterprises and labour-intensive sectors.

“These are precisely the businesses or sectors that have failed to grow or have shrunk in the past,” Seekings said.

He said decent work was an unassailable objective. The International Labour Organisation had emphasised the dual need for both job creation and decent work, and decent work was not primarily about wages. But in South Africa, the decent work agenda was often delinked from job creation and focused more sharply on wages.

Seekings said the NDP was long on vision but short on detail. It had little to say about what the state would do differently to steer the economy down a growth path that could absorb more labour.

The only major reform mentioned in the NDP was the youth wage subsidy. There was no discussion of how labour market institutions shaped the cost structure of labourintensive sectors, leading to job destruction.

Seekings said the minister of labour used the extension mechanism in the Labour Relations Act to impose increases in the minimum wage in some sectors to levels that some employers could not afford, without any requirement even to consult the affected employers or workers, or to take into account employment effects.

The extension mechanism also criminalised non-compliant employers and hence destroyed jobs, both directly and indirectly.

The wage extension process criminalised non-compliant employers and hence destroyed jobs.

He said that since 1994, there had been a wholesale destruction of less skilled formal employment in labourintensive sectors. For instance, the clothing industry was the last remaining low-wage, labour-intensive manufacturing sector but it was being squeezed between cheap imports and upward pressure on local costs, primarily wages.

Seekings said the Southern African Clothing and Textile Workers’ Union (Sactwu) and various regional employers’ associations negotiated in the national bargaining council.

If Sactwu and at least one employers’ association agreed, then their collective agreement was binding on all members of all the employers’ associations.

The minister of labour extended the collective agreement to all employers in the sector, across the country, including those who were not party to the agreement in the national bargaining council.

The court sheriffs, acting on behalf of the national bargaining council, attached the assets or closed down the factories of employers that did not comply, thus destroying jobs directly and indirectly.