LABOUR MARKET TRENDS

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LABOUR MARKET TRENDS

• Presentation to the Portfolio Committee
• 03 September 2002

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APARTHEID LEGACY

• FACTORS WITH A NEGATIVE IMPACT ON JOBS

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• Macro economic instability e.g.
• Debt burden
• Inflation
• Poor balance of payment etc.
• Volatile interest rate
• Bad fiscal policy

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• Poor industrial performance
• Economic isolation with constrained economic
  growth
• Inefficient protectionism
• Weak competition laws
• Hostile environment for black owned enterprises
• Insufficient investment in infrastructure (in
  black areas)

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• Labour market
• Structural unemployment
• Racial and gender discrimination
• Income inequalities
• Low skills base
• Decline in primary sector (consequential
  retrenchments)

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• Education and Training
• Effects Bantu Education (producing) cheap
  labour
• Weak vocational and technical education system

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POST 1994
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• Macro economic stability
• Stimulating economic growth
• Geographic interventions to boost investment,
  production and development through SDIs
• Sector specific interventions eg Motor Industry
  Development Programme

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1. Steady but sustained growth
2. Marginal increase in investment
3. Low levels of savings
4. Good productivity / salary ratio

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EMPLOYMENT TRENDS

• Stats SA 29.6 unemployment (2001)

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Characteristics of the Unemployed - A total of 4
525 000 countrywide as at Sep 2001

• 71.9 are aged between 15-34 years
• 51.7 are female
• Af 86.8, C7.9, I2.4 W2.8
• 64.6 reside in urban areas
• 45.8 have worked before
• 66.5 of the spent ?1yr looking for work.
• 93.3 not gone beyond Grade 12.

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Major problems in the Labour Market

• The high rates of unemployment and
  under-employment
• the low rates at which productive employment is
  being created in the economy
• the existence of widespread poverty among low
  wage earners, the underemployed and the
  unemployed

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• the extreme level of inequality, primarily on the
  basis of race and gender
• the low levels of education, skills and
  investment in training
• the legacy of adversarial labour relations in the
  formal economy
• the inadequate protection for some low-wage
  earners such as farm and domestic workers.

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Labour market policy objectives

• Create an enabling environment for the attainment
  of economic growth, social development, and
  increased efficiency, productivity and employment
• Promote stable and sound labour relations
• Enhance the development of skills

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• Eliminate discrimination and inequalities in the
  labour market and
• Improve working conditions and social security
  benefits.

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Approach to Labour Market Policy

• The need to regulate the labour market in order
  to resolve inherited rigidities and
  inflexibility
• The need to promote labour market and overall
  economic efficiency
• The need to support and enhance employment
  creation

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• The need to promote worker security, safety, and
  through maintenance of socially acceptable and
  mandatory and minimum conditions and standards of
  employment
• The need to promote participatory and
  co-operative industrial and labour market
  relations in the context of an institutionalised
  and regulated framework and
• The need to promote equity and skills in the
  labour market.

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• This approach aims to forge a middle route
  between the extremes advocated by those in favour
  of unqualified labour market flexibility or
  deregulation of the labour market, and those
  advocating a more rigorous regulation of the
  labour market.

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Strategic Approach

• The promotion of labour-market efficiency within
  a regulated framework that allows for variability
  with respect to wage determination, work
  processes, and the utilization of labour in a
  manner that is compatible with security
• The promotion of voice regulation through
  participatory labour-market institutions,
  co-operative labour relations and collective
  bargaining

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• The implementation of a preventative strategy
  that will reduce the burden on administrative
  monitoring, inspection and enforcement and that
  will empower social partners to pro-actively
  participate in the execution of the strategy

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FIFTEEN POINT PROGRAMME OF THE MINISTRY OF
LABOUR
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Fifteen point programme

• First, there is the need to strike an appropriate
  balance between security and flexibility in the
  labour market.

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• Second, employment creation is the biggest
  challenge facing government. The Departments
  particular contribution to this challenge rests
  with the formulation of effective and active
  labour market policies as well as to provide a
  supporting and enabling environment for jobs to
  be created.

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• Third, we shall ensure the effective and
  efficient implementation of the resolutions of
  the Presidential Job Summit in order to
  accelerate job creation and tackle the scourge of
  high unemployment.

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• Fourth, the skills deficit is one of the major
  handicaps to the development of our economy and
  is a discouraging factor to potential foreign
  investors.

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• Fifth, in light of the persistent way that racial
  and gender inequalities exist in the workplace
  and contribute to the inefficient utilisation of
  our human resources, the Department passed the
  Employment Equity Act in 1998.

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• Sixth, the state carries the responsibility of
  protecting vulnerable workers to ensure that they
  have the same basic rights and are afforded their
  dignity. The Basic Conditions of Employment Act
  is the principal instrument through which such
  protections are extended.

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• Seventh, there will be a need to introduce
  legislative reforms that are intended to improve
  the safety net to cushion those affected by the
  countrys structural unemployment.

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• Eighth, to adequately deal with the negative
  consequences of occupational accidents and ill
  health on individuals, enterprises and the state,
  we will accelerate measures aimed at reducing
  accidents and improving the health and safety of
  workers.

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• Ninth, evidence suggests that the interventions
  introduced through the Labour Relations Act of
  1995 have contributed positively to promoting
  stable labour relations. The Department will
  ensure that these gains are built upon and
  consolidated in order to continue with the
  downward trend in industrial conflict.

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• Tenth, the Department shall build on the
  initiatives already undertaken to promote
  productivity.

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• Eleventh, the transformation of various statutory
  bodies and the establishment of NEDLAC have
  brought clear gains in policy development and
  policy making. The challenge is to build on this
  culture of dialogue and nurture the opportunities
  for deepened social partnership.

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• Twelfth, the Department will continue its
  efforts to ensure that our country is fully
  integrated in the international system.

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• Thirteenth, the Department will improve its
  capacity to monitor the impact of government
  policy in regard to economic growth, employment
  and development.

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• Fourteenth, the major institutional restructuring
  we have undertaken will have to be extended and
  consolidated in order to ensure that the
  Department of Labour is aligned to address the
  above mentioned challenges and carry out the new
  and expanded mandate that emanates from the
  changed policy environment.

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• Fifteenth, while the thrust of our policies will
  remain the same, certain areas will receive
  attention for possible legislative amendments to
  improve the effective functioning of the labour
  market and reduce what may be perceived to be
  obstacles to employment creation.

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DEPARTMENTAL STRATEGIC PLAN
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Seven Strategic Objectives

• Ongoing review of labour market policies
• Improve application
• Sensitivity to employment creativity
• Sensitivity to employment creativity
• Good governance in the labour market (CCMA,
  Labour Court)
• Improve collective bargaining environment

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• Skills Development
• Skills to boost growth, investment, job creation
  and development
• Implementation of skills development strategy
• Effective functioning of SETAs
• Preparation of sector skills plans
• Development of HRD strategy

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• Employment Equity
• Eradicate unfair discrimination
• Promote workplace equity

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• Protection of vulnerable workers
• Improving employment conditions of vulnerable
  workers
• Eradication of child labour

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• Social safety net
• 5.1 Unemployment Insurance Fund
• New UIF legislation
• Improve administration and IT system

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• 5.2 Compensation Fund
• Improve operations
• Speedier claim processing
• Policy review

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• Occupational Health and Safety
• Promote reduction of accidents, fatalities and
  diseases
• Prioritize high risk sectors
• Harmonization of OHS competencies

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• Promotion of stable labour relations
• Efficient registration of labour organizations
• Effective functioning of Bargaining Councils
• Promotion of dispute prevention and resolution
  mechanisms
• NB shift from policy to implementation

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• Internal transformation
• Information Technology plan
• Promotion of service excellence
• Human resource plan

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Thank you