South Africa Country Analysis

This country analysis seeks to understand the extent, causes, and consequences of informalisation of the labour market in South Africa.

It focuses on five main areas:

South African economic background and context
• labour market trends
• defining and measuring the informal sector
• influences of skills composition and mismatch
• analysis of labour market policies and programmes

The paper concludes by identifying some of the key challenges unions are addressing in South Africa.

A key challenge faced by unions is the struggle to transform the apartheid workplace that continues to dominate South Africa’s economy. Workers skills need to have their skills developed, equity needs to be achieved in the workplace, and health and safety legislation should be enforced.

South Africa has undergone a protracted shrinking of the economy, followed by what is termed “jobless growth”. Within this environment the restructuring of enterprises and the increasing shift towards engaging more casualised and temporary workers is further undermining quality jobs. Unions are addressing this issue both at the workplace and in forums at NEDLAC and processes such as Sector Job Summits. A major issue within this struggle centres on resources to fund research and develop alternatives. Another issue is the capacity of union officials to counter management proposals around restructuring, a key issue for capacity building.

The labour market, although progressively restructured, has been facing increasing attempts by employers to reduce employment levels and increase efficiencies, as the restructured economy has exposed them to fierce international competition.

The new competitive environment has not allowed employers or workers the opportunity to overcome Apartheid’s legacy of planned labour surpluses or enforced skills poverty. Not only is South Africa facing the challenges of a small emerging market in the era of rapid globalisation, it is also trying to ambitiously redress the past neglect of capacity of the majority of its workforce. The skills sets inherited from Apartheid cannot be integrated easily into a formal sector that has rapidly responded to the liberalisation of the Gear macro-economic programme by shedding labour and focusing on competitiveness.

A resolution to the current crisis of unemployment will therefore require a new form of statist intervention, this time in collaboration with all stakeholders in society, to design a structural response to the challenges of workforce development in South Africa.