by EUSTACE DAVIE
JOHANNESBURG, (CAJ News) – IRVIN Jim, the General Secretary of NUMSA (National Union of Metalworkers of South Africa), recently made a statement entitled, “The current government has no solutions to solve the unemployment crisis”.
This statement is riddled with economic fallacies and outdated thinking, including the well-known fixed pie theory and the single breadwinner fallacy. He assumes that the wealth or resources in the economy are static and overlooks the broader economic environment in South Africa, particularly the sheer scale of unemployment in South Africa. By focusing on maintaining high minimum wages and draconian labour laws, Jim and NUMSA appear to be more concerned with protecting the jobs and wellbeing of their members than addressing the suffering of the millions who are out of work and living in poverty.
The Single Breadwinner Fallacy
Jim’s argument that the minimum wage is insufficient because it does not cover the costs of an entire household is based on the outdated concept of the single breadwinner. This notion assumes that one person should be able to earn enough to support an entire family, which may have been relevant in the past but does not reflect South Africa’s current economic realities. In today’s economy, multiple incomes per household are often necessary to achieve financial stability. By clinging to this fallacy, Jim ignores the potential benefits of having multiple adults in a household contribute to the family income, even if some of those contributions come from lower-paying jobs.
Preferring Starvation Over Employment?
NUMSA’s rejection of the Job Seekers Exemption Certificate (JSEC) and their opposition to desperately needed flexible labour market policies suggest that they would rather see their fellow citizens remain unemployed than accept jobs that pay less than they consider to be a “living wage”; this stance is fundamentally flawed. As Thomas Sowell aptly put it, “the real minimum wage is zero.” When labour laws prevent people from accepting jobs at lower wages, the alternative in South Africa at present is not a better-paying job – it is no job at all. This condemns millions of people to poverty and unemployment, rather than providing them with the opportunity to work and support their families.
Protecting Members from Competition at the Expense of the Poor
It is apparent that Jim and NUMSA are more focused on protecting their members from competition rather than caring about the unemployed people who are struggling to survive. By opposing policies like the JSEC, which could allow more people to enter the workforce, NUMSA is effectively shielding its members from the potential competition posed by the unemployed. This form of contemporary job reservation might serve the interests of union members who already have jobs, but it does so at the expense of the millions of South Africans who are jobless and living in poverty.
NUMSA’s statement also reflects the flawed fixed pie theory, which is the mistaken belief that the wealth in an economy is a static “pie” to be divided up and that one person’s gain must come at the expense of another. This perspective leads to protectionist policies that limit competition and innovation and impedes the expansion of the economic “pie.” Instead of enabling more people to enter the workforce and contribute to higher economic growth, these policies restrict opportunities and entrench unemployment. In the long run, this approach is counterproductive because it damages not only the economy but the unions themselves, as they are unable to expand their membership base like they would in a thriving, growing economy.
The Reality of South Africa’s Unemployment Crisis
South Africa’s unemployment crisis is one of the worst in the world; it is higher even than in some war zones. The latest figures show an official unemployment rate of 33.5% and an expanded unemployment rate of 42.6%, which includes those who have given up looking for work. These figures represent an astounding 16.3 million South African citizens who are jobless. In this context, NUMSA’s insistence on higher wages and ever more draconian labour laws is not only misguided but actively harmful to the broader population who are locked out of the labour market.
Half a Loaf is Better Than No Bread
The saying, “half a loaf is better than no bread,” is particularly relevant here. NUMSA’s rigid stance on wages ignores the South African reality that some income, even if modest, is better than nothing. Even at lower wages, having a job offers individuals the dignity of work, the opportunity to gain experience, and the means to gradually improve their family’s economic circumstances. By opposing policies that could create jobs at lower wages for the long-term unemployed, NUMSA are simply worsening an already dire situation.
Conclusion
South Africa urgently needs more flexible labour market policies if we are to even begin to address the unemployment crisis. The JSEC is a practical and simple solution, offering a way to reduce unemployment and provide more South Africans with the opportunity to work and support their families. It’s time to move beyond outdated economic models and embrace policies that reflect the realities of today’s economy.
NB: Eustace Davie is a Director of the Free Market Foundation and author of Unchain the child.
– CAJ News