South Africa faces a dire employment crisis, with over 7.895 million jobless citizens, doubling figures from 2008. Alarming consequences emerge, particularly affecting women, the less educated, and the youth, resulting in a staggering 60.75% of 16 to 24-year-olds unemployed. Labour laws, including the National Minimum Wage Act, exacerbate the issue, leading to unconstitutional restrictions on freedom of contract. The Human Rights Commission’s silence raises concerns, emphasizing the need for a Job Seekers Exemption Certificate to restore the right to work and combat the widespread, unsustainable unemployment epidemic.
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By Eustace Davie*
No less than 7.895 million South Africans were jobless at the end of last year, most of whom remain jobless in March this year.
Incredibly, this is well-nigh double the number of people who were without jobs at the end of 2008.
Moreover, this is around 2 million more than were jobless at the end of 2018 when the new National Minimum Wage Act was foisted upon our country’s working population. That is, jobless people increased in number by one third after the National Minimum Wage Act became law. These are official statistics, not open to informed debate.
Women and people with lower levels of education suffer the most under higher levels of unemployment. SA statistics show that 76,1% of men were long term unemployed and as much as 80.6% of women are long term unemployed.
But the really shocking effect of labour law in SA is that it keeps so very many young people out of work and deeply despondent. South African now claims the dubious distinction of having the highest level of youth unemployment on the African continent. An almost unheard of 60,75 of persons 16 to 24 years old are without jobs in this wonderful country. This level of joblessness has never before pertained in our country.
Onerous minimum conditions of employment, compulsory minimum wages and a plethora of further regulatory conditions imposed on employers serve to consign young South Africans, in large numbers, to the ranks of the long-term unemployed. Costs imposed on small firm employers frequently exceed the economic value of hiring one additional employee.
Does the Bill of Rights play a positive role?
When the South African government steps out of line and inflicts legislation or regulations upon its citizens which conflict with the Constitution, the citizens would expect to be able to turn to the Constitution for relief. Onerous over-regulation of the labour market has resulted in this mass unemployment. Implementation of what is certainly unconstitutional minimum wage legislation has all occurred through the South African Parliament. Victims of this legislation would expect to be able to turn to the Human Rights Commission and to the Constitutional Court to assist with the removal of these barriers to their employment.
The reality is that there has been no mention of the Bill of Rights and particularly not Section (7)(1) which states that “This Bill of Rights is a cornerstone of democracy in South Africa. It enshrines the rights of all people in our country and affirms the democratic values of human dignity, equality, and freedom. And section (7)(2), which decrees that the state must respect, protect, promote, and fulfil the rights in the Bill of Rights.” There has been no opposition from the Human Rights Commission to the implementation of the minimum wage. Given that the implementation of the minimum wage conflicts with section 9 of the Bill of Rights (the Equality Clause), the minimum wage is patently unconstitutional and the limitation of the rights of the people so rendered unemployed is not justifiable.
A report issued by the Human Rights Commission states that: “While the mandate of the Commission includes promoting respect for human rights and a culture of human rights, promoting the protection, development and attainment of human rights and monitoring and assessing the observance of human rights in the country, such mandate is intricately linked to the mandate of the state in section 7(2) of the Constitution to respect, protect, promote and fulfil the rights in the Bill of Rights.” It is unfortunate therefore that the Commission does not intervene in defence of the young people who have been rendered jobless by the implementation of the insidious National Minimum Wage.
Depriving job seekers and employers of their right to freedom of contract
Labour laws that seek to increase the job security of people who already have jobs cannot avoid interfering with the contractual rights of the unemployed and of their potential employers. If that were not so, there would be nothing to stop jobseekers from contracting freely with employers on mutually agreeable terms. Where there is unrestricted freedom of contract, very few people should be unemployed.
Implementing the minimum wage law, which deprives the unemployed of their right to freely contract with employers of their choice, at wages and conditions of employment acceptable to both parties, conflicts directly with Section (7)(1) of the Bill of Rights. That conflict deprives the unemployed of their constitutional rights to the democratic values of human dignity, equality, and freedom. Section 7(2) of the Bill of Rights requires that the state must respect, protect, promote, and fulfil the rights in the Bill of Rights.
Instead of following the constitution, members of Parliament, as state representatives, have adopted legislation that conflicts with the Bill of Rights and has deprived the unemployed of their constitutional rights. Parliamentarians have thus imposed, by force, unconstitutional and discriminatory legislation upon potential employers and employees, which has led to the current state of untenable and unsustainable mass unemployment.
Grant relief to the unemployed who have been deprived of their right to work
The most damaging aspect of the implementation of the minimum wage in South Africa is the burden it places on low-income employers. In countries where small firms thrive and provide jobs to millions of first-time workers, the small firms provide a valuable knowledge-transfer service to new employees.
Freedom to work must be restored to the young people of South Africa who are prevented by the “minimum wage brick wall” from voluntarily accepting employment on conditions and at a wage acceptable to themselves, not to distant bureaucrats in ivory towers.
Young jobless people are offered no alternative. The minimum wage law prohibits them from working voluntarily for any wage considered “sub-minimum”. It is thoroughly perverse not to provide them with any alternative, other than perhaps, God forbid, a mass uprising!
The problem readily could be resolved by issuing the unemployed, on application, with a Job Seekers Exemption Certificate (JSEC) which restores to the unemployed person the right to accept employment on conditions and terms acceptable to them whilst they gain invaluable experience.
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*Eustace Davie is a Director of the Free Market Foundation. The views expressed in the article are the author’s and not necessarily shared by the members of the Foundation.
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