The dilemma of job creation and decent work

Edward Webster

In August 2010 South African government officials began closing down clothing and textile factories in Newcastle, in the province of KwaZulu–Natal. This came in the face of angry protests from the workers because the owners were paying less than the statutory minimum wage of R324 ($49) a week. The factory owners said they could not pay more and survive in the face of cheap Chinese textile imports.
 

Globally, the clothing and textile industry is to a large extent controlled by an oligopolistic group of large retailers and branded manufacturers, who stipulate their supply specifications in terms of low price, high quality and short lead times. But due to the strengthening of the local currency (the rand) since 2003, the end of the Multifibre Agreement (MFA) in 2004 and relatively high labour costs, South Africa no longer has a comparative advantage in an integrated global economy.[i]

Argentina’s ‘Year of Decent Work’, a critical assessment

Bruno Dobrusin

The centre-left government of Cristina Kirchner declared 2011 as the ‘Year of Decent Work’ in Argentina, following consultations with the ILO and other international institutions regarding government programmes during the current global economic crisis. The Kirchner administration has indeed promoted several counter-cyclical measures to fight against the global recession and maintain levels of employment in the country. The relative success of these policies, together with the continuous economic growth that Argentina has witnessed since 2003, led the government to tour the international forums such as the G20 meetings and claim that Argentina is an example of a successful response to the crisis. Despite the improvements in the overall economy and the high levels of employment that the country is witnessing, the so-called ‘model’ is far from ideal, and has to be questioned on its main claims. This article discusses the recent improvements as presented by the government and the counter-facts suggested by a recent study carried on by the Workers’ Confederation of Argentina (CTA)[i].

The euro crisis and the European trade union movement

Vasco Pedrina

After successfully bailing out banks and adopting a first wave of economic recovery measures, the authorities of the European Union (EU) and its member states began to impose draconian, anti-social austerity plans from the beginning of spring 2010. These plans stem from an increasingly coordinated policy at the EU level, which is entering a new phase with the “Euro-Plus Pact” and the “enlarged bailout plan”. Dressed up as part of a fight against “macroeconomic imbalances”, new mechanisms are to be put in place. These will provide EU authorities with the means to step up the pressure for general social dismantling. Concretely, this amounts to a “wages straitjacket” that calls into question the autonomy of social partners (one of the pillars of the “European social model”), raises the retirement age across European countries and introduces legislation to curb national debt. This policy is not only having dramatic social repercussions. It is also heading up an economic blind alley that is putting the euro at risk.
 

7 Reasons why a Universal Income makes Sense in Middle-Income Countries

Hein Marais

Is job creation really the best way to seek wellbeing for all in countries with chronic, high unemployment? No – especially not in a wealthy middle-income country like South Africa, where very high unemployment combines with high poverty rates. Here are 7 reasons why a universal income grant makes more sense.

 

1. EARNING A DECENT SECURE WAGE IS NOT A PROSPECT FOR MILLIONS OF SOUTH AFRICANS

While the rewards of South Africa’s modest economic growth are cornered in small sections of society, close to half the population lives in poverty, and income inequality is wider than ever before.
 

Job creation improved modestly as economic growth accelerated in the early 2000s. About 3 million ‘employment opportunities’ were created in 2002-08. The semantics are important. Very many of those ‘opportunities’ did not merit being called ‘jobs’. They divided roughly equally between the formal and informal sectors, and occurred mainly via public works programmes, business services, and the wholesale and retail trade sectors. A lot of them were crummy, insecure and poorly paid.