Reducing inequality will not happen on its own – explicit policies are needed

Janine Berg

For the past decades, in many countries of the world, the State has slowly retreated amidst the belief that by giving more space to market forces there would be greater economic growth and thus greater economic opportunities. This belief was manifest in the drive to liberalize goods and financial markets in the 1980s and 1990s across the world, and in the decreased investment by the public sector of many advanced economies in public services and goods as well as in redistributive policies.

Not all countries instituted these changes as wholeheartedly as others, and not all countries originated from the same starting point, but the overall effect has been rising inequality in most parts of the world: North America, Europe, Asia, and parts of Africa. Latin American in the 2000s (though not in the 1980s and 1990s) stands as an exception, largely because many countries in the region increased public investment, strengthened minimum wages and instituted redistributive policies during this decade.

Over the past few years, the increase in inequality has become a growing concern among policymakers and the public at large. But while the problem is now recognized, many of the policy solutions advanced are the same as those espoused during the onset of globalization, namely improving workers’ skills so that they can better compete in the labour market.

The Transformation of the Construction Sector in South Africa since apartheid: Social inequality and labour

Eddie Cottle

Over the past 20 years South Africa’s construction sector has undergone marked expansion. In the apartheid era it was constrained by sanctions and racial policies. However, the post-apartheid state actively encouraged a series of policy measures to foster the economic growth of South African construction firms. Key to the policy process was the establishment of a Construction Industry Development Board, a Register of Contractors, the scheduling of public sector spending through the Medium Term Expenditure Framework process, and support programmes to develop the emerging black contractors. The post-apartheid state also became the construction sector’s biggest single client in the delivery of social and economic infrastructure. 

The almost immediate shift from the social democratic Reconstruction and Development Programme (RDP) in 1994 to a series of neo-liberal macro-economic policies, from 1996 onwards, ensured increasing levels of labour flexibility and improved productivity of the labour force. State intervention was therefore crucial in ensuring that the construction sector enjoyed 18 years of sustained economic growth with an average GDP contribution of 2.3 per cent over a 20 year period.