QLFS: Structural unemployment demands structural reform, FMF says
12 November 2024
While the Quarterly Labour Force Survey (QLFS) numbers reveal a welcome, but small, uptick in employed persons today, the Free Market Foundation (FMF) has implored the Government of National Unity (GNU) to urgently adopt structural reforms to the South African labour market.
The FMF argued that marginal tweaks of existing policy will also have minimal impact in addressing the enormous challenge of unemployment in South Africa, and thereby weaken the credibility of the GNU at the next election.
“We need not and, in fact, cannot be satisfied with meagre improvements in unemployment statistics when millions still find it impossible to enter into the labour market and hundreds of thousands are continuously dropping out of the labour force entirely,” said Dr Morné Malan. Deputy Head of Policy at the FMF.
According to a policy paper recently published by the FMF as part of its Liberty First initiative, South Africa has one of the worst regulatory environments for wage determination in the labour market globally and ranks in the bottom quartile for the general cost of bureaucracy as well as the distortionary impact of regulations on the business environment.
The slight decrease in unemployment evident from the QLFS is most likely ascribable to favourable sentiment surrounding the GNU, but not to any policy reform of note that would be necessary to help the more than 8 million (officially) unemployed to find work.
“The GNU has so far been half-hearted in its attempts to reform the destructive policy environment which has held back economic growth and prosperity for decades in South Africa,” Malan said. “However, as post-election optimism begins to wane, South Africans will start asking questions about the tangible effect of the new government and a lacklustre reform agenda could severely impact views on the GNU’s legitimacy.”
Large-scale deregulation, said the FMF, will enhance the capacity of the private sector to create jobs, foster innovation, and drive economic development.
“South Africa’s future depends on a regulatory framework that empowers rather than restricts. Cutting red tape and reducing bureaucratic interference are essential to creating economic freedom and to ensuring a more dynamic and prosperous South Africa,” Malan contended.
“The electorate did not simply vote for a change in government, they demanded to see change in their everyday experience of the economy and in their ability to live as productive, fulfilled and free members of a prosperous society,” Malan concluded.
Issued by Anneke Burns, FMF Publicist, 12 November 2024
