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Wednesday, February 6, 2013

Day 293: Jobs: The Vanishing Act

http://www.moneyweb.co.za/moneyweb-the-burning-question/lowwage-jobs-for-farmworkers-domestics-to-vanish

On Monday, Labour Minister Mildred Oliphant announced a 52% increase in the minimum wage for farm workers; henceforth, South Africa’s agricultural labourers will earn a minimum of R105 a day, up from the R69 a day agreed upon at the previous sectoral wage determination. Although a substantial increase, this new wage still does not represent a living wage for farmworkers, which is rather depressing.
Nevertheless, as Moneyweb reports, the wage increase will be painful for many of the country’s farms. It’s likely, in fact, that a number of farms will be forced to reduce their wage bill by cutting jobs in order to remain viable with wages at this level; as the Department of Labour (DOL) acknowledged in its announcement, “if the average wage increases to more than R104.98 per day, many farms will be unable to cover their operating expenses, and hence not be able to pay back borrowings or to afford entrepreneurs remuneration.”
On the plus side then, under the new rules farm labourers will be better paid, but on the downside, there will likely be fewer of them. It’s interesting to read this news in light of a recent press release from the South African Institute of Race Relations (SAIRR), which reported that the number of domestic workers in South Africa has declined significantly in recent years.
According to the SAIRR, “The number of domestic workers in South Africa has declined from 1 215 000 in 2003 to 1 153 000 in 2012, or by 5%. [The decline is all the more significant] as the number of people in South Africa’s middle classes had increased substantially over the same period; according to Living Standard Measures data, the number of people in the highest living standard category had increased from 1.5m to 2.1m, or by 37% over the same period. Average household incomes have also risen by 113% in nominal terms over the last decade.”
Georgina Alexander, a researcher at the SAIRR, said “The inference is that South Africa’s middle classes are less inclined to employ domestic workers than was the case in past decades. The reasons for this are unknown and have to be left to speculation. However, stricter labour law and minimum wage regulations, security concerns, smaller homes and properties, racial and cultural shifts in the social attitudes of the new middle class, increasing administered prices such as electricity, rates, and fuel bills, and increased household debt levels may all have contributed to the phenomenon.”
Now, what links these two pieces of news is that both speak to a particular emerging phenomenon, namely the slow reduction in the number of formal jobs at the bottom tier of the South African labour market.
Domestic workers and farmworkers are generally unskilled labourers that work very hard and earn very little money. Nevertheless, they have jobs, and these jobs support families and, fundamentally, provide options for people with few marketable skills but a willingness to work. Unfortunately, as wage demands intensify and minimum wages head upwards faster than inflation, such jobs are becoming scarcer – this is the likely result of the new farm workers wage increase.
Overall, this is a worrying trend, because it will mean more and more South Africans leaving the semi-formal, semi-supervised unskilled labour market for the shadowy world of informal, unsupervised, and unprotected work. Being a domestic worker is obviously not glamorous, safe, or easy, but domestic workers do have certain legal protections and benefits that, say, street hawkers do not.
This isn’t to say that it is a bad thing that wages are increasing at the bottom of the labour market. As the DOL pointed out, even households with two adult breadwinners earning R150 a day each (much more than would be earned by, say, a domestic worker and a farmworker) cannot afford an energy-adequate and nutritionally balanced daily food intake on a daily basis. Clearly, such households need additional income support, such as that provided by the child grant.
The point, rather, is that increasing wages past the point that employers can keep paying them has the negative side effect of reducing the number of jobs available. It’s a knotty problem – how can the country increase living standards for unskilled workers without pricing them out of the market? There are no clear answers, yet the question demands urgent attention, because on current policy trends, the bottom of the job market is going to get thinner and thinner, and the army of the unemployed or the marginally employed will continue to grow. - Moneyweb

The increase of the minimum wage for farm workers is a hot topic in South Africa, the main concern being - as outlined in the article above - that farmers will be forced to lay off as much as half of their workforce. Farmers in South Africa simply cannot afford to pay decent wages - nevermind the paltry R2200 (about US$250) per month they will now be required to pay (the poverty line is R3000 per month).

Obviously the government's decision to increase the minimum wage does not solve the problem, it will probably end up making the situation worse. The cost of living and of operating a business is just too high for people to be able to financially support others in a substantial and decent way. So now more people will be without work and the farms will not be running as effectively and efficiently as before, causing many of them to sink into debt and eventual bankruptcy.

We are caught in a vicious cycle and not one of the people in positions of power, who are actually able to promote and implement real solutions to stop the cycle, are actually willing to do so - or even consider that what has been done is ineffective and  just plain wasteful. The problem there is that these people that hold positions of power would like to remain in their positions and probably realise that any real solution would demand equality among all humans and therefore that they would have to relinquish their power. Either that or they simply have no ability to "think outside the box" in order to come up with well thought out plans to solve problems, instead of just shifting the problems around.

Every life should be guaranteed the right to live comfortably within their contributions to society and life on Earth. There should not be a debate as to whether some people should be permitted to having the opportunity to feed themselves and their family properly - this should be a given. Everyone should have enough food. Everyone should have a safe place to live comfortably, with or without others. Everyone should have enough electricity and running, clean water to live comfortably. Every child should go to a school that employs competent and kind teachers who will teach valuable and useful skills that can be applied in life for the betterment of society.

It is clear that finding and working out a solution to these social ills will require unconventional thinking, yet it seems to happen that people who think unconventionally are shunned and dismissed by others for not complying to the apparently golden social standards - the same standards which allow poverty, rape, murder, starvation, illiteracy, abuse, inadequate healthcare and so on. How could we possibly declare that the way we live now is best, when there is so much wrong with life on Earth? The fulfillment of rights should not be up for debate - the fulfillment of rights should not be molded around our misshapen society - our society should be shaped around the fulfillment of rights.

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