Creation of unskilled jobs – decentralise & deregulate ? (J Yudelowitz)

“The inability to create unskilled jobs is one of the main barriers to SA’s social and economic viability.   Well-paid pundits’ solutions to this problem are thwarted by their own ideologies, assumptions and politics.

Some entrepreneurs, supported by their workers, have created viable clothing businesses and jobs, yet have been punished by the clothing sector labour council, which has served notice on 400 clothing manufacturers that don’t comply with its minimum wages and working conditions”.

Jonathan Yudelowitz, joint MD of YSA and author of Smart Leadership, has an important article in today’s issue of Business Day – ‘One size fits all’ law robs SA of a future in which he argues that “the inability to create unskilled jobs is one of the main barriers to SA’s social and economic viability”.

Once again the whole article should be read but here are some extracts:

Decent jobs or no jobs ?

“According to the National Bargaining Council for the clothing manufacturing industry, the workers’ jobs are not “decent” and are underpaid.   Defying the bargaining council by choosing to work for the wages offered, the workers have shown that they know what’s best for them – that the dignity of having a job and being able to provide for self and family, is much more important than a sectoral wage agreement or employment regulation in which they have no say”.

Effect of centrally negotiated agreements

“Centrally negotiated agreements ignore specific circumstances and, if properly implemented, destroy the opportunity to earn a living.   They raise the cost of doing business and create artificial barriers to entry by, among other things, forcing rural employers to match wages in urban areas where the cost of living is higher“.

“The assumption by unions that workers’ rights can be protected only by sector-level bargaining is rubbish, especially in the apparel industry, where margins have declined in the face of eastern imports”.

Collusion between employers and trade unions

“Centralised bargaining is a form of collusion, as it removes labour productivity and cost from the mix of manufacturers’ competitive factors – particularly in labour intensive industries such as the clothing sector”.

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