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THERE'S an onslaught of stifling labour legislation facing the private sector, in what the South African Institute of Race Relations accurately describes as "the ANC's war on jobs".
We already have one of the world's most restrictive frameworks of labour legislation. We're near the bottom of several indices in the World Economic Forum's Global Competitiveness index. We rank 135 out of 139 countries surveyed for hiring and firing procedures.
In flexibility of wage determination, we rank at 131 and for pay and productivity at 112. That's hardly a promising scenario and appears to fly in the face of President Jacob Zuma's grandiose promise of 5 million new jobs over the next decade.
It's a well-known economic fact that rigid labour markets discourage job creation. It isn't difficult to grasp why that is so, particularly in the case of small businesses, which are always and everywhere by far the largest job creators.
Big business, as the Standard Bank recently demonstrated, is able to shed staff rapidly as it sets about cutting costs. Big business also responds to technology changes that enhance productivity and reduce the need for human hands.
When your ancient scribe was CEO of a major Australian newspaper group, he inherited a staff of 5 200 and a printing plant 60 years old and highly labour-intensive. There was no option but to buy new presses and equipment while generous terms - including finance to retrain or start new businesses - were offered by the company and the government to those whose skills were no longer needed.
Predictably, there were strikes - although we didn't lose any editions - and damage was inflicted, such as throwing metal scraps on to the presses while they were running. In the end the head count was reduced to 2 000 and the business survived and prospered. Many of the printers who left started their own small businesses, becoming employers themselves.
Statistics from the dynamic Small Business Administration (SBA) in the United States tell the story. There small business represents 99.7% of all employer firms, employs well over half of all private sector employees, pays almost half of the total US private payroll, creates 70% of net new jobs, generates more than half of non-farm gross domestic profit, employs almost half of all hi-tech workers and makes up more than 97% of exporters, with over 30% of total US exports.
The list goes on but the message is clear: don't expect big business to create jobs. It isn't going to happen. Ebrahim Patel, our minister charged with growing the economy and creating jobs, should board the next jet for Washington and visit the SBA.
Transform without destroying
It's amazing how generous the Americans are. They'd probably lend us experts in small business creation to train our folks here. However, one fears the ANC - with its touching, collectivist faith in large, unwieldy mechanisms such as our metro cities - will look to big business first in its job creation drive.
In addition to stifling growth via unyielding labour barriers, it appears the state wishes the private sector to work a miracle and transform the ratios in all sectors so that 87% of jobs are filled by black Africans.
According to the Commission for Employment Equity, that's to be done as soon as possible - regardless, apparently, of the reality there are just not sufficient numbers of black people with the requisite skills, no matter what Jimmy Manyi says.
It must also been remembered black South Africans are a very young group, with few even of an age to fill highly skilled and demanding positions.
Currently, more than 87% of SA Airways' pilots are white and 5% black. To turn that ratio on its head will take generations. In accounting, which works hard at transformation, 83% are white and 5.8% black. A similar picture no doubt prevails in areas such as air traffic control, medicine, architecture and so on.
We must change all that but not destroy what we have in the process - which requires patience and, above all, good education. And flexible labour laws.
We already have one of the world's most restrictive frameworks of labour legislation. We're near the bottom of several indices in the World Economic Forum's Global Competitiveness index. We rank 135 out of 139 countries surveyed for hiring and firing procedures.
In flexibility of wage determination, we rank at 131 and for pay and productivity at 112. That's hardly a promising scenario and appears to fly in the face of President Jacob Zuma's grandiose promise of 5 million new jobs over the next decade.
It's a well-known economic fact that rigid labour markets discourage job creation. It isn't difficult to grasp why that is so, particularly in the case of small businesses, which are always and everywhere by far the largest job creators.
Big business, as the Standard Bank recently demonstrated, is able to shed staff rapidly as it sets about cutting costs. Big business also responds to technology changes that enhance productivity and reduce the need for human hands.
When your ancient scribe was CEO of a major Australian newspaper group, he inherited a staff of 5 200 and a printing plant 60 years old and highly labour-intensive. There was no option but to buy new presses and equipment while generous terms - including finance to retrain or start new businesses - were offered by the company and the government to those whose skills were no longer needed.
Predictably, there were strikes - although we didn't lose any editions - and damage was inflicted, such as throwing metal scraps on to the presses while they were running. In the end the head count was reduced to 2 000 and the business survived and prospered. Many of the printers who left started their own small businesses, becoming employers themselves.
Statistics from the dynamic Small Business Administration (SBA) in the United States tell the story. There small business represents 99.7% of all employer firms, employs well over half of all private sector employees, pays almost half of the total US private payroll, creates 70% of net new jobs, generates more than half of non-farm gross domestic profit, employs almost half of all hi-tech workers and makes up more than 97% of exporters, with over 30% of total US exports.
The list goes on but the message is clear: don't expect big business to create jobs. It isn't going to happen. Ebrahim Patel, our minister charged with growing the economy and creating jobs, should board the next jet for Washington and visit the SBA.
Transform without destroying
It's amazing how generous the Americans are. They'd probably lend us experts in small business creation to train our folks here. However, one fears the ANC - with its touching, collectivist faith in large, unwieldy mechanisms such as our metro cities - will look to big business first in its job creation drive.
In addition to stifling growth via unyielding labour barriers, it appears the state wishes the private sector to work a miracle and transform the ratios in all sectors so that 87% of jobs are filled by black Africans.
According to the Commission for Employment Equity, that's to be done as soon as possible - regardless, apparently, of the reality there are just not sufficient numbers of black people with the requisite skills, no matter what Jimmy Manyi says.
It must also been remembered black South Africans are a very young group, with few even of an age to fill highly skilled and demanding positions.
Currently, more than 87% of SA Airways' pilots are white and 5% black. To turn that ratio on its head will take generations. In accounting, which works hard at transformation, 83% are white and 5.8% black. A similar picture no doubt prevails in areas such as air traffic control, medicine, architecture and so on.
We must change all that but not destroy what we have in the process - which requires patience and, above all, good education. And flexible labour laws.
