OPINION: Good Business Basics: Kicking out foreigners won’t fix unemployment issues

There currently exists a strong narrative in this country that expelling foreigners from our shores will, overnight, cure the crippling levels of unemployment that have plagued our economy for many years.

The reality is, that the spectre of unemployment has haunted us long before the influx of foreigners, Covid, or the worldwide economic downturn of a few years ago that was precipitated by the near collapse of the international banking sector.

In the early years of our transition, even while the economy grew at fairly robust levels, we experienced what the economic pundits called ‘jobless growth’.

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This is a clear sign that our economy’s inability to generate the kinds of employment opportunities we dearly require to address the attendant social ills large scale unemployment causes, is due to other factors, some of which I will propose here.

The first, and probably the biggest, elephant in the room is the issue of productivity.

This is very much considered a swear word by organised labour and, very rarely if ever, features in bargaining sessions.

Year after year global rankings place our national productivity levels in the lowest quartiles.

While our education system, with all its attendant, well documented shortcomings, is a major factor, one must acknowledge others such as chronic absenteeism and the misuse of sick leave, all of which feed into the perception of our poor work ethic.

Secondly, as much as our current labour laws have addressed the rampant trampling of workers’ rights during the apartheid era, there is a strong argument to be made that the pendulum has swung too far, with the rights of employees trumping those of employers, whereas equilibrium is ideal.

The upshot of these two factors alone is that even when employers have the capacity to take on more staff, the decision is balanced against the route to greater mechanisation or automation, particularly in the industrial and manufacturing sector.

The evidence of this is apparent in the mining sector, where mines have invested heavily in automated equipment, not just to increase yields, but also to mitigate the cost and management of large workforces.

The final factor is that social and government factors have compelled our industries to employ more people than are strictly required to run organisations efficiently.

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The added burden is that the top-heavy structure of our management models has resulted in most of these ‘surplus’ employees residing in senior and middle management roles.

Recent analysis in, particularly, SOEs such as Eskom and the SABC have brought these to the fore.

Without an honest interrogation of our economic and social structures, the unemployment problem will continue to find easy scapegoats in the form of foreigners, white monopoly capital, and some other pandemic.

Vijay Naidoo is the CEO of the Port Shepstone Business Forum. He writes in his personal capacity. The views expressed are the author’s own and do not necessarily reflect those of this publication.

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