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An unemployment reality check

The impact of behaviour on the unemployment crisis.

We have become a nation of takers. Without recognising this we will not be able to fully understand the true nature of our persistent unemployment crisis.

It is simple logic that when people by and large are taking more than they are contributing they create deficits and poverty. Conversely, when they contribute more than they are taking they create a surplus and prosperity. And prosperity  in turn, according to long-standing research, is sustained by having an external focus and developing people.

These principles are not based on any ideological premise but on sound and well known practice and experience. At best, systems can encourage or discourage certain behaviours, but they are not the root cause of them. More importantly is that behaviour has to rest on appropriate universal values and moral convictions.

Sentiment driven by faith, courage and conviction is far stronger and more sustainable than that driven by fear and insecurity.

The evidence is everywhere

Evidence of our taking behaviour is blatantly apparent. It is reflected foremost in our triple deficits of the budget, trade and trust. The latter is paramount and is the result of taking behaviour on the many fronts that we are beating our chests about: a bloated, self-serving and wasteful bureaucracy; corruption; state capture; crime; violent protests; poor service delivery; state-owned enterprise mismanagement; customer neglect; strikes; anti-competitive practices; tax evasion; capital flight and many more.

While it may be tempting to ascribe the parasitic nature of our economic behaviour to the dawn of democracy, notably the Zuma years, it goes back many decades earlier. We have largely been a commodity based economy able to rely on raw material and precious metal exports to sustain a significant part of our GDP. As is the case with many commodity exporters, this is a curse in disguise, often leading to severe neglect of the most important principle of all in economic wellbeing: that of developing people.

That in turn led to stark wealth disparities and structural imbalances, including failure to develop strong export-orientated manufacturing and service sectors. In addition, it made us extremely vulnerable to the whims of international markets, where volatility and financial crises have an inordinate impact on our inflexible construct. We are still feeling the effects of the financial crisis that happened a decade ago – more so than many other developing countries – and remain defenceless to another crisis which many believe is just around the corner. This has been signalled strongly with the gold price at six-year highs and above $1 500 per ounce, and crypto currencies increasingly gaining favour as safe haven instruments.

The impact of inflated expectations

The dawn of democracy gave us a window of opportunity to develop a more diverse economy with a globally recognised iconic leader in Nelson Mandela, the lifting of sanctions, and many foreign helping hands. But it was soon closed by highly inflated expectations exacerbated by wealth disparities, and excessive demands where the economy and enterprises were viewed simply as hosts for parasitic activities rather than an empowering opportunity to make a contribution to others.

Expectations encourage taking behaviour and tend to counter aspirations which underpin contributing behaviour.

After the release of the shocking unemployment figures, the national discourse has been bordering on despair, although Citadel has noted some rebound in foreign direct investment.

Solutions are sought mostly in structure, policies, investment, and stakeholder cooperation: all valid but mostly missing the critical element of changing behaviour. The former relate mainly to creating means and ability for gainful employment. But they neglect the importance of willingness, without which means and ability are pointless.

Willingness

To be sure too many simply don’t have the means and ability to be gainfully employed, making it difficult to determine the extent of a lack of willingness in this group. They are victims rather than perpetrators. But most are employed and the extent of willingness in the workplace is a critical factor.

Too many across all levels see employment and their positions not as an opportunity to make a contribution and express the best of themselves, but as a place of getting purely for self-gain.

This has been exacerbated by executive pay, poor human resource practices, the commodity expression of labour, counterproductive labour legislation, lack of a common purpose, inflexibility in wealth distribution, and of course organised labour’s own agitation and extortionist behaviour.

Willingness comes from a deeper conviction and a shared inspiration.

I have no doubt we have what it takes. We are rapidly being driven to that point, but the longer it takes the more we will suffer in the interim and the greater the task of rebuilding. I have written many columns on how paradigms can be shifted relatively easily and quickly.

Read: Inclusivity: the Possible Dream

To summarise: we have to make the economy work for all. That can only happen if we view it as a superb construct that helps us to serve each other and not purely the self.

Those engaged in toxic political intrigue must know they are doing their obscene war dances to the drumbeat of hopelessness and despair of millions.

Because the situation we are in rests so heavily on paradigms, we can turn things around pretty quickly by shifting those paradigms. We should come back to one profound maxim: that our true value lies in our capacity to make a contribution to others. That contains a magnificent paradox that the more we practice it the more self-serving it becomes.

But making that the purpose in itself destroys the moment.

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Nope, SA didn’t fail to industrialize. Ever heard of Hendrik van der Bijl, Mr Schuitema? South Africa had far more manufacturing industries back then than it does now. In the 1980s, the industrial contribution to GDP was 27%. This was in spite of a trade embargo, sanctions and the country being at war. The contribution of manufacturing is now below 13% and falling. One would have expected the opposite when the sanctions disappeared, but just like almost every other aspect of the economy, the Marxist ANC and its communist trade union allies have proved themselves to be a swarm of locusts; only capable of destroying.

Agreed.

All the current regime is good for is getting a slice of someone else’s pie. No ability to create another or more pies.

Good point and what happened after 1994 was depressing enough to immediately point me to emigration (twice) that only family opposition stopped. Truth was and is that SA’s pre 1994 was somewhat artificial and tariff protected BUT could have set the scene or provided the foundation for massive expansion and re-focus. Let’s face it; we were never going to beat China, India, Taiwan, Malaysia and S Korea on a world stage. BUT, into Africa, SA had massive opportunity for investment and the selling of competitive services and products.

But what the ANC didn’t bungle they stole. In my view, keeping protected and subsidised industries like steel, sugar, timber, vehicles and fuel in place, unchanged, was always going to be a dead end. There was never encouragement to innovate or evolve. African markets were never protected by the ANC who sided with their looting mates to cripple potential gems like Zim.

Now it is too late.

The unions have caught the bus, now it is clear they cannot protect jobs or create jobs. Socialists hate business, money (business) leaves first because of this hatred, nett result poverty worse than before.

The system of socialism or collectivism is built on the idea that the value of the individual is measured by his contributions to the group. This political-economic system is supposed to bring equal benefits and prosperity to all. The South African experiment confirms old data, that this system benefits only the unscrupulous minority to the detriment of the masses. This is because this system incentivises the exploitation of common resources and punishes ethical behaviour. In this system, individuals can only become wealthy if they plunder the common resource and abuse their power. The only road to riches for individuals from this group is to monetize their position of power, also called extortion. The most unscrupulous individuals build a power base in their community and use it to gain a position at an SOE or municipality. Once they reach that position, they immediately begin to monetise their power by extorting bribes and paybacks. This is exactly what BEE is. When the ANC attained political power, they monetized that power to extort equity from businesses. They contribute and build nothing, while their parasitic behaviour destroys all national assets.

The opposite system, the so-called “evil and exploitative” system of free-market capitalism actually does reward individuals for their contributions to society. In this system, individuals can only become wealthy if they satisfy the needs of the consumer with the best product or service at the best price. People acting in their own “selfish” interest, are rewarded by society, for the way they improve and benefit that society. This system respects law and order, incentivizes responsible behaviour and enforces accountability by means of the property rights of the individual.

It is quite interesting that collectivism, the system that is theoretically supposed to benefit the group, does the exact opposite in practice, while the free-market system that in theory, exploits society, in fact, makes huge contributions to the general levels of wealth.

We are heading for a socio-economic catastrophe in South Africa because we are clinging to the wrong political-economic system. A system that promises equality but deliveres poverty and famine.

From the people who brought you Jacob Zuma, state capture, 0.7% growth, Julius Malema, 40% unemployment, worst education outcomes, undrinkable water, 17 million grant beneficiaries, trillions stolen, Eskom, and zero accountability comes National Health Insurance.

ANC universal healthcare = worst healthcare in the universe.

the NHI is actually a Joke. Once the IMF arrives then the ANC will be dead. yes we can even use the shared Value Model developed by Michael porter where sustainability of an enterprise is linked to profits. We notably see our heavy reliance on fossil fuels and we can see the global climate changing frequently. We have Eskom as a massive polluter to the environment. We do not even build or let alone empower communities to be self sufficient. instead we celebrate that citizens 17 million and more are reliant on grants, we have a housing crisis, we have a medical crisis, educational crisis etc. the services industry worldwide is booming and what did SA do instead of using its links and sharing value and opening markets so innovation can be met we instead follow the sheep-less leadership. Everyone banked on the New Dawn and guess what we are now heading worse off than JZ in the shortest term ever. Once the IMF arrives this government will not be able to survive the onslaught of the IMF.

You underestimate the ANC’s addiction to power and patronage. The party will never bow to the IMF and will first drain pensions and other savings, and then fire up diesel powered money printing presses.

We are heading for full Zimbabwe.

On NHI, it is unlikely to be implemented in the near future due to a number of legal and other challenges. That delay however will not be enough to suspend the additional taxes earmarked for this folly – or to dissuade GPs and specialists from emigrating.

Profmed, the medical scheme to which most medical professionals in private practice belong, will lose 30% of these members this year alone.

Apart from extra taxes to fund NHI the ANC intends to make “appropriations”: translated this means the expropriation of medical aid reserves.

Another question, how will the medical profession attract the best and brightest to study six or more years with the only prospect of employment that of a slave to an insolvent NHI?

Even worse we have the stupid unions dictating labour matters, did SA not learn from Margaret Thatcher era, what happened to the UK after banishing unions, cutting public debt and wasteful expenditure, opening up markets and increasing taxes domestically to strengthen the currency and make the currency affordable as many foreigners find it worthwhile investing into as domestic markets are improving. SA could not even consider this structure. We have anti competitive labour laws a shrude union that always seeks blood and fruitless citizens who cannot see the bigger picture. The power struggle all boils down to Rational Egoism theory brought and discussed by many philanthropists manifests itself in today in SA. Henry Sidgwick brought this amongst many of his teachings – RE Rational egoism (also called rational selfishness) is the principle that an action is rational if and only if it maximizes one’s self-interest. The view is a normative form of egoism. This is the current explanation of the exact leadership that runs and have ruined this country and taken it literally to the ground

“It is simple logic that when people by and large are taking more than they are contributing they create deficits and poverty. Conversely, when they contribute more than they are taking they create a surplus and prosperity”…

The wisest words i have ever hear in a long time, since “Babylon”…. this holds true to all the peoples of the world… It starts with you, if you understand that, teach your siblings, your friends, your children and your village will be better of and the country will prosper…. But this is not the time for philosophy…

Glad to see no-one made any comments surrounded by negativity.
We’re merely REALISTS.

Another reality (not to be seen as negative): increasing unemployment, will lead to severely escalating crime down the road (as if its not bad already), leading to reduced business confidence…which leads to…err…more unemployment!

But hey, South Africa is merely in a longterm structural decline, since colonial times. “Dinge gaan (ongelukkig) nie regkom nie”. Unemployment is normal for Africa..why should SA be different? SA is readjusting to the mean-average representing Africa. Thank goodness for NHI…another nail in the coffin for a western, developed nation.

We have the highest unemployment levels in the world, not because of population growth or negative economic growth, but because we use labour laws and the minimum wage to create a mismatch between the supply of labour and the demand for labour. Labour laws ensure unemployment by raising the price of skills above the demand for skills. These strategies are clearly not sustainable. For each person with a job, we have 5 people who are priced out of jobs. These jobless individuals have zero human rights because the law prohibits them from selling their labour at a fair price.

We can have full employment within one year if we lower the cost of labour to reflect the value of labour as defined by the supply of labour relative to the demand for labour.

South Africans diligently execute strategies that ensure record unemployment. We plan to have unemployment, then we execute unemployment strategies by enforcing the gap between supply and demand by destroying demand with labour laws. Our entire government and political systems are focussed on maximising unemployment.

According to international stats, we are the best in the world at this endeavour. We are the world leaders at destroying the demand for labour. We even have a name for this team that beats all the world records in unemployment. They are called the Tripartite Alliance, on par with Bafana-Bafana, the world leaders at losing.

100%

We have the biggest fake shortage of labour in the world

Yes I agree yes and the government does get it wrong the the supply of labour is priced high that is why government constantly gets it wrong. we need skilled labour to build and construct but no instead we do not want to cut bloated workforces across the industries because the TP Alliance does not favour that. think of eskom once we trim the fat 70% must go and you will be left with skilled people that are willing and can build the company to its glory. Government hold a Job Summit for what I have no idea. No institutional investor would want to be exposed to horrid labour laws because every foreign company that enters SA would set up shop here to increase supply of what the demand is for. Now if there is no demand for labour then the government produces programmes that would increase supply but kill the demand. We do not need unskilled people to do skilled jobs we need skilled people to do skilled jobs. Currently the unemployment is reveresed because government feels that by having more youth perform a basic skill so will that assist in the demand of that skill. NO freaking ways it is distorting. We need to produce people that study to impact and acquire skills to impact society now everyone wants to claim unemployment but yet the MO is to be self sufficient. Skilled people are leaving because of the over supply of labour the government has to fill up areas fro friends family etc which results increasing unemployment and destructive policies.

Ja Sensei I concur. For 30 Years I have worked in the labour intensive industry known as mining.
The average South African born Black persons do not actually want to work and have to be coerced into action.
Persons from Zimbabwe, Mozambique Swaziland and Lesotho are way more productive and reliable in comparison.
Not only do we have a huge unemployment problem it is also exacerbated by attitude of jobbing and self entitlement prevalent in the SA workforce.!!!

Government employees are eating the poor peoples lunch. SA government employees are overpaid by a third, according to world standards (economist Mike Schussler).

During Apartheid government officials were paid less than the private sector – now, considerably more.

This article contains truth and logic – neither will be welcomed, or even considered by our revolutionary masters in the ANC/EFF/SACP/COSATU. The past 25 years has been about restitution, not restoration. The next 25 will be the same because there simply is no such thing as a functioning democracy in Africa.

“To be sure too many simply don’t have the means and ability to be gainfully employed, making it difficult to determine the extent of a lack of willingness in this group”

But the biggest group of “takers” are — as revealed by various Omissions of Inquiry — those in government or deployed into “civil” servant sinecures; the nomenklatura.

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