Towards employment-intensive growth in South Africa

Since the great triumph of South Africa’s democratic transition, there have been many achievements; but there have also been many disappointments. Without doubt, the greatest failing has been the lack of progress in addressing poverty and inequality. The main culprit has, in turn, been massive and growing unemployment. With an official unemployment rate of 25%, South Africa is a complete outlier among developed and developing countries. High unemployment underpins extreme poverty and inequality and is a major contributor to social dislocation. Unemployed human resources on this scale also constitute a major drag on growth.

In a country with substantial resources and a government which claims to be serious about addressing the issue, this lack of progress is not only troubling but puzzling. Much more rapid growth is clearly essential, but is it enough? This book argues that growth has to be more employment intensive. If we optimistically assume an annual growth rate of, say, 4%, it will make a big difference whether employment grows at 1%, 2% or 3%. A key message of the book is that specific attention must be paid to raising the employment density of growth.

The volume brings together 25 leading economists and other social scientists from South Africa and abroad. They present a penetrating analysis of the unemployment problem, as well as proposals to deal with it. Their contributions provide an overview of employment issues, internationally and domestically, and address the impact of the structure of the economy on unemployment. Particular attention is paid to rural communities and the manufacturing sector, as well as to specific policies such as wage subsidies and public-employment programmes.