The South African Labour Market

The South African labour market has performed extremely badly in recent years in terms of creating employment. In the second half of the 1980s, for example, only 7 per cent of school-leavers could expect to find formal sector jobs. This has meant that increasing numbers have had to enter the informal sector in order to eke out some sort of a living. It has been estimated that average income in the informal sector was under R500 per month in 1989 as against R830 for Africans in the non-primary modern sector. Moreover, the distribution of income in the informal sector was highly skewed, with 27 per cent earning less than R150 and 44 per cent less than R250 per month. Taking into account also poor working conditions and insecurity, it is safe to assume that the majority would have preferred formal sector jobs. It should also be borne in mind that the informal sector includes criminal activities such as car theft and drug peddling, and that many of those drawn into these areas may be permanently lost to society as productive contributors to its net wealth. The poor performance of the labour market, therefore, has meant the economic marginalisation of an increasing proportion of the population. Dealing with this problem, and preventing its further growth, is perhaps the most serious challenge facing South Africa today. Without a solution, even Pacific Rim-type growth will at best provide the means to buy off the discontented and disillusioned masses with hand-outs of various types. Without such growth, the future is bleak indeed.