If job seekers in South Africa currently had the right to freely enter voluntary contracts with employers at wages and on conditions acceptable to both parties, the country would not have mass unemployment. Figures recently released by Statistics SA confirm the statement by the International Labour Organisation (ILO) that at 29.8 percent South Africa had the highest unemployment rate in the world. At 4.9 percent the USA had the lowest rate.
According to the Q4 figures of 31 December 2022 there were 17.5 million unemployed people, including 4.1 million “discouraged workers” who had ceased looking for employment. Whatever the correct figure might be for the country’s mass unemployment, there is a powerful cause! Such a large proportion of the population does not without a good reason opt out of earning a living.
The way the ‘major cause’ frustrates jobseekers is that it is not imposed on them directly, but on their potential employers. The ’cudgel’ used against all employers is the minimum wage law, which punishes employers if they pay an employee less than the minimum wage. The focus is entirely on the employer; the potential employee has no say in the matter. Gone are the days when young, old, or disabled people could earn a small amount of money while they learned on the job.
The unemployed cannot access jobs because employers are prohibited from entering employment contracts with them on terms and conditions that would be acceptable to all parties, a situation which conflicts with the constitutional rights of the unemployed.
How many such people are there in the country who in the past gave up earnings in exchange for learning skills? Forcibly taking away that option from millions of poor people is tantamount to inflicting a crime upon humanity! Unemployed people are not even given the option to ’opt out’ of the minimum wage which has ostensibly been introduced for their benefit but, in fact, acts as a deterrent to many people!
The minimum wage causes mass unemployment.
The current unemployment rate in the USA is 3.6 percent, compared to 42.6 percent in South Africa. The minimum wage in South Africa is, without doubt, the most formidable barrier facing unemployed people and causes mass unemployment. It is also a serious barrier facing small business.
It is a major cause of suffering and poverty in the country. It is for that reason that the Langeberg Unemployed Forum (with the assistance of the Free Market Foundation) submitted a Complaint to the South African Human Right Commission (SAHRC) in which the negative effect of the minimum wage on the unemployed and small businesses was pointed out to the SAHRC. The human rights of the South African population were being disrespected and so were provisions in the Constitution.
Government fails to protect the unemployed as required by the Bill of Rights.
Those labour laws that have the consequence of depriving the unemployed of their right to freely enter contracts of employment with employers, on terms acceptable to both parties, must necessarily be unconstitutional. The mass unemployment experienced in South Africa today is the direct consequence of the barriers to entry into the job market. These barriers are created by existing labour laws which limit the ability of unemployed persons to exercise their constitutional rights to negotiate their own employment contracts. This situation that is exacerbated by the national minimum wage.
The Bill of Rights is intended to protect vulnerable people such as the unemployed from having their rights abrogated. Legislation and regulations imposed on employers create direct barriers that prevent the unemployed from accessing jobs. The unemployed cannot access jobs because employers are prohibited from entering employment contracts with them on terms and conditions that would be acceptable to all parties, a situation which conflicts with the constitutional rights of the unemployed.
Unemployed people do not receive the constitutional protection to which they are entitled.
The unemployed cannot freely enter voluntary contracts with employers at wages and on conditions acceptable to both parties. Some examples from the Constitution show clearly that the unemployed are being denied their right to enter into mutually beneficial agreements with potential employers.
1. Section 7(1) “enshrines the rights of all people of our country and affirms the democratic values of human dignity … and freedom”. There can be no doubt that the state of unemployment causes a serious infringement of the dignity of the unemployed person concerned. To deny an unemployed person the right to bargain freely with a prospective employer impedes their right to end the indignity of unemployment and prolongs it. Such a denial also infringes on the freedom of the individual.
2. Section 7(2) requires the state to “respect, protect, promote and fulfill the rights in the Bill of Rights”. The state is accordingly under an obligation to do all in its power to end unemployment and to remove the laws and regulations that impede the “right to work”.
3. Section 9 deals with the right to equality – section 9(2) provides for affirmative action: To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken. Many of the unemployed belong to groups “disadvantaged by unfair discrimination,” justifying “legislative and other measures designed to protect or advance them.”
4. Section 9(3) provides that “(t)he State may not unfairly discriminate directly or indirectly against anyone “on one or more grounds, including ….” the labour laws. The minimum wage directly or indirectly discriminates against the unemployed whilst unfairly protecting the employed.
5. Section 10 provides that “Everyone has inherent dignity and the right to have their dignity respected.”
6. Section 11 provides for the right to life. Unemployed persons may literally starve to death and have their health impaired in other ways because of their being denied the right to work.
7. Section 12(1) provides for the right to freedom and security, and both are threatened by unemployment. A law which results in unemployment causes the unemployed to be “treated or punished in a cruel, inhuman or degrading way” Which infringes the provisions of section 12(1)(e). Such a law also infringes on the individual’s “right to bodily and psychological integrity”.
Section 23(1) provides for the “right to fair labour practices”. To effectively prevent someone from selling their labour is unfair.
There is ample evidence contained in the Bill of Rights for a fair assessor to conclude that the unemployed members of the population are not fairly treated by the imposition of the minimum wage legislation. The matter deserves the attention of the Human Rights Commission.
Eustace Davie is a director of the Free Market Foundation.
First appeared in BBrief.
Photo by Anne David via Iwaria.