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This chapter has highlighted two trends in the post-apartheid labour market: its failure to address major socioeconomic challenges and the inefficiency of collective bargaining for protecting workers, combined with the weakness of direct state intervention in the labour market. The progressive restructuring of labour relations, starting with the creation of decent work opportunities for the majority of South Africans, has turned out to be a pipedream. Instead, the labour market has, like the economy and the state, been restructured in a neoliberal way which has entrenched the structural inequality between capital and labour (Segatti and Pons-Vignon 2013). Under apartheid, state power had been mobilised to advance the interests of capital. ‘Liberalisation’ – actively supported by the state before and after 1994 – has generated an even more unequal relationship by allowing capital to leave the country and leverage high unemployment to undermine the workplace strength of labour. The protection promised by post-apartheid labour law hinged on the existence of strong trade unions, which would have been able to advance the interests of workers through bargaining councils, but even if workers have benefited from the new legislation in some sectors, the increase in atypical employment has eroded trade union power and their ability to take advantage of it.

Our contention, therefore, is that labour market restructuring in a context of economic liberalisation has benefited capital. The failure of a strong and militant trade union movement (with a few exceptions) to counter these moves is an uneasy reality for many. Macun (in this volume) suggests that unions’ organisational power and democratic control have been undermined in the post-apartheid era. This lies at the heart of the broader failure of trade unions to advance the interests of labour as a class – an unexpected outcome after twenty years of democracy – and yet the mobilisation of mine and farmworkers signals that many workers, including those whose power may seem very limited, are willing to take up the struggle against capital. The re-building of labour’s power in South Africa will pivot on the ability of progressive forces to (re)connect with workplace activism.

Such outcomes are however all but unavoidable. In Brazil, after a brutal setback driven by neoliberal forces in the 1990s (with the Real Plan of 1994 mirroring GEAR), a labour-supported government has achieved an impressive reduction in poverty and inequality. This, according to Baltar et al. (2010), can be attributed to ‘minimum wage revaluation policy, social security, income transfers and improved wage bargaining’. The authors show that from 2004 onwards bargaining outcomes improved, entailing an increase in the wage share of value added. This is not surprising, and coherent with a ‘relational’ understanding of poverty (Oya op.cit.): when labour as a class reaps more benefits from growth than capital, inequality and poverty decrease. The Brazilian experience shows the need for state intervention to limit casualisation and increase minimum wages (and ensure they are applied), supported by trade unions strongly rooted in workplaces and able to bargain for better wages.

The South African labour market presents a major analytical challenge. Why does employment intensity remain so low, in spite of very high unemployment (surplus labour) and evidence of a very flexible (or casual) labour market? In other words, why do employers not employ more people, especially in unskilled jobs, since cheap workers are widely available? It is unlikely that such questions can be answered with the limited tools of neoclassical economics; they will require a political economy approach which takes class (and class struggle) seriously. We hope that this chapter will help discard some of the myths surrounding the labour market, and encourage research which explores the heart of the matter, away from simplistic suggestions that ‘fixing education’ or making the labour market even more flexible than it is could be solutions to poverty.

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NOTES

1 Thanks to John Sender and Claire Benit-Gbaffou for comments on earlier drafts.

2 This is the same argument which Amsden (2010) makes in her critique of strategies inspired by Say’s law, according to which supply (in this case of skilled workers) creates its own demand, which argue for education or micro-credit as silver bullet solutions to unemployment and poverty.

3 The tendency to over-estimate self-employment (and under-estimate wage employment, especially of a casual nature) has been documented by Oya (2013) in relation to most African and aid donor statistics.

4 Privatised services often curtail access for the poor (Dugard 2013), while service delivery by ‘New Public Management’-restructured state agencies or hospitals has overall been ineffective (Von Holdt 2010; Tshandu and Kariuki 2010).

5 This is very significant in a context of high dependency ratios, which is a direct consequence of high unemployment and a social grant system which barely covers able-bodied adults.

6 The EEC is not directly involved in research but typically outsources it, sometimes resulting in serious misrepresentation of issues, as in the case of forestry (Pons-Vignon, forthcoming). Radically different proposals were made in the MERG report (1993) for the establishment of sectoral wage boards, staffed with qualified researchers, and tasked with the establishment of minimum wages and monitoring of employment in different sectors.

7 Von Holdt (2003) shows how ‘disobedient’ black workers could be punished either for ignoring an order from a white colleague, or for obeying it when this order diverted them from their task.

8 Sectoral determinations can be found online at: www.labour.gov.za/legislation/sectoral-determinations/sectoral-determination.

9 One can wonder whether, beyond some isolated initiatives, there was ever any serious intent in Cosatu to recruit and organise poor workers in sectors such as agriculture or domestic work.