South Africa Employment and Labor

South Africa Country Studies index

South Africa - Employment and Labor

The interlinked challenges of economic recovery and educational reorganization presented the new government with an intractable dilemma in 1994. Educational reform would require significant increased spending in an expanding economy, but, at the same time, economic growth would require a more highly skilled work force and educational reforms. The government approach to these challenges was deliberate and careful, and attempted with foreign donor assistance to convince those who were uneducated and unemployed that some of the benefits of ending apartheid would be seen during their lifetime. Officials sought international assistance in providing on-the-job training for workers in many industries and in speeding the pace of reforms, but by late 1995, only a few new programs were being implemented.

Education and Employment

The Bantu Education Act (No. 47) of 1953 helped pave the way for labor strife in the 1980s and the 1990s by institutionalizing a plan to restrict black workers to low-paid jobs through deliberately inferior education (see Education, ch. 2). During the 1960s and 1970s, per capita spending on white pupils was about ten times greater than educational spending on black pupils. By the early 1990s, the gap had been reduced by half, but in general, standards for teacher qualifications and facilities in black schools continued to be inferior to those in white schools.

The economic costs of implementing and enforcing apartheid sky-rocketed in the 1980s. Black poverty deprived South African businesses and manufacturers of a sizable domestic market. Even more ominous for the future, it became clear that South Africa lacked the necessary skilled personnel to maintain growth in its manufacturing enterprises, and millions of South African workers were unqualified for anything but the lowest-paid jobs.

Foreign workers have been an important segment of the industrial work force. In 1994 the government estimated that between 1 million and 1.2 million workers from Botswana, Lesotho, Malawi, Mozambique, and Swaziland were legally employed in South Africa--most on temporary contracts in the mines or urban industries. In addition, as many as 2 million foreign workers were believed to be self-employed or working illegally in South Africa in 1995, according to minister of home affairs Gatsha Buthelezi. Foreign workers were sometimes subject to immediate layoffs or discriminatory treatment at the hands of management or fellow employees, and in 1996, they faced the threat of new restrictions on their being hired.

By the early 1990s, however, both labor and government leaders were alarmed over the violence that had erupted during some labor actions. Violence had been part of labor's history of confrontation; some employers used force to suppress labor militancy, and strikers often used violence against nonstriking workers. But the scale of labor violence increased sharply, and the often-repressive police response also contributed to the destruction. In one of South Africa's most violent strikes--at a gold mine near Welkom, in the Orange Free State--more than eighty miners died in clashes between strikers and nonstrikers in 1991. Like many other violent strikes, this clash initially concerned economic issues, but it escalated because of political, ethnic, and racial grievances.

Throughout South Africa's industrial history, workers of all races organized to demand better wages and working conditions, but through the early 1980s, almost all union leaders were white. This was true in part because some employers refused to negotiate with black representatives and because of legal restrictions on black labor organizations. The Industrial Conciliation Act of 1924, which governed many aspects of labor relations, redefined the term, employee , to exclude most blacks; the definition was amended by the Native Labour (Settlement of Disputes) Act (No. 48) of 1953 to exclude all blacks, thereby depriving them of any labor law protection.

Business and labor leaders agreed that confrontations with labor contributed to rising business costs during the 1980s and the early 1990s. The number of workdays lost to work stoppages rose from 175,000 in 1980 to 5.8 million in 1987. Lost workdays per year declined in the late 1980s, but labor actions still extracted high costs from business by slowing operations, by intimidating investors, and by destroying property. Among the most costly actions were those by transport workers, whose services were vital to all sectors of the economy. South Africa's ability to compete globally was also affected by labor militancy, in part because, officials estimated, a worker's cost to employers in 1994--including wages and benefits--averaged US$5 an hour in South Africa, or double the average labor costs in Mexico or Brazil and more than five times the average labor cost in China.

In 1994, with 194 legally recognized labor unions in the country, the government extended labor law protection to domestic workers for the first time. Initially, this meant recognizing their 70,000-member domestic workers' organization as a union and granting its members rights such as sick leave and on-the-job lunch breaks for the first time. Several COSATU-affiliated unions launched membership drives among domestic workers in 1995 and 1996, and they promised to work for the introduction of a legal minimum wage and access to literacy classes and other forms of vocational training for the large domestic work force.

Employment and labor

Agricultural employment in the formal economy declined beginning in the 1970s, reflecting the trends toward mechanization in agriculture and increasing urbanization. During that time, the government also changed its definition of agricultural employment to exclude many farmers who owned small plots of land and produced primarily for subsistence or for local markets. Impressive growth in the services sector--including trade, finance, insurance, restaurants, hotels, and other business and social services--accounted for most of the jobs created during the 1980s and the early 1990s. The services sector also included the country's large domestic work force, estimated at more than 800,000 in the early 1990s.

Union militancy contributed to labor successes. Real wages for black manufacturing workers rose an average of 29 percent between 1985 and 1990. Overall wage increases, outside agriculture, rose by 11 percent during 1985 alone, and this annual rate of increase accelerated to 17 percent in 1990.

Labor and Politics

Even before apartheid restrictions were imposed during the 1950s, government policies, rather than market principles, determined many aspects of labor-management relations. From the 1950s until the early 1990s, black workers suffered systematic discrimination. Apartheid legislation authorized the "reservation" of many skilled jobs and managerial positions for whites; qualified blacks were legally excluded from most senior-level jobs, but black education standards were so inferior to those for whites that few blacks were qualified for well-paid jobs. Even in equivalent job categories, blacks received lower wages than whites. Although white workers were divided in their racial attitudes throughout the apartheid era, they often opposed benefits for black workers that could threaten their own economic standing.

The largest organizing effort among black workers resulted in the establishment of the Congress of South African Trade Unions (COSATU) in 1985. An umbrella organization of more than a dozen unions, COSATU had a total of 1.3 million members by 1990. COSATU affiliated with the African National Congress (ANC) and the South African Communist Party (SACP), both of which were banned. In addition to winning major financial concessions for its members, COSATU became the effective mobilizing arm of the ANC and the SACP. COSATU's two largest labor rivals were the National Council of Trade Unions (Nactu), a blacks-only confederation that rejected multiracial membership, and the United Workers' Union of South Africa (UWUSA), which was affiliated with the Zulu-based Inkatha Freedom Party (IFP).

In 1994 and 1995, officials revised employment statistics to incorporate into national accounts employment in the former black homelands--which were home to almost one-half of the black South African population. With these revisions, the government estimated the national work force in mid-1995 at 14.3 million people. Unemployment statistics also were being revised to incorporate workers outside the formal economy. In 1995 the government estimated unemployment at 32.6 percent. Unofficial estimates ranged to 40 percent or higher, and officials acknowledged that the rate was as high as 47 percent in some rural areas.

Three other large unions led the labor movement in the number of strikes called during the early 1990s. These were the National Education, Health, and Allied Workers' Union; the Transport and General Workers' Union; and the Food and Allied Workers' Union. Even workers in small companies were becoming more militant; during the early 1990s, more than 40 percent of all strikes involved 200 or fewer employees.

In the early 1990s, COSATU's largest and most militant unions were the National Union of Metalworkers of South Africa (NUMSA) and the National Union of Mineworkers (NUM), each with more than 300,000 members. NUMSA's actions cost automobile manufacturers and related industries more workdays than any other union in 1993 and 1994. NUMSA threatened even more costly labor actions in the future if auto workers' wage increases did not accelerate.

South Africa's Education Foundation, a respected private research organization, estimated in 1991 that unemployment among unskilled and uneducated workers would increase during the 1990s, and that at least 500,000 skilled jobs and managerial positions were likely to remain unfilled, unless foreign workers were hired to fill them. The government's National Manpower Commission confirmed these bleak estimates in 1992, adding to the political pressure to end apartheid, especially in education.

More about the Economy of South Africa.

The distribution of labor continued to change in the 1990s, in response to global and regional market factors and political change in South Africa. For example, despite the importance of mining revenues throughout the twentieth century, the mining industry employed a dwindling share of the work force--only about 7 percent in 1995, down from nearly 10 percent a decade earlier. More than 200,000 mineworkers had been laid off between 1987 and 1993, according to the industrial umbrella organization, the South African Chamber of Mines (see table 11, Appendix).

Women constituted only about 36 percent of the labor force in the formal economy in the mid-1990s, according to official estimates. Women of all races generally held lower-paid jobs than men, and they were paid less in comparable jobs. During the apartheid era, white women most often worked in service industries and clerical positions; a few white women held supervisory jobs or government offices. Black women dominated the large domestic work force; some worked in clerical positions or in temporary jobs, often in agriculture. Women managed most agricultural production in the former homelands and rural areas where men frequently left home to work in cities or in the mines.

Increasing poverty among blacks, along with entrenched workplace discrimination and the marginalization of blacks from national politics, caused black workers' organizations to become increasingly politicized in the 1960s and the 1970s. They provided a legal arena in which political grievances could be aired. By the early 1970s, there were twenty-four African workers' organizations with a combined membership of nearly 60,000. Their increasing militance and a series of strikes that began in Durban in 1973 finally persuaded the government to begin reassessing its restrictions on black labor.

The government-appointed Commission of Inquiry into Labour Legislation (Wiehahn Commission) recommended the legal recognition of these fledgling unions, in part to exercise stronger control over black workers. As a result, Parliament enacted the Industrial Conciliation Amendment Act of 1979, recognizing black unions and extending labor law protection to them for the first time.

Under this legislation, many black workers had the legal right to bargain collectively with their employers in the 1980s, and, when legally required mediation procedures failed, they had the right to strike. They exercised these rights aggressively, using both legal and illegal labor actions to press their workplace demands and to protest against apartheid. Black union membership of about 500,000 in 1980 grew to more than 2.5 million in 1990. By the early 1990s, almost 70 percent of all union members in South Africa were black, and more than one-third of all employees in mining, industry, and commerce were union members.

A century of South African industrial development had relied on an abundance of low-wage labor in order to ensure profits. But as the economic and social problems associated with implementing apartheid emerged, and as new technologies were developed during the 1960s and the 1970s, many industries chose to increase their capital stock--investing in sophisticated machinery and employing a few skilled technicians--rather than adopt labor-intensive methods that would require training and managing a large work force. This trend toward capital-intensive operations probably resulted in lower labor costs and increased productivity. At the same time, it contributed to the country's soaring unemployment and spreading poverty, which fueled resentment and raised the costs to the government of preserving apartheid.

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