2010). In terms of employment security, out of a workforce of 13 million in 2008, 5.8 million workers were not covered by unemployment insurance; 2.7 million did not have written contracts; and 4.1 million did not have paid leave entitlements (Marais 2011). Workers have suffered most where employers have adopted task-based payment, which often leads workers to super-exploit themselves to meet unrealistic production targets (Pons-Vignon, forthcoming).
It is therefore unsurprising that the problems associated with the labour market have contributed to a sharp crisis of reproduction experienced by many poor people in South Africa.
The crisis of reproduction
South African workers are confronted with a particularly difficult socioeconomic situation, rendering their reproduction costly and difficult. Combined with the casualisation and unemployment crises which they experience in the labour market is an increasing commodification of essential services, from transport to healthcare (Barchiesi 2011). The upshot is that workers require more cash – at the same time as the incomes of many are declining. The ensuing reproduction squeeze often precipitates workers into the arms of very costly providers of consumption credit (Bateman 2012; James 2012). South African wage levels must therefore be understood in the context of a very expensive cost of reproduction due to commodified and often poorly managed services.4 Although some of the poor in South Africa have benefited from increasing conditional cash transfers, the latter typically contribute to entrenching neoliberalism when they are associated with the private provision of services (Ghosh 2011). Moreover, grants are, like micro credits, primarily channelled to purchasing goods provided by large-scale oligopolistic producers (Valodia op.cit.), able to fix prices for certain basic foodstuffs such as bread or poultry (Competition Commission 2010).
A crucial consequence of labour casualisation has been to exacerbate poverty, as the ability of workers to support dependants has been adversely affected.5 In poor households, it is common that workers’ wages are ‘the main safety net … [hence] even the limited income available to low paid workers is eroded through support for the unemployed’ (Coleman forthcoming). The weight of interpersonal solidarity imposed on the poor in South Africa is not limited to wage transfers, but also includes care. Many companies have thus managed, thanks to outsourcing and casualisation, not to bear the costs associated with HIV and AIDS. The economic burden of the disease has been shifted from business onto government, households and individuals, with women paying the highest price of caregiving (Marais 2005). Where contract and casual labour is extensively used, workers’ benefits are nearly absent and the entire cost of healthcare is displaced onto formal and informal caregivers (nurses and especially women of the family of the affected persons). In the context of insufficient investment in public health, access to health services is skewed not only in terms of race and class, but also against rural dwellers. This may explain why South Africa’s labour force participation rate is so low (54.8 per cent in the first quarter of 2013); indeed, many women are prevented from entering the labour market because they are looking after ill family members. Some are supported by NGOs or by new government schemes, but they are paid way below other healthcare professionals. Moreover – and crucially – sick workers who do not have permanent contracts cannot benefit from company-supported medical aid or sick pay.
Deepening inequality
With such poor records in employment creation and growth, it is not surprising that the unequal distribution of wealth has not altered. The country has the unfortunate record of being the most unequal in the world, ahead of Brazil, with a Gini coefficient rising from about 0.56 in 1995 to about 0.63 in 2009.
In a country where, despite the low rate of employment, low labour force participation and pervasive casualisation, wages remain by far the most significant share of income, particularly for the poorest, it is hardly surprising that poverty remains a critical issue in spite of a relatively large social grant programme. Inequality among wage earners has increased (Strauss 2013). When measured in racial terms, inequality dynamics are also surprising: racial inequality decreased dramatically during the last twenty-five years of apartheid while it did not fall between 1996 and 2001 (Leibbrandt et al. 2010)
If workers, and in particular poor workers, have lost since 1994, who has won? Like other countries, South Africa has experienced a rapid rise in the income of the super-rich, with the share of total income earned by the top 1 per cent jumping from about 10 per cent in the 1980s and early 90s to 18.1 per cent in 2007 (Unctad 2012). This trend has been supported by an unflinching commitment to ‘orthodox’ macropolicies and is closely related to the rise of the financial sector and of its ability to absorb resources at the expense of other sectors (Fine and Ashman 2013).
The failure of the post-apartheid labour market is therefore visible in the deepening of inequality, in particular between classes. Functional inequality between capital and labour has thus been increasing steadily, as Forslund (2013) notes:
On average, real wages have been increasing less than labour productivity, at about 2 per cent per year, with labour productivity averaging about 3 per cent in annual increases since 1994 … The wage share of GDP has therefore been falling … [from 50.1 per cent in 1995] to 44.5 per cent [in 2010]. (pp. 108-109, see Figure 4 as well).
The process of work restructuring described above has been an instrument of ‘authoritarian restoration’ of employer power over workers (Von Holdt 2003). But how could such a strategy be successful, and workers be so undermined, in the context of an allegedly progressive (or rigid, for some) labour market legal framework, based on worker-employer cooperation, and by a historically strong labour movement?
THE EMPEROR IS NAKED: UNPACKING THE MYTH OF ‘PROGRESSIVE’ LABOUR LAW IN SOUTH AFRICA
The first section of this chapter has painted a bleak picture of the South African labour market, pointing to the terrible difficulties many South Africans face in their daily lives. The combined high unemployment, low pay and widespread casualisation, however, appear to be a paradox, given the often criticised ‘rigidity’ (understand: protectiveness for workers) of the post-1994 labour law architecture. But how can the South African labour market be rigid, preventing employment creation, and at the same time unable to protect workers? The evidence supporting the claim that the labour market is ‘rigid’ is actually very thin, as shown by Bhorat and Cheadle’s aforementioned comparative survey of hiring and firing regimes (2007). It is therefore inaccurate to argue that rigidity or ‘high wages’ are responsible for unemployment (Strauss 2013). Recent research making such claims, for instance by Klein (2012), amounts to little more than an unsophisticated rehash of the ‘reactionary rhetoric’ dismissed by Sender (1994). Building on Forslund’s critique, we will therefore not engage such unconvincing arguments but, rather, attempt to account for the failure of the