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Towards Employment-Intensive Growth in South Africa www.uctpress.co.za Towards employment-intensive growth in South Africa UCT_Towards_employment_growth_new.indd 1 2016/08/02 3:27 PM UCT_Towards_employment_growth_new.indd 2 2016/08/02 3:27 PM TOWARDS employment-intensive GROWTH in South Africa Editor: Anthony Black UCT_Towards_employment_growth_new.indd 3 2016/08/02 3:27 PM Towards employment-intensive growth in South Africa First published 2016 by UCT Press An imprint of Juta and Company (Pty) Ltd First Floor Sunclare Building 21 Dreyer Street Claremont 7708 PO Box 14373 Lansdowne 7779 Cape Town, South Africa © 2016, UCT Press www.uctpress.co.za ISBN 978-1-77582-007-9 (Print) ISBN 978-1-77582-166-3 (Web PDF) All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publisher. Subject to any applicable licensing terms and conditions in the case of electronically supplied publications, a person may engage in fair dealing with a copy of this publication for his or her personal or private use, or his or her research or private study. See section 12(1)(a) of the Copyright Act 98 of 1978. Project manager: Glenda Younge Editor: Glenda Younge Proofreader: Lee-Ann Ashcroft Typesetter: Firelight Studio Cover designer: Paula Wood Cover photograph: Gavin Younge Typeset in 11 pt on 13.5 pt Minion Pro The authors and the publisher believe on the strength of due diligence exercised that this work does not contain any material that is the subject of copyright held by another person. In the alternative, they believe that any protected pre-existing material that may be comprised in it has been used with appropriate authority or has been used in circumstances that make such use permissible under the law. This book has been independently peer-reviewed by academics who are experts in the field. UCT_Towards_employment_growth_new.indd 4 2016/08/02 3:27 PM Contents Contributors vii Acronyms and abbreviations xi List of figures and tables xv Foreword xix Preface xxi Acknowledgements xxii Part I: Overview 1 Chapter 1 Introduction: Employment-intensive growth 2 Anthony Black Chapter 2 Employment-centred policies in an international context 9 Rolph van der Hoeven Chapter 3 The South African unemployment debate: A basis for consistent policy on employment? 33 Frederick C v N Fourie Part II: Employment and the structure of the economy 79 Chapter 4 Employment outcomes and earnings in post-apartheid South Africa 80 Haroon Bhorat and Natasha Mayet Chapter 5 Sectoral dimensions of employment intensity 108 Fiona Tregenna Chapter 6 Inequality traps and human-capital accumulation in South Africa 126 Miquel Pellicer and Vimal Ranchhod Part III: The rural sector 155 Chapter 7 Contemporary agrarian transformation and rural development: Large- scale land investments and the question of labour 156 Wang Chunyu, Saturnino M Borras Jr and Carol Hunsberger UCT_Towards_employment_growth_new.indd 5 2016/08/02 3:27 PM Chapter 8 The penumbra of employment: Impoverished rural livelihoods in South Africa 177 David Neves and Andries Du Toit Chapter 9 Is there a case for a greater support for agriculture? 198 Anthony Black, Beatrice Conradie and Heinrich Gerwel Part IV: Policies for employment 219 Chapter 10 International experience in assisting youth to find jobs and lessons for South Africa 220 Cecil Mlatsheni Chapter 11 Wage subsidies and employment creation in South Africa 238 Justine Burns, Karl Pauw and Lawrence Edwards Chapter 12 Public employment and inclusive growth: Unlocking the transformative power of labour 263 Kate Philip Part V: Employment and the manufacturing sector 285 Chapter 13 Capital-intensive industrialisation, comparative advantage and industrial policy 286 Anthony Black and Reviva Hasson Chapter 14 Institutions, wage differentiation and the structure of employment in South Africa 307 Nicoli Nattrass and Jeremy Seekings Chapter 15 The limits of cooperation in a divided society: The political economy of South Africa’s garment and textile industry 327 Mike Morris and Brian Levy Chapter 16 Conclusion 352 Anthony Black Index 361 UCT_Towards_employment_growth_new.indd 6 2016/08/02 3:27 PM Contributors Contributors Haroon Bhorat is Professor of Economics and Director of the Development Policy Research Unit (DPRU) at the University of Cape Town. His research interests cover labour economics, poverty and income distribution. Anthony Black is Professor in the School of Economics at the University of Cape Town and a former director of the School. He is a Research Associate of Policy Research in International Services and Manufacturing (PRISM) and of the Environmental Economics Policy Research Unit (EPRU). His main areas of interest are industrial development, trade and foreign direct investment. Saturnino M. Borras is Professor of Agrarian Studies at the International Institute of Social Studies (ISS), Erasmus University in The Hague, Adjunct Professor at CAU, Beijing, and a Fellow of the Transnational Institute (TNI) in Amsterdam. Justine Burns is Professor in the School of Economics at the University of Cape Town, and an associate of the Southern African Labour and Development Research Unit (SALDRU) and Research Unit in Behavioural and Neuroeconomics (RUBEN). She is a behavioural economist, with extensive experience in the field of experimental economics, applied labour, microeconomics and impact evaluation. Beatrice Conradie is Associate Professor in the School of Economics and the Director of the Social Surveys Unit in the Centre for Social Science Research at the University of Cape Town. Her main areas of interest are total factor productivity analysis, land-use change and human–wildlife conflict. Andries du Toit is Director of the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape. His interests include the biopolitics of late-capitalist, post-agrarian landscapes. Lawrence Edwards is Professor in the School of Economics at the University of Cape Town and Director of the School. He is a Research Associate of the South African Labour and Development Research Unit (SALDRU) and Policy Research on International Services and Manufacturing (PRISM). His research interests focus on international trade, trade policy, firms and labour markets. He is the author (with Robert Lawrence) of Rising Tide: Is Growth in Emerging Economies Good for the United States. Frederick Fourie is Professor and Research Fellow, Department of Economics, University of the Free State, and a former Vice-Chancellor of that university. He is the Research Coordinator of the Research Project on Employment, Income Distribution and Inclusive Growth (REDI3×3), based at the University of Cape Town, and is editor of the online policy forum, Econ3×3. vii UCT_Towards_employment_growth_new.indd 7 2016/08/02 3:27 PM Towards employment-intensive growth in South Africa Heinrich Gerwel is a PhD student in the School of Economics, University of Cape Town. His main interests are development studies, economics of agricultural transformation, rural development and productivity analysis. Reviva Hasson is a Research Fellow at the Environmental Economics Policy Research Unit (EPRU) and lectures economics at the University of Cape Town. Her research interests span developmental, health and environmental topics. Carol Hunsberger is Assistant Professor of Geography at the University of Western Ontario in London, Canada. Her research focuses on energy justice and the political ecology of biofuels. Brian Levy is Academic Director of the Graduate School of Development Policy and Practice at the University of Cape Town. He also teaches at the School of Advanced International Studies, Johns Hopkins University. He worked for over 20 years at the World Bank, where he played a leading role in helping to integrate governance into development practice. Natasha Mayet studied at the University of Cape Town and Bates College in the USA. She joined the Development Policy Research Unit (DPRU) at the University of Cape Town as a researcher in 2009. Her research interests include labour economics and minimum wage enforcement. Cecil Mlatsheni is a Senior Lecturer at the School of Economics at the University of Cape Town. His main area of interest is labour economics, especially youth unemployment. Mike Morris is Emeritus Professor in the School of Economics and Director of Policy Research in International Services and Manufacturing (PRISM). His main areas of interest are globalisation, global value chains, industrialisation, industrial policy and the political economy of renewable energy. Nicoli Nattrass is Professor in the Centre for Social Science Research at the University of Cape Town. Her research interests include the political- economy of employment and health, and human–wildlife conflict. David Neves is a Senior Researcher at the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape. Subsumed beneath a broad focus on poverty and inequality in South Africa, his research interests have focused on impoverished urban and rural livelihoods, informal- sector employment and social-welfare grants. Karl Pauw is Regional Coordinator of the Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme of the United Nations Food and Agriculture Organization (FAO) based in Addis Ababa, Ethiopia. He holds a PhD in Economics from the University of Cape Town. His broad area of interest is
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