Empowering Employment in South Africa: SPEX Certificates for the Jobless

1. Free Market Foundation: Policy and activist institute ‘aerial bombardment’ - ‘trench warfare’ Founded 1975 To promote open society, rule of law, personal and economic liberty. Part of ‘anti-apartheid movement’ Still fighting racism (anti-black and anti-white)

2. Jobs for the JoblessSpecial exemption certificates (SPEX)for the unemployed

3. Current level of unemployment in South Africa • 20% to 40% (5 to 8 million) • Unskilled = unemployed • You can’t get – • a job if you don’t have skills • skills if you don’t have a job • a job if you don’t have a job • Training is not as employable as experience.

4. What causes unemployment?(Williams, Siebert & Baird etc) • What do the poor know that intellectuals don’t? • Mandatory job security(high risk = low supply) • Mandatory minimum wages(high price = low demand) • Onerous procedures(disproportionate impact on poor, unsophisticated, small business) • Militant trade unions.

5. Fundamental law of economics TANSTAAFL There Ain’t No Such Thing As AFree Lunch

6. 20 : 20 Analysis(Louw)

7. Flawed responses • Labour laws don’t cause unemployment(ILO, IMF, UN, intellectuals etc) • First World standards (Global Compact etc) • Employers can get exemptions (theoretically) • More skills training is solution • Increased government ‘investment’ • Taxpayer-funded welfare • Social work schemes (double standards).

8. Jobs for the JoblessSpecial exemption certificates (SPEX)for the unemployed Details of the Proposal

9. The Proposal - basic concepts • Morally incontestable (employee-centred) • No fundamental changes to existing law • Job security / employment conditions of existing workers unaffected • Simple for jobless to understand • Minimum of red tape • 7 features ...

10. 1. SPEX certificates for anyone jobless for over 6 months • Exemption from labour laws • Employee - not employer • Why waiting period? • Acceptable period debatable (‘Fabian choice’) • Not for evading labour laws • Identify genuinely unemployed.

11. 2. Simple and quick procedures • Easily obtainable (eg post office or local government) • Simple application and procedure • Declaration confirming period unemployed • Rebuttable presumption of accuracy • No discretionary power to refuse • No cost • Issue immediately.

12. 4. Exemption from all labour laws • Exemption from all laws • Partial exemption remains a barrier • Real world choice is: high security / standards : no job low security / standards : with job • Protection: common law (contract) competition.

13. 5. Employee exemption gives employer incentive • Employees not employers have exemption • Employees have total control over acceptable working conditions • Must be simple employment contract • Employer must: retain copy of SPEX certificate send copy to government.

14. 6. Certificate must be valid for at least two years • Time to look for permanent job • Hope for better job • Free to move / improve • Learn on-the-job skills • Build employment record • Test the market.

15. 7. Minimum restrictions on choice of employer • Zero restriction is politically unlikely • Limitation on firm size? • Minimum skills development? • Obligatory assessment (CV)? • Small business law definitions are complicated • 200 employee definition (EU).

16. 8. Basic, simple employment contracts • Clarity on agreement terms • Plain language • Not prescribed by regulation - common law protects against undue danger, understanding, misunderstanding, bad faith etc.

17. CONCLUSION • Shift focus from employers and employees to the jobless • Government - provide intellectual ammunition • Labour unions - bad faith exposed • Opposition parties - encourage to support • Media - educate / entice • GDP: 3m x $1,000 = $3 billion.

18. Jobs for the JoblessSpecial exemption certificates (SPEX)for the unemployed www.freemarketfoundation.com