'Two men say they're Jesus. One of them must be wrong.' - Dire Straits
THIS is the funniest tale I've heard in a while. Alan Greenspan - who as chairman of the US Federal Reserve is Tito Mboweni's spiritual brother in the land of milk and money - works about twice a year, and he got to do some of that work this week. He raised interest rates by one quarter of a percent.
What's so funny, you may ask? Get this. He is trying to prevent the US economy from overheating because too many jobs are being created.
Is this man stupid or what? Had he been sitting in our parliament on Wednesday, he would have heard our labour minister Membathisi Mdladlana pointing out that what he was describing just does not work. Jobs are not created in a deregulated labour market. A deregulated labour market cannot stop hunger. Workers cannot eat flexibility...
Enough of the sarcasm. I mean no disrespect to the minister; only to the worn platitudes he parrots. Here's what's at hand. Early this week, economists predicted that Greenspan would raise interest rates because the US economy created 300 000 jobs last month.
Read that again, slowly. That is not a typographical error. The US economy created 300 000 jobs last month.
Meanwhile, as the labour minister in Cape Town was addressing parliament and berating opposition parties and business for creating negative (and false) perceptions about labour market rigidity, the Human Sciences Research Council in Johannesburg released a study predicting 74 000 job losses in the public sector and 45 000 in the manufacturing sector.
There is some good news for all of you matriculants entering the job market over the next five years: Total formal employment will grow by 45 000 jobs (almost 1%!), especially in the trade sector as a result of growing tourism. Yes, you can all find employment as waitrons, and get your tips in deutschemarks and dollars.
But wait, did you say that there are more than 45 000 of you entering the job market every year?
Minister Mdladlana, you're absolutely right when you say that the ANC inherited an economy that was, to use computer science shorthand, fubar. (The "ubar" stands for "up beyond all recognition.) The Stalinist bureaucracy created by the apartheid government bloated the public service and created the monster that is currently holding this country to ransom. None of that is your fault.
Fact is, you can quote the International Labour Organisation till you are white in the face, but business does not listen to the ILO. Neither does international business listen to Tony Leon (even though Tony Leon may like to think they do). They do listen to the World Economic Forum which listed us worst out of 59 countries on labour regulation when assessed on labour/employer relations, work ethics, and hiring/firing practices. And our labour force is uneducated; we rank 58 out of 59 on average years of schooling.
The US experience this week is instructive reading for those in organised labour who are sincere about bettering workers' lives in the long run. Why is the US Federal Reserve worried about too many jobs being created? Get this. When there are more jobs than workers available, workers are able to demand higher salaries because they can pick and choose jobs. (Isn't that what Cosatu wants?) To prevent inflation caused by runaway salaries, Greenspan raises interest rates to slow down the rate of job creation.
We have the opposite situation here. We have a shrinking job market, and we are demanding higher wages. In a shrinking job market, if an economy has to survive, labour costs have to become cheaper or at least remain static. That isn't happening. Ask yourself why.
Almost 20 years ago, we said Reaganomics was wrong. The US economy has now grown for 9 straight years and shows no sign of letting up. In order for workers to control the means of production, they need to have jobs. Jobs are not being created. Business says the labour laws are the problem. Minister, you should be listening.