“SA IS amazing. We protect more workers from exploitation than any other country, and seem intent on increasing our lead. We have the world’s highest level of sustained unemployment, which means we have more unemployed and therefore unexploited people than anywhere else. The best way to increase our lead, and ensure that no one is exploited, is to ensure that no one is employed. So bold new measures are being considered. Our problem is that too many people still have jobs. Workers, supposedly too stupid to know that employment constitutes exploitation, keep taking jobs below what do-gooders regard as “decent”. So, in order to reduce exploitation and extend the benefits of unemployment, there will be new employment “scorecards” to encourage employers to use machines instead of people and to invest abroad. And there will be a mandatory national minimum wage”.
Read Leon Louw’s column Problem is too many people are employed first published on BDLive on 22 July 2015.
We know from economic theory and experience that minimum wages protect workers from exploitation by destroying jobs. People buy less of whatever costs more, including labour. We have years of sectoral minimum wages to prove it. If the minimum wage works as well as sectoral minimums, the next step will be to raise the minimum indefinitely, perhaps to R1m a month. As long as people are still employed, we can add as many zeroes as it takes to end employment exploitation completely.
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High minimum wages turned our dear neighbour Zimbabwe into a nation of unemployed trillionaires. It enjoyed the world’s highest economic growth rate (in its own currency), while increasing wages to trillions of dollars.
The defining characteristic of rare examples of rising minimum wages and low unemployment is always and everywhere market liberalisation. We want to achieve the impossible: jobs and growth with an increased role for government.
As anti-market economist Joan Robinson observed, “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited”. We are likely to get a national minimum wage and other increasingly onerous employment laws. That, combined with rising levels of interventionism, will ensure stagnation and unemployment above the current 40% (or 20% if “disaffected” workers are excluded). If we are not intimidated by mean people who want the minimum set at a few thousand rand, we can achieve 50% unemployment in less than a year.