“Being in mining is like playing soccer under a biased referee and without rules. When I asked a mining boss why they were so pathetic about representing their interests, he said they were terrified of victimisation by omnipotent officials. The government should debunk the fantasy that mining is a bottomless pit (pun intended), and stop imposing anti-employment demands on mines including lavish community development projects, training schemes, discriminatory taxes and extreme environmentalism. There are no free lunches. Job losses will be reversed when anti-investor policies are reversed”.
State must face reality of job losses in mining: Leon Louw, Free Market Foundation executive director, today in BDlive published by Business Day.
Further excerpts
UNEMPLOYMENT is desirable. That is what I told the Minerals Petroleum Board when I gave evidence on “the surge in job losses in the mining industry”. They might regret having invited me, but I hope not. They were congenial, probing and attentive. They raised challenging questions to which my responses seemed well-received.
Most jobs should be “lost”. Eventually. That is what they should tell the minister who mandated the inquiry. But will they? Do political imperatives allow them to be frank? They should add, of course, that employment carnage can be reversed by labour policies that lower employment cost, pro-investor policies that attract mining companies, foreign exchange policies that stop pretending they “defend” the rand, and industrial policies that encourage income and incentives (unlike “beneficiation”).
Promarket reforms can offset job losses. Eventually most jobs in most sectors must be replaced by other jobs. All jobs were lost in the ox wagon, chimney sweeping and switchboard industries. Elevators used to have “lift drivers”.
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The government can cut the cost and risk of employing people if it liberalises labour law. In mining, it can restore the rule of law, which entails legal certainty, security and the separation of powers. Virtually every new policy increased administrative discretion, risk, uncertainty, insecurity and the conflation of powers. It is impossible, as employers keep explaining, to plan and invest when no one knows what the rules of the game will be tomorrow or when secure rights are eroded towards a vanishing point.