Inequality and labour markets

South Africa’s wage-setting machinery were historically used to protect white workers. Today, they protect the wages of all employed ‘insiders’ – but in a context where little, if any, support is provided to unemployed ‘outsiders’. This creates social problems pertaining to poverty and alienation, but has also given rise to new challenges to the legitimacy of the bargaining council system itself. For example, small employers in the clothing industry in Newcastle (KwaZulu-Natal) are contesting the extension of collective agreements to them, and many firms and their workers are shifting to co-operative structures to avoid the labour legislation.

These social and political aspects of labour-market institutions and unemployment are neglected areas of research. This focus area of the Sustainable Societies initiative seeks to address this lacuna – notably by researching different understandings of the role of labour legislation in shaping the growth path, the emerging contestation of aspects of the legislation, and the social contours and consequences of unemployment. Our objective is to combine quantitative and qualitative research methods.

The lead project has been an investigation by Nicoli Nattrass and Jeremy Seekings into the economics of the clothing industry, and the Newcastle case in particular. They have produced three working papers, one on the bargaining council system, another on differentiation within the clothing industry and a third on the Newcastle case. They argue that the recent compliance drive by the National Bargaining Council for the Clothing Manufacturing Industry is threatening the existence of the last rump of labour-intensive industry in South Africa.

Recent news releating to this project:

Other relevant CSSR working papers: