Abstract
M.A. (Economics)
The objective of this study is to highlight the problematic aspects regarding labour
productivity in the South African motor vehicle industry. The perfomance of the South African motor vehicle industry in the national economy has not been as what was expected from the industry, purely because of the pressure of rising costs link to a lack of productivity. A study of labour productivity and any comparisons regarding labour productivity is very difficult and stays a problematic issue. The reason for this is two-fold in that firstly relevant and applicable data was not available until recently and secondly the data that is available is very diverse in the sense that it is applicable to the different
levels of economic activity. The fact remains that the productivity levels of both labour and capital stays important indicators of the competetiveness of any nation. In this sense the South African motor industry could be a potential source of competitive advantage and economic growth for South Africa. The method used to study labour productivity in the South African motor vehicle industry was to look at the theory surrounding labour productivity, the South African labour market and the general trend of labour productivity in South Africa and the trend of labour productivity in the South African motor vehicle industry compared to international industry trends.
The traditional micro economic theory consider labour as just another production
factor and competition in the labour market is determined on the principles of
demand and supply. The criticism against the traditional micro economic theory is
based on the applicability of the theory on the modern business world. The macro
economic theory surrounding labour productivity showed the importance of this
variable as determinant of international competetive advantage. The theory
further showed that there is a strong link between labour productivity and inflation.
The most important characteristics of the South African labour market include a
labourforce of thirteen million workers{which includes the informal sector and
unemployed) against a total population of forty million, a population growth rate
of 2,7% that is higher than the average economic growth rate and high levels of
unemployment, illiteracy, inequalities and discrimination. Labour productivity in
South Africa has been characterised by a drastic increase in the amount of strikes
and work stoppages since the mid eighties. The international comparison of South
Africa with its most important trade partners regarding labour productivity, was not positive for South Africa. On most of the variables like unit labour cost, real output in manufacturing, output per worker in manufacturing and gross domestic product per capita, South Africa did not compare favourable with its leading trading partners.