Abstract
M.A. (Economics)
Unemployment is a familiar affliction of our age, but its
nature, causes and cures remain matters of dispute. As with
many familiar things, closer examination leads to deepening
mystery. Its pathology is complex, with social as well as
economic ramifications" (Routh, 1986: 1). In the world of
today which is characterised by globalization, the
unemployment problem has become a worldwide problem. It is
endemic in both developed and developing countries. But for
developing countries, this problem brings more challenges(like
increased poverty) and complications (like political and
social instability). South Africa is certainly no exception.
In South Africa, this problem is succinctly expressed by
Barker (1992: 71): "Unemployment is probably the most severe
problem South African society is experiencing and it is
conceivably the root cause of many other problems, such as
high crime rates, violence, abject poverty.... Prominent
leaders in and outside government have also stated that no
government will be able to govern South Africa ...if this
problem is not addressed effectively".
According to Hall (1997: 396), one of the overlooked aspects
of the unemployment crisis in South Africa is the spatial
distribution of unemployment within cities. Apartheid urban
planning concentrated the black population in peripheral
residential areas, where the majority of the unemployed
population is found. In Gauteng, for example, unemployment
rates (using the 1991 census) vary between zero percent in
former white suburbs and above thirty percent mainly in the
former black townships. In addition to the apartheid urban
landscape the recent trend of suburbanisation of economic
activity, the decline in central business districts and the
continued lack of development in former black residential
areas may intensify the problem of unemployment. The long-term
effects of these processes are far reaching, that is, they may
result in profound labour market segmentation which may, in
turn, negatively impact on urban development strategies aimed
at reintegrating South Africa's cities and addressing the
problems of poverty, unemployment, urbanisation and housing.
With the establishment of democracy in 1994, many South
African unemployed people became hopeful that there was going
to be employment for everyone. This was further reinforced by
the adoption of the Reconstruction and Development Programme
(RDP), and the promises made by the developed Western
countries to assist South Africa in its development
endeavours. In 1996, South Africa opted for a neo-liberal
approach (which advocates for less government involvement in
the economic activity) to economic development by adopting the
Growth, Employment and Redistribution (GEAR) policy - which is
a supply-side policy. The GEAR strategy calls for a minimalist
state, restructuring of the economy like the elimination of
export subsidies and the reduction of import tariffs to
improve the competitiveness of South African industries in the
global arena. In fact, to the contrary, at this stage, GEAR
has not helped to stop the increasing tide of unemployment and
retrenchments as industries are concerned with cutting
costs(of which, labour costs are often the highest) to meet
global competition. The cliche "lean is mean" has become
crucial in business decisions. The implication of this is that
more people have been put out of work. The unemployment level
in South Africa has reached endemic proportions. The problem
is getting more complicated by the prospects of the closure of
marginal gold mines due to the possibility of a weaker gold
price and increasing costs.