Wednesday, 25 September 2013 15:30

SA should learn from Brazilian Labour Market says COSATU

Cosatu believes that the minimum wage and employment aspects of the NDP should follow the example of the Brazilian experience. Former Brazilian President implemented a consolidation of a higher national minimum wage, the formalisation of the labour market, social protection, sound industrialisation development and improved macroeconomic policies in the country, leading to its dramatic advancement in ten years.

On the contrary, SA's NDP indicates that minimum wages should be lowered to allow for more profits that would, in turn, create more jobs.

The NDP aims to create almost 11-million jobs, and reduce the unemployment rate to 6% and eliminate extreme poverty by 2030, but Cosatu believes the NDP will not achieve its targets because it fails to pursue the national growth path (NGP) and the Industrial Policy Action Plan (Ipap) vision of reindustrialising the economy. It further believes the NDP is premised on undermining worker rights and a low minimum-wage strategy.

The target of creating 11-million jobs relies heavily on small, medium-sized and microenterprises (SMMEs) and service-sector jobs. The NDP proposes that these sectors will create 90% of the new jobs, but Cosatu says that SMMEs have shown little increase in their share of employment in the last ten years and a recent study of firm performance showed that job destruction was far higher than job creation in the SMME sector.