Labour intensive growth is vital to reducing poverty and inequality in South Africa. Making South Africa more labour intensive summarises the proceedings of a workshop that grappled with the question of why, given the large number of unemployed people, economic activity in South Africa tends to absorb too few people.
The South African policy environment has made South Africa less labour intensive through increased worker protection and reduced employment creation, with employers becoming increasingly reluctant to take on staff because of rising wage and non-wage costs.
South Africa needs to remember the critical importance of manufacturing. It is very hard to see how an economy moves from middle-income to upper-income without developing the capabilities that you can get only in manufacturing.
South Africa has very few (and declining) agricultural jobs relative to the rest of the developing world, which has enormous implications for social and economic policy, especially in a low skilled country like South Africa.
Policy can create costly distortions, such as when SEZs are located in places that are not otherwise well suited for job creation.