Economist warns of jobs bloodbath in South Africa

pezulu

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My Dad started farming in 1946, and my brother and I joined him on the farm in 1990.
It was a tropical and sub-tropical farm, with various fruit and vegetables in winter.
When I joined the farming operation my responsibility was labour administration, payroll and all things labour related.
At first I was shocked by the low salaries (R250 a week for women, and R350 a week for men) until I looked further.
Payment in Kind was the catch phrase at the time. Basically it means that you can work out how much additional income is being paid to each worker in a form other than cash.
A quick breakdown showed the following:
Free housing.
Free medical.
Free schooling for kids.
Free funeral scheme together with a cash payout to the remaining family if the deceased had any family.
Free transport to and from work for the workers that did not live on the farm.
Free transport to town for those that wanted to go every weekend.
Free food and usage of farm products within reason. A 50kg bag of mielie meal for the women every week, and men got 25kg a week. Also about 2kg of salt, a 2L of cooking oil, tinned stuff (fish in tomato sauce, baked beans, a tin of condensed milk) as well as a1kg of raw peanuts, among other things.
It still sounds very basic, but if you factor in we had over 400 workers, it adds up.

The farming operation used about 200 tons of fertiliser per season (twice a year)
Packaging materials for the produce. Wooden boxes or cardboard boxes depending on the product.
Later on punnets, plastic wrapping, everything was palletized to make loading produce into cooler trucks easier.
Seed stock, of the various products had to be bought if we did not produce our own seeds.
Those were all incidental costs that we had to carry.

My father was fortunate in that he had built up a cash reserve, and could carry 1 one year of the farming operation if there was a catastrophic failure. Something as simple as a hail storm could wipe out the entire seasons produce in an instant. I would see him standing in a land of tomatoes, beans or whatever crop with tears streaming down his face, but he never showed us that he was upset and would likely just wipe his face with his handkerchief because he had dust in his eyes, and we would start over if the season permitted, or move on to what was the next crop in rotation.

This is a long story, with the bottom line being that many farming operations can get away with 5-10 seasonal workers, but some others make use of manual labour to harvest, fertilise, irrigate, and any of the other tasks a farming operation must perform.
 

acidrain

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Having them on site also means that you are their 24/7 parent.
Every time there is a fight or some problem, they are at your door wanting you to solve it.
Where there's a pro, there will always be a con. The trick is managing the cons well.
 

JustAsk

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Very true, excepting where is that extra money coming from? Say a farmer has 50 workers, all earning minimum wage for the harvesting season. This equates to an extra R 17 500 a month the farmer needs to find. Not a huge amount for sure, but with farmers already under financial pressure amongst other things, it could be the straw that breaks things. The farmer will merely get 5 fewer workers to do the harvest so that his costs stay the same. that is 5 people that have now gone from R3,4k to R0
Surely if you can see that for the farmer, you must see it for the worker too...

Covid is/was used by retailers to hike up prices astronomically. The lowest earner do not have a buffer to absorb those hikes.
 

JustAsk

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Having them on site also means that you are their 24/7 parent.
Every time there is a fight or some problem, they are at your door wanting you to solve it.
Nonsense. Its actually more the other way around. Farmer expects from the workers to help him with anything anytime in the night/weekend. I've seen that many times in disputes where the worker was banned from the farm because he refuse to do something outside his work hours...many times after he repeatedly did extra work and feels enough is enough.
 

Bewlen

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Very true and sad. But this is domestic and farm workers thread so we should not be sympathetic to their plight much. It is frowned upon here.
Yeah man, we should just pay each of them R30k a month. They work hard.
 

Vrotappel

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Are farmers really under financial pressure? If so where is the pressure originating from. That all boils down to their business model and how effectively they run their business. I'm not saying labor isn't a contributor but there are so many factors involved in running a business like this that you can't rule labor as the only problem effecting their bottom line (good chance they have product loss due to poor supervision, for example ).

That said, I would agree with @Hamster that asking farm workers to be aligned to the national minimum is not bad. With my business, if I had to pull a guy off the side of the road, no skills except for muscle, that is R30ph and it's not nearly as intensive as harvesting.
As far as I am concerned government should not meddle in private enterprise.

One should be free to hire and one should be free to sell your labour.

The rate to be agreed between the parties concerned.

One thing we have learned is where the government meddles jobs and businesses get destroyed.
 

Petec

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Don’t forget the large retails chains squeezing the hell out of the local farmers’ margins.
“If you don’t like what we are prepared to pay, we will import rather.”
Then if those squeezed farmers want to defend themselves and export, the hoops they have to jump through are ridiculous.
The mass retailers, have the banks and government officials in their back pockets.
 

itareanlnotani

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Don’t forget the large retails chains squeezing the hell out of the local farmers’ margins.
“If you don’t like what we are prepared to pay, we will import rather.”
Then if those squeezed farmers want to defend themselves and export, the hoops they have to jump through are ridiculous.
The mass retailers, have the banks and government officials in their back pockets.
On the contrary. I have had buyers lined up for product that we can produce here (Oranges, Processed Sugars, Cooking Oils etc), and farmers that could supply literally haven't been interested in doing the paperwork to sell oversea's. The ones that were already selling oversea's were already selling 100% of their output.

I agree though, the paperwork can be onerous, and the government does not help it hinders.
 

Hoffie Hoffmann

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A very large source of employment in SA is the “bakkie brigade”. A white man with a bakkie employs a number of blacks to do all sorts of projects. Enforce a higher than demand and supply wage and the workers will be reduced. And here’s the thing. Many ( most) of these brigade owners do no stitch of work. But they are fully capable of doing anything. So force them into a situation of fanancial hardship and they can do the work of any number of labourers.....and still survive!
 

newby_investor

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Minimum wages don't always lead to job losses. There's a bit of a Laffer curve to this as well.

Sometimes an increased minimum wage leads to increased employment levels because some who previously wouldn't bother looking for work, now go get work, because it becomes worthwhile. (Laziness isn't always a factor here - if your wage doesn't, or barely covers your transport and childcare expenses, for instance, and an increased minimum wage can help with that.)

I don't pretend to know anything about farm workers and where on the curve we are, but <R4000/m sounds on the low end to me.
 

Milano

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Sometimes an increased minimum wage leads to increased employment levels because some who previously wouldn't bother looking for work, now go get work, because it becomes worthwhile. (Laziness isn't always a factor here - if your wage doesn't, or barely covers your transport and childcare expenses, for instance, and an increased minimum wage can help with that.)

In a market-led economy that is a natural function of supply and demand. If enough people were truly not willing to work at the prevailing wage then a labour shortage would result. The market would naturally need to pay more to attract labour.

Government is the perfect example of an entity that is most poorly suited to determining wages. Look at government schools or government hospitals to see the talent that their wages attract. Then compare that talent to that of the private sector.

Needless to say government, and the SA government in particular, is particularly inefficient and incompetent when it comes to delivering products or services of a decent quality.

A government that dictates the minimum wage should by extension also dictate what consumers will pay for the product or service, how many choices of supplier the consumer will have if more than one, and that government should also guarantee the purchase of the product or service. Which is obviously ridiculous. But no more ridiculous than government dictating the cost of labour.
 

newby_investor

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In a market-led economy that is a natural function of supply and demand. If enough people were truly not willing to work at the prevailing wage then a labour shortage would result. The market would naturally need to pay more to attract labour.
The ultra-free-market orthodoxy would have one believe that this is the case. Research has shown that it is a bit more complicated than that though.

This section on Wikipedia contains a fairly good summary of why that is and what the complicating factors are:

(The broader term for this is "market failure", when something appears to contradict the predictions that you might make with supply-and-demand. Markets tend to be kind of efficient on average, but this is one place that they often are not.)
 

Oldfut

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I reckon this could be turned around "easily" by the ruling cabal with some hard decisions. Get through to each citizen that a job is valuable and needs to actually be done. Jack up education ha ha. Crimp labour law and union power to project a positive engagement rather than confrontational one sided demands and violence. Make it easy for small business to exist (registration, tax, red tape) and employ. Promote labour intensive activities and crops; organic flowers, herbs, nuts, berries and fruit; call centres etc. Er, take farm murders seriously ha ha; stop the EWC thievery (ha ha). All piggy pie in the ANC regime sky sadly.
 

Vrotappel

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Remember this is a country where your right to protest is more important than education.

The flies are circling the dying body.
 
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