Last month President Cyril Ramaphosa signed the Employment Equity Amendment Act into law, which imposes new racial quotas on employers of more than 50 people. The regulations of the act are now out for comment. Much of the focus has been on their detrimental impact on social cohesion in our already racially divided society.
But my concern is more practical. As is normally the case with ANC policies, the intended beneficiaries of this measure are precisely the people who will be hurt most when it invariably fails.
In my line of work as a communications consultant, I am often called on to bring issues into the public square in order to stimulate conversations that hopefully lead to change. The holy grail is breaking the sound barrier — that is when the issue you’ve worked to highlight starts popping up in conversation. You know people understand the issue and its import when it’s organically coming up in social settings and people are really thinking about its implications.
For all our philosophical debates about affirmative action, BEE, and other such policies, I rarely hear people spontaneously express concern about the business implications of these policies outside of a professional or political environment.
This is why I listened attentively when a black executive at a local subsidiary of a multinational company brought up this particular act at a funeral recently. That’s how I know this issue is real, and that the consequences will be too. And by consequences, I’m not talking about the increased racial antagonism which has also been stirred up by this newly signed legislation.
False gains
The most important question to ask when examining any legislative proposal is “why?” What is the legislation intended to achieve? It will surprise no one that the act has a superficially reasonable justification: “to ensure the equitable representation of suitably qualified people from designated groups”.
Notwithstanding the stated objective of the act, the “why” here is perfectly clear. The signing of this bill by the president who promised one million jobs is a clear concession of the failures of ANC economic policy. The very best this party can offer the country from here on out is a periodic reallocation of whatever jobs are left in the economy — the further slicing up of an already diminishing pie.
In the meantime, with the economy dragged down by poor education outcomes, prohibitive legislative compliance costs, and a worsening energy crisis, the poor will get poorer with many from the middle class joining them. All the while the president and his party can continue to trumpet all that they’ve achieved for black people.
What they’ve actually given us is morally and intellectually bankrupt legislative “solutions” that will fix nothing.
It is clear from the employment equity and BEE measures implemented in the past that this legislation won’t create jobs. But the problem is bigger — the legislation won’t even redistribute existing jobs more “equitably”.
In a country with our poor education outcomes, finding any suitably qualified person for a position isn’t a given. Doing this within a prohibitive quota system is even less attractive when you’re a multinational with your choice of investment destinations that have simpler labour laws, reliable energy, and an educated workforce.
The likely cost of this legislation to the South African economy is bleak, even in the best-case scenario. Let’s assume that the reaction from the commentator class and from the aforementioned executive has been overblown, and the legislation will not lead to an exodus of investment.
Even so, the legislation will now form part of the many variables that make South Africa a less attractive investment destination by increasing the difficulty of doing business here. In that case, we won’t have a quick rise in the unemployment rate, just the steady uptick we’ve come to expect.
Figuring out that the legislation presents a lose-lose proposition isn’t rocket science, so even our incomparably incompetent Cabinet must understand this. This makes one wonder why they’d push it through anyway. One can only surmise that the expected benefit exceeds the election-losing strategy of killing local jobs.
Shifting today’s blame and accountability
One option is that the ANC is counting on the same old racial tropes to convince black people that their economic success is tied to this hollow party. In making this argument, the ANC can also abdicate responsibility and shift the blame for the lack of opportunity in this country for black South Africans. This strategy only has to convince a portion of the largest demographic group to stick by the ANC despite all the evidence around us of this party’s unfitness to govern.
The other possible reason would be to court the favour of a would-be coalition partner when the ruling party inevitably fails to gain an outright majority. By passing this legislation, the ANC can simultaneously guard its left flank, and align itself to the Economic Freedom Fighters ahead of what it knows will be an historic fall in the 2024 general election.
Admittedly, putting thousands of jobs on the line for electoral purposes is lower than most of us thought the ruling party could sink, but it makes sense when you see the ANC as the party we know today rather than the virtuous movement of generations long gone.
It is deeply saddening to see the aspiration of building a non-racial society disappear. But that isn’t the only — nor, in my view, even the most important — problem with this legislation.
The continual gaslighting of black people with “progressive” legislation that always seems to leave us worse off even as we’re told how grateful we should be, is deplorable, and this strategy has passed its sell-by date.
We can only hope that the economic consequences of this act — the part that actually affects people’s lives and livelihoods — don’t materialise before the ANC can be pushed out of power in 2024. DM
Excellent analysis. Thanks for writing this, if only the “incomparably incompetent Cabinet” would find the time to read it. As if they care.
How many other countries in the world have legislation to protect the majority from the minority? How many countries have race- based laws? How many countries have race classification?
I concur!!
Brilliant objective analysis, we have to claw and fight for a better south Africa for all,without the anc.
How will they divide the ‘racial’ groups – in the same way the Nats did,using a pencil test. There are many people who could pass as ‘black’ but are’coloured’ and many ‘whites’ who pass as ‘coloured’ and vice versa. Where is this line?
Wake up – there is only one race on earth – the human race – we are all brown (various shades) but only brown.
Eliminate the words race, racist and racism from the dictionary. Will solve all the problems. Focus on humans.
It’s amazing how many new companies with under 50 employees there will be. The whole thing is just another looting exercise for incompetent cadres to rent seek.
Spot on.
It is critical that the government do what is good for the people – and recognise that doing this is actually the clever strategy as it will by inference be good for the government.
And without question what is good for the people – and thus for government – is for the government to dramatically scale back on all legislation that retards economic growth and investment, both domestic and foreign. This act being an obvious candidate.
Wile it is true, sadly to correctly identify a futile policy direction does not help. Almost all public opinions correctly identify our country’s scandolous corrupt and non intelligent management management. When do our wise commentators start with a comprehensive plan to acknowledge our weakness and draft a road map to a better future for all. I am afraid, as long as political party leaders are allowed to accumulate wealth through political action for themselves, are nit held accountable and their performance not tracked, this country is doomed. So start their and block that wealth option. I am not saying they should earn nothing, I am saying it must be earned, and within limits. We need to change our constitutiin to serve the country, not the political elite.
While it may not change government behavior, and indeed I don’t expect it to; the point is to keep identifying different approaches to as many people as possible in the hope that public opinion sways away from this patently stupid and – short term votes (maybe) but long term epic fail – Act our – government is attempting to pass. Remember that although paid readership of the DM may be largely of a view, there is a massive and diverse readership who do not subscribe.
Oh sorry, I forgot the roadmap!
It’s pretty simple really: vote DA.
Indeed, the problem is bigger, much bigger. Instead of the non-racial society South Africa aimed for under Mandela’s leadership, this ANC government continues to implement race-based policies, ranging from prescribed share-holdings in certain industrial sectors to employment guidelines. Instead of being eliminated altogether, race is everywhere. And so is the hypocrisy: Engagements with ‘Black’ organisations from the business forum to lawyers and farmers are common.
A wonderful article written for the masses, but only available to the few who read DM.
PLEASE, DM, find some way to spread this type of article to those who need to read it most.
Forget about our so-called government reading it and taking note.
It’s the mass voting public that need you most!
Sadly, it will work. The man who robs Peter to pay Paul can rely on the support of Paul.
as structured, the system is full of holes. The math already is nuts. How do you target 0.1% Indian for senior management in a region when total company employees is 100 and more than likely your free state region only has 1 person in senior management?
As we don’t have a race register, employers will have to rely on self-reported race of employees.
Further, the quota / targets only deal with black, colored, indian and white. What about asian, middle eastern, latin american, whatever other races out there?
Do the quotas, sorry targets, also apply to government? If so, what would the composition of our cabinet then look like?
“Figuring out that the legislation presents a lose-lose proposition isn’t rocket science, so even our incomparably incompetent Cabinet must understand this. This makes one wonder why they’d push it through anyway. ”
If you realise that they are muppets: i.e. sheets of felt cloth stuffed with dacron and fitted with Soviet Socialist talk boxes you have your answer.
Great piece Kabelo
Wow! Strong views! And quite correct, in my opinion. I actually wrote elsewhere in DM today that the ANC and those to the left of them were incapable of policies that would redress inequality through growing the pie. Nice to see that echoed here!
Give the lady a Bells 👏
The Labour Relations Act of 1994 is the single biggest inhibitor to job creation in South Africa. It might have made sense at the time, considering that government did not trust ‘white’ business to at the time, which in turn did not trust government to run the country.
Subsequent labour legislation (BBE, BBEE etc.) has only served to deepen their mutual distrust and now we are in a real mess where nearly 50% of the population wants to work, but they cannot do so as a result of outdated legislation that was initially designed to protect and advance their opportunities.
The irony is that the very concept of labour is changing as a result of extensive mechanization, AI and the like, so the so-called ‘proletariat’ are increasingly becoming obsolete.
Your analysis of the situation is spot on.
The sad part is that the average ANC voter will not see it this way.
This is the second excellent article that you’ve written for DM, Kabelo. Thank you, and keep it up!
“The continual gaslighting of black people …” is, for me, the big takeaway in your article. The median age (i.e. the age at which 50% of the population is older and 50% is younger) in South Africa as of 2020 is 26,9 years. This effectively means that all young job market entrants of today (at least 50% of the population) never lived under apartheid – they have only ever lived and been educated under the ANC’s kleptocracy. So why continue to BS these kids that they need a continual helping hand because they just cannot make it on their own? Why contribute to perpetuation of the notion that black kids aren’t good or strong enough to stand up on their own? Or is the ANC locked into a “wit gevaar” strategy akin to the Nat “swart gevaar”?
A well written article that accurately covers how disastrous race based legislation is for the unemployed. The poor will get poorer under the ANC/EFF alliance.
The ANC is reshuffling the deck chairs on the Titanic.
Excellent OpEd Kabelo!
You have to be naive to think that the spooks do not read and pass information regarding governments shortcomings to relevant authorities, especially those at the top of the pile, ie CR and his deputies. All we can hope for, is that these suggestions manage to bring about changes that put SA first. The race card to redress past injustices is a poor substitute for real change.
Democrasy I thought was about protecting rights and accepting responsibility. How does the government define that concept then? Are we still married to the definition of democrasy is freedom from oppression? So if that outdated definition is still rooted in the foundations – they are not even getting that right. Because now the minorities are those oppressed. So according to the Goverment’s interpretaion of rights being protected, they cannot even get that right! Amazing when you ask 1st year student’s what is democrasy, the majority will say ‘freedom from oppression’. Go figure.