SARB Governor calls for German Model to tackle Unemployment

The recent strikes – not only in the mining industry – have shown again the high vulnerability of South African business and the detrimental influence on economy and trade balance deficit. South Africa must find ways to resolve labour disputes before they undermine the economy, SA Reserve Bank governor Gill Marcus stated today at a luncheon held by the Southern African – German Chamber of Commerce & Industry in Johannesburg. “In South Africa we need to find models that enable earlier dispute resolution in the workplace before labour disputes affect the broader economy,” Marcus said. “We also need to find ways that enable the workforce to have greater knowledge of the financial affairs of the company and sector, while management needs to better appreciate the living and working conditions of their employees.” Marcus continued to elaborate on how South Africa can may from Germany’s experience with labour relations and skills training.

h4. The German Social Market

She said much of Germany’s post-war economic success could be attributed to its social market model. Germany’s industrial relations were characterised by a high degree of co-operation between employer and employee organisations. “Both workers and firms take a long-term view of the economy and both parties recognise the importance of continuously raising productivity,” Marcus said. Germany had a dual training system with high-quality vocational training institutions complementing on-the-job training. Nearly two-thirds of the country’s workers were trained through partnerships among companies, technical schools, and trade guilds. German companies took on and trained nearly 600 000 paid apprentices in 2011. Schools provided theoretical lessons on the side, while trade unions helped ensure training was standardised. German firms took in young work seekers and provided training and induction to prepare them for the rigours of work and give them skills to raise their productivity.

h4. Dealing with Unemployment

The German system allowed new entrants to gain access to work and training quickly, meaning long-term unemployment was low, she said. Germany had among the lowest youth unemployment rates in the world, currently 7.7%, compared with the eurozone average of 23.9%. South Africa had amongst the highest rate of youth unemployment in the world, at 51%. Marcus said the youth was locked out of employment due to poor skills and lack of suitable experience. There was no overall coherent focus on skills training in the country, she said. Germany had used its open economy to put pressure on both workers and firms to remain productive and at the cutting edge of technology. In South Africa certain sectors in South Africa were globally competitive, but “too many sectors” were not.

“South Africa has to raise its competitiveness across the board… This is the only long-term solution to structural weaknesses in our economy that presents itself through large current account deficits!” Well put, Mrs. Governor. lets see how the esteemed Ministers in the various affected Departments are dealing with these suggestions…..

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