We're Just Different - Job Creation

EXPLANATORY NOTE: Why is the Western Cape 'Just Different'? Why can it create jobs when the national government destroys them? Why does South Africa have the highest unemployment rate in the world?

We’re Just Different – Job Creation

Government policy determines whether people can find work and escape poverty, or whether they remain unemployed and poor.

The government that South Africa elects, and the government that the Western Cape elects, propose radically different solutions to job creation.

Under the South African government, South Africa, with an unemployment rate of 35.3% at its narrowest definition (i.e. people who have given up looking for work have been excluded), has the highest unemployment rate in the world. The real rate, which includes discouraged work seekers, is 46.2%.

Why does South Africa have such high unemployment?

Why? Because the South African government wants to control the economy itself rather than to allow the private sector the freedom to flourish.

South Africa has established state owned monopolies to, amongst others, provide electricity and to run the transport network. It dictates who businesses can buy from, who they can sell to, and who must own them. It dictates who businesses can employ and how much they must be paid.

Skilled workers (who create work for unskilled workers) have left the country in droves and foreign investors are setting their businesses up in other countries who have less onerous rules.

The result is the highest unemployment rate in the world.

Many of these policies are promoted as ways to 'transform' the racial inequalities in the South African economy, but since Stats SA started releasing their Quarterly Labour Force Survey (QFLS) in 2008 unemployment amongst black people has increased from 27.0% to 50.7% and amongst coloured people from 19.5% to 37.6%.

Meanwhile, we have a billionaire president who made his money as a beneficiary of his own party’s transformation policies, and elected officials who drive state funded luxury cars and earn sums of money that ordinary South Africans can never even dream of.

How is the Western Cape Different?

The Western Cape tries to create the circumstances that will attract investors, and, despite being forced to follow national government policies, has managed to keep unemployment substantially lower than in any other province. Its expanded unemployment rate is 16.2 percentage points lower than South Africa (30.4% vs 46.2%). (See chart at top of page)

The Western Cape Government supports a social free market, the privatisation of state owned enterprises, the decentralisation of power, and the removal of the rules which dictate who can own businesses, who they must employ, and who they can buy from and sell to.  

If freed from the shackles of national government policy (which only Cape Independence will realistically achieve), the Western Cape will quickly be able to drastically reduce unemployment. The primary beneficiaries of this will be black and coloured.