When racial matters arise in South Africa, they invariably provoke a great deal of visceral reaction. This is eminently understandable, though it often obscures subjects which need serious and sober deliberation. The recent Dis-Chem affair is a case in point.
The contours of the controversy are generally known: the firm’s CEO Ivan Saltzman issued a memorandum prohibiting the further employment or promotion of ‘white individuals’. This was to avoid the fines – as much as 10% of turnover, which would ‘cripple the business’ – that pending employment equity legislation would impose.
Critics, including the IRR and myself, have pointed to the racial reductionism in this.
Whether intentional or not (and probably not), it represented a repudiation of non-racism. Those who have expressed support for it, such as public intellectual Eusebius McKaiser and Small Business Institute head John Dludlu, have framed their views in terms of race-based transformation. This is buttressed by moral claims. Since white people were advantaged by past policies, compensatory or corrective discrimination is in order now.
The latter assertions dovetail with the outlook of the state, at least insofar as it is discernible from the Employment Equity Amendment Bill that is awaiting the President’s signature.
In 2019, Minister of Employment and Labour Thulas Nxesi explained it in relation to the unsatisfactory state of workplace transformation, and pledged: ‘We are going to start to be very harsh. The reason we are focusing on employment equity is that we need to address the inequality that is deeply rooted. All statistics show that as South Africa we are doing very badly.’
To right these issues, fines that will quite predictably bankrupt firms are envisaged. Firms not being in oversupply in South Africa, that is a very harsh prescription indeed, and would ensure that as South Africa, we continue to do badly.
If it is a matter of concern that workplaces fail to reflect the demographics of the overall workforce, or to achieve plans to change their demographic composition, the natural question should be to ask why.
Very little insight
Interestingly, the reports of the Employment Equity Commission – these reports are invariably used to demonstrate the dire state of affairs – provide very little insight into this question. It seems to be enough to point to the failure to align staff with population ratios to justify calls for more intrusive government intervention.
This is a remarkably incurious posture to take for something that supposedly enjoys such priority. Perhaps it’s not considered worth reflecting on, as it’s convenient to bring out a predetermined set of explanations, namely apartheid and current white racism. Is this necessarily the case? More to the point, do the implications of this reasoning – that demographic representivity is a moral imperative, and that a failure to achieve it is evidence of racism – make for a compelling programme of action?
It strikes me too that business is on the whole rather coy about explaining its own representivity deficiencies, even as it draws criticism. This is odd, as one seldom hears an executive openly denounce the policy (B-BBEE sometimes, employment equity as good as never).
In my view, while a great deal is said about matters relating to justice and socio-political philosophy, not enough is said about some of the more pedestrian and pragmatic issues.
Speaking at a conference organised by Idasa in 1995, then President Mandela referred to affirmative action (at that point not written into law) as ‘corrective action to bring previously disadvantaged people to the same competitive levels as those who have been advantaged’. This was an unobjectionable position and was described by Idasa’s director at the time as signalling that ‘the emphasis is on equality of opportunity and not on equality of outcome’.
This understanding would above all have meant improving labour market inputs – skills, in other words, to give black people a meritocratically competitive chance.
The approach, however, shifted from opportunity to outcomes. Towards the end of 1997, he quoted former US president Lyndon Johnson to define the goal ‘not just equality as a right and a theory, but equality as a fact and as a result’.
This was in essence the approach taken by the Employment Equity Act the following year, and more importantly came to be the operating assumption behind most thinking on redress and corrective measures. This is the approach taken by McKaiser and Dludlu.
‘Lack of skills’
Skills, meanwhile, have had a rather difficult journey in South Africa’s policy matrix. They’ve been a recurrent talking point in official plans and party documents. The Reconstruction and Development Programme, for example, stated: ‘The lack of skills forms a major obstacle to the development of a modern economy able to support a decent living standard for all our people.’
Later in the decade, then labour minister Tito Mboweni promised a ‘skills revolution’, and in 1998 – around the time that the Employment Equity Act was passed – the Skills Development Act was put through. From this came the Sector Education and Training Authorities to which businesses were required to contribute.
Later came the Joint Initiative for Priority Skills Acquisition, and then the New Growth Path and the National Development Plan, both of the latter stressing the importance of skills.
This is in addition to the very respectable spending on education that the state has undertaken. World Bank data has South African state spending on education at 5.6% of GDP, against 4.3% for upper middle income countries as a group, and 5% for Eastern and Southern Africa.
The most generous assessment of all of this is that its outcome has been disappointing. A lack of skills remains a severe brake on South Africa’s growth prospects and the labour market participation of millions of South Africans.
This has been acknowledged. The Green Paper on International Migration described the situation as one in which ‘the economy is desperately short of skills’. The Report of the High Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change similarly drew attention to the issue. These match claims by officials, by business representatives, the findings of fieldwork research and a large body of anecdote.
ManpowerGroup, a multinational business services corporation, conducts a regular global survey of ‘talent shortages’ as perceived by employers. In 2022, 78% of South African firms responded that they struggled to find the right people to fill roles. Going back a few years, its 2018 survey – undertaken before the pandemic, and thus perhaps a better reflection of the state of the job market in ‘healthy’ times – found that 32% of firms had trouble finding suitable skills. It also set out where the gaps were: artisans, managers and executives, sales representatives, engineers, technicians, accounting and finance personnel, office support, drivers, teachers and IT professionals.
Deeply serious problem
This is a deeply serious problem on its own. These skills are the muscles and sinew of both a productive modern economy and one that is innovating into the future. And among these skills are certainly the requirements for business leadership, the central issue for advocates of transformation.
The most revealing evidence about the reality and consequences of skills shortages can be found in the public sector. Given their tax-guaranteed income streams and relative immunity from consequences, government bodies have been able to pursue transformation hell-for-leather. And skills remain a cloying problem. Just a few days ago, the Minister of Trade and Industry, Ebrahim Patel, told a Parliamentary Committee that his department was unable to find suitably skilled candidates for the board of the South African Bureau of Standards. This institution – indispensable for ensuring product quality and integrity – has been without a full board and full-time CEO since 2018.
Contributing in no small measure to Eskom’s economy-destroying woes has been the loss of technical capacity. An internal skills audit reported on in the media spoke of a ‘strong need to fortify existing skills as well as build the pipeline’. Over a three-month period – April to June this year – Eskom shed 504 technicians with a combined 13 364 years of experience at the company.
And continuing a long-running theme in state governance, in August, Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini-Zuma pointed to the issue as an explanation for the state of South Africa’s municipalities.
‘Let me just say,’ she remarked, ‘the skills shortage in municipalities is also a reflection of skills shortages elsewhere. There are ongoing efforts to improve skills in municipalities – and, of course, those efforts mean that all the municipalities must employ people in their administration who have the skills, the experience and the competencies to lead those departments or the municipality itself.’
Leave aside that ‘the skills, the experience and the competencies’ have not been decisive criteria for leadership in the public service for a long time. (Maria Rantho, one-time ANC MP and later Public Service Commissioner, once memorably said that it was ‘imperative to get rid of merit as the overriding principle in the appointment of public servants’; Dr Dlamini Zuma, President Ramaphosa and their party have stoutly defended the politicisation of the state through cadre deployment.) It is interesting that Dr Dlamini-Zuma concedes that this is a problem across the economy.
Logical disconnect
Yet there seems to be very little introspection of this matter and its implications for the private sector’s ability to meet equity demands. A logical disconnect exists: skills are a major constraint on our future, except where state demands for preferential policies are concerned.
This has things backwards. The state can survive even when it ceases to perform a useful function. It’s simply a set of institutions that we assume we need, and which in any event have the ability to perpetuate themselves. Failure is a much more consequential issue for a private sector firm. And in terms of the pending legislation, not only is scant allowance made for the reality of the scanty availability of skills and all that this means, but not achieving what the state demands may be punished by destroying offending firms.
Where the transformationists have a very real point is in noting that this state of affairs has its origins in the pre-democracy era, apartheid, segregation, colonialism and so on. They may have a point that an element of prejudice or the ‘old-school tie’ network remains in place, which curtails opportunities – although the nature of this would need to be carefully studied rather than assumed as an axiom.
Incontrovertibly though, the under-education of the black population was a scandal in itself (as was the social dislocation that those policies fostered), and an economic millstone in the current era. However, it’s also worth noting that one of the more distressing failings of the post-1994 era has been the state’s inability to correct the deficiencies in our education system.
Let me quote from a report on the results of a respected international study (the report was produced by academics at the University of Pretoria) conducted in 2016: ‘78% of South African Grade 4 children were not able to reach the lowest benchmark compared to 4% internationally.’ That ‘lowest benchmark’ means children who ‘cannot read for meaning or retrieve basic information from the text to answer simplistic questions.’
Equally distressing: ‘A total of 0.2% of South African learners did attain the Advanced Benchmark … compared to 10% internationally.’ (These are learners able to ‘integrate ideas as well as evidence across a text to appreciate overall themes, understand the author’s stance and interpret significant events’.)
Singular injustice
This is the foundation of the education and skills malaise. To my mind, it has been a singular injustice, hitting particularly hard the poorest and those most dependent on public services as an enabler of their prospects for mobility.
Incidentally, these words from 2008 help to illuminate the nature of this crisis: ‘We will continue talking about importing skills and the skills shortage for the next 20 years if we don’t improve the quality of our education – and clearly the teachers are not well trained.’ This was Thulas Nxesi, speaking as a trade unionist. As minister a decade later, the implications of all this were not in evidence.
The blunt fact is that, by all evidence, the skills needed to manage the economy – more to the point, the skills needed to manage and innovate existing firms, let alone to expand them or to bring new ones into existence – are in desperately short supply. The skills pool is a shallow one, and to the extent that high demand creates opportunities for those with the desired attributes, along with the lure of global opportunities (emigration in other words), it is also a volatile one.
It does very little good to point to ‘imbalances’ in the distribution of economic benefits, even if there is truth in this within its own frame of reference. To do so is to invoke a variant of a crude ‘lump of labour’ assumption – that there is a fixed quantum of opportunity, numbers and ratios of participants and that can all be shifted about. (Dis-Chem’s response was an attempt to answer this logic in its own terms – hence Saltzman’s words: ‘It’s the ratio between white and black that counts. So, when no suitable black candidate is found, and a white is appointed, we need several blacks just to maintain the status quo, never mind moving forward.’)
Rejuvenated public education
A post-1994 programme of affirmative action, even an aggressive one, might have been possible in an environment of high growth and rapid skills acquisition.
This would in the first instance have required a completely rejuvenated public education system, paired with effective vocational training and adult education. It would have needed to draw on every resource available, particularly the expertise of the ‘non-designated’ or ‘advantaged’ groups who had an indispensable contribution to make.
Above all, its focus needed to be on inputs rather than on outcomes. In the absence of all of this, the costs of such policies – and there are always costs – were inevitably going to be very difficult to carry.
As firms contemplate their futures in what is in any event a very difficult operating environment, these costs may well become impossible to carry.
[Image: Gerd Altmann from Pixabay]
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