April 19, 2007

South Africa 2003-04: Cheap Labor, Unemployment, and Technology

Fourth in a series of posts about South Africa, originally written during the 13 months I lived there in 2003-04.

Massive unemployment in South Africa — at least 30 percent, 42 percent by some estimates — makes labor extremely cheap. In 2002 the government instituted a minimum wage, presently R864/month (about $145 at current exchange rates). Vast numbers of people paid off the books still get less than this. For most people, commuting costs eat up around 20 percent of a minimum-wage salary. What remains permits bare subsistence for a small and extremely frugal family, but no more. Yet as in Henrietta's case, the ravages of AIDS translate into increasing numbers of orphans and a decreasing ratio of healthy, employed adults to the sick and the very young.

Cheap labor means that by American or European standards, many workplaces are hugely overstaffed. At restaurants you're greeted by a phalanx of waiters and waitresses. You'd think this would mean fantastic service; instead, it only creates confusion about who's responsible for you, and most of the staff spend the bulk of their time standing around. Drop into a hair salon for a simple haircut: one person greets you, another washes your hair, a third dries it and preps you for the stylist, while yet a fourth person brings you espresso. Self-service at petrol stations is completely unheard of.

Overstaffing extends to households as well. People in our income bracket typically employ not just one, but two, three, or more workers: a housekeeper, a gardener, a nanny, 24-hour security guards shared by several houses on a city block. The looming threat of unemployment makes these domestic jobs into sinecures. When an owner leaves a house, workers fight tenaciously to stay on with the successor.

Cheap labor also means that a lot of superfluous work gets done, just because it can. Cars are washed so often you'd think the paint would wear off. Public restrooms remain spotless all day. Lawns are constantly mown. Hedges are hacked to stubble. Tee shirts and even underwear are ironed. Breakfast is served in bed. (No, we didn't sink to this, but it happens.)

Cheap labor and fear of unemployment create a double disincentive to introduce more efficient technology. Along highway margins, teams of men whale away at miles of grass with hand scythes. Occasionally somebody fires up a gas-powered weed-whacker, but the huge mowing machines that decimate American median strips seem unknown here. Guys sit placidly beside boom gates all day, lifting them for vehicles. Office staff copy information from one paper form to another, while computers sit idle on their desktops. Though she will use the washing machine and dryer for clothes, Henrietta spends hours cleaning dishes by hand rather than deal with our (admittedly terrible) dishwasher.

Government strategy for fighting unemployment includes huge, deliberately labor-intensive public works programs. (Plans for improving workers' life chances once these projects dry up remain vague.) Simultaneously, major export industries such as mining and automobile manufacture have invested heavily in high-tech efficiency improvements, shedding hundreds of thousands of unskilled jobs In the last decade. Public education is in crisis, with business complaining that high school graduates cannot read. Innumeracy is chronic; even much of the better-educated population cannot compute simple sums, much less interpret statistics. You don't realize just how huge a problem innumeracy can be until you've tried to get a refund from people who can't add. Thus a vast and widening gulf separates the fortunes of unskilled workers from those of their skilled and educated counterparts. To us, it's a stark reminder of the embeddedness and invisibility of human skill in societies like the USA, where a far larger percentage of citizens can claim basic literacy, numeracy, and familiarity with complex technical systems.

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