Wages of the unskilled are too high: report

South Africa's lack of employment has now become a crisis that is over two decades old, said economist Mike Schussler as he presented the trade union UASA's 2012 South African Employment Report (SAER).

According to PoliticsWeb, Schussler said that the problem is that the cost of producing goods and services in South Africa has risen too quickly. Unskilled wage rates have rocketed, while management and specialised skills are often underpaid.

"These factors, more than anything else, explain why people cannot find work as the price of certain labour has become unaffordable. South Africa's unskilled earn too much in both relative and in absolute terms," Schussler said, adding that in the 2nd quarter of 2011, less people were employed in manufacturing in South Africa than any time since 1972.

"The fact is that the productive sectors in South Africa have now struggled for decades to create employment." UASA suggested that South Africa should employ people in "training" jobs at lower salaries for a period of time, allowing them to gear up their employability, PoliticsWeb reports. A starting wage subsidy may help lower the effective salaries of unskilled and semi-skilled people and could make a difference in the rate of unemployment.

Read the full article on www.politicsweb.co.za.
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