South Africa's economic problems are often blamed on trade unions and their wage demands. However, several international research reports say something different.
The Minister of Finance's medium-term budget policy statement (MTBPS) provoked a variety of responses to South Africa's political economy challenges. The recommendations to potentially revive economic development cover various areas in macro- and micro-economic policy planning.
One prominent view is that trade unions need to be constrained as their activities are impeding economic development. Informing this view are ideological biases and a reductionist approach to the country's wage debates.
Recent articles on prominent financial and business media platforms exemplify these beliefs. The writers believe all South Africa's economic problems will be resolved through systemic wage reduction (especially in the public sector) and by overlooking trade union policy recommendations. These sentiments might be popular among supporters of free-market or orthodox economic systems, but they are not suitable for South Africa's post-apartheid economy because of the following reasons:
First, trade union bashing erodes the legitimacy and implementation of social compacts. President Cyril Ramaphosa has initiated several social compact interventions aimed at resolving economy challenges. These include jobs and investment summit commitments that were produced in tripartite discussions between social partners:...