South Africa slipping down the league

Citation

(2011), "South Africa slipping down the league", International Journal of Productivity and Performance Management, Vol. 60 No. 6. https://doi.org/10.1108/ijppm.2011.07960faa.003

South Africa slipping down the league

Article Type: News From: International Journal of Productivity and Performance Management, Volume 60, Issue 6

To compete internationally, SA business needs to increase its productivity. However, over the past two decades, real wage growth in SA has outpaced growth in labour productivity, which has been relatively slow.

In fact, only Mexico’s has been slower, according to an International Labour Organisation ranking of 18 developed and developing countries. It puts SA’s labour productivity growth at about 20 percent from 1990 to 2008. Chile, Argentina and Turkey achieved 60 percent. China topped the log with 305 percent.

SA also shed proportionately more jobs during the recession than any other OECD country. But even as one million jobs were being lost and inflation was falling, the annual increase in the average nominal remuneration per worker accelerated consistently — from 11,8 percent in the second quarter of 2009 to 15,8 percent a year later.

All components of the private sector registered double- digit rates of increase in wages, from almost 30 percent in construction to just under 15 percent in the financial sector, which was also the average increase across the public sector. And since the average remuneration per worker accelerated faster than the increase in productivity during 2009, nominal unit labour costs spiked.

Unsurprisingly, SA’s recovery has been muted and job creation slow to pick up.