“Some inequality matters; some doesn’t matter, except to the envious. Income inequality doesn’t matter. The most important inequality is between people, like me, who have enough for a happy life, and those who haven’t. More specifically, the most important inequality in SA is between those who have a job in the formal economy and those who haven’t. There is an obsession among certain privileged people — university professors, trade union leaders, big media journalists and socialist politicians — about income inequality. Such people were entranced by Capital in the 21st Century, by French economist Thomas Piketty, about this unimportant inequality. They seem fixated by people richer than themselves and are contemptuous of those poorer than themselves. When they discuss inequality, they will spend most of the time fulminating against the huge bonus of some corporate executive and little if any time discussing the 36% of our population who are unemployed and in dire poverty”.
Read the full article by Andrew Kenny, a consulting engineer, Labour laws feed poverty while elite get fat on dogma first published by Business Day today on BDlive.
Further extracts
But it’s worse than this. Not only does this rich elite have no sympathy for the unemployed but they promote policies that will make their lot worse. Our disgusting, immoral labour laws certainly have the effect, and might have the intention, of shutting poor people out of the economy.
To take the worst example, section 32 of the Labour Relations Act says that a gang of rich, powerful men (from big corporations and strong trade unions) can decide the wages that poor employers are forced to pay their employees. These wages are so high they cannot afford them, and therefore can’t employ poor workers, who are shoved onto the scrap heap of unemployment.
Suppose the rich men decide that the minimum wage in a sector is R4,000. Mr Modise, a poor man trying to start a factory in Soweto, offers an unemployed man, Mr Shezi, a wage of R3,900. No, no, no! The rich people will not allow this. If Shezi has a child, they will allow him to accept a child grant of R320 a month. But they will not allow him to accept a R3,900 wage. They think it is better that Shezi starves to death rather than works for R3,900.
. . . . .
A silly claim, repeated over and over again, is that SA is the “most unequal society in the world”. What nonsense! Show me a list of the Gini coefficients of the 195 countries in the world with SA at number 195. No one can. North Korea is far more unequal than SA. There, a tiny, communist elite is bloated with luxury and privilege while the great mass of the people suffer in dire poverty. This is only to be expected in a Marxist country. Communism naturally increases inequality; capitalism naturally reduces it. However, SA does have extreme inequality of the important kind, and our labour laws are the most important reason for it.