Labour Minister Nomakhosazana Meth has told Parliament that her department was “busy with reinforcing the capacity of the [labour] inspectorate” to make “physical visits” to businesses around the country as part of her pledge that BEE is here to stay.
“We are going to be reinforcing that [BEE compliance] by appointing more than 20,000 interns to be able to access and be able to be available to all those places that we need to get to.”
How much will that cost?
At the private sector minimum wage, that would add an annual wage bill of over R5-billion. However, the government is allowed to pay workers less than everyone else; at the “public works” minimum the additional cost would be around R2.8-billion.
But the real cost of the 20,000 “interns” could be much higher, since that many people will need tiers of managers to coordinate effective racial inspection of businesses across the country.
The cost might be much lower, if the interns do not work all year round, but it is worth recalling that there are more than 10 million formally employed South Africans and about 80% of them are expected to be in the kinds of medium and large businesses that are covered by the Employment Equity Act (EEA, including last year’s amendment). So those 20,000 might have to work year round, every year, after all.
Historical race inspectors?
The other terrible question is what will these 20,000 people be asked to do?
If a company says that its managers are all black, and an inspector comes along, by what standard will they check if that is true?
In order to think about that question, or those 20,000 questions, it helps to look back at history, and perhaps the most sympathetic character to also be an apartheid-era race inspector, Frederik van Zyl Slabbert.
Slabbert recounts in his book The Last White Parliament that in his official duties he occasionally had to make race “inspections in loco”, going off to people’s businesses or homes to see if they were racially what they claimed to be. He opposed the whole apartheid scheme, and so was sometimes asked to do this by people who knew they were breaking the law by claiming to legally be a different race.
In one particularly moving instance that is worth recalling, a white man married a coloured woman in 1952, illegally. “Law cannot stop people from loving one another.”
With love came children. Some of their birth certificates had to be forged to keep the family together, but by the time his grandchildren came along, the school inspectors found that some were white, others coloured, and so they could not be admitted to the same school.
It is, in some ways, an almost unspeakably bizarre fact of apartheid that siblings were legally defined as being of different races. But the record shows it happened, and not just once.
In this particular instance, Slabbert saved the family and reclassified them all as white so that the children could go to better-funded schools, through a mechanism of the Population Registration Act.
Three factors matter, especially here.
One, racial classification was forced.
Two, the mechanism for testing race was absurd. Slabbert did not use an actual “pencil test”; his accounts and various other sources show that while this did happen, it was much less common than some younger, literal-minded people sometimes suppose. However, the legal requirements to try to stop people from lying were highly invasive, bizarre and necessary precisely to the extent that people were incentivised to lie about their race.
Three, the stakes of racial classification were life-changing. People were willing, even desperate, to lie. A proud grandfather could be brought to his knees, literally, weeping and begging, because one grandchild’s hair was curlier than another’s – and that could make a shocking difference to his life chances.
Is there anything like that in the work those 20,000 inspectors will have to do? Will there be any begging at their feet? Will there be any high stakes in whether they accept one classification over another?
Those are difficult questions that I will come to next. What is not difficult to answer is: “How will the inspectors know whether someone is telling the truth about their race?”
The answer is, they will not. There is no workable legal standard. The notion that any department can simply say “whatever your apartheid classification was, or would have been, that is what it is for us, too”, does not work, because in the apartheid system it was legally possible to reclassify – and thousands upon thousands of people did so.
The stakes
The EEA, since 1998, has provided that a “labour inspector … has the authority to enter” businesses, and “question and inspect” employers and employees, pursuant to the law. The EEA in its amended form, provides for fines for repeated non-compliance with these inspections, and the race targets they aim at, of 10% of annual turnover. That would drive most businesses bankrupt. So, the stakes are high.
This is not the same as the original form of apartheid. No one is inspecting six-year-olds to stop them from starting school at the same place. However, labour inspectors will be visiting businesses around the country with the potential consequence of driving people out of business.
Unemployment
This is worse than a waste of money. Hiring 20,000 interns to walk in circles would be a waste of money, but at least it would do no more harm than that. The EEA is poised for worse.
The argument is quite simple: anyone who pulls their money, or talent, out of South Africa rather than submit to the labour race inspectors will have reduced the economy’s capacity to add jobs. Anyone who stays, but dedicates their money, or talent, to complying with the race inspectors (or bribing the race inspectors) rather than adding valuable goods and services to the marketplace, is also adding to joblessness.
Economic growth and job growth are pedals on the same bicycle. Labour inspections put a very thick pencil through the spokes of the wheel.
Rebuttal
“Minister, how do you intend to deal with the further exodus of skills from South Africa, and the large amount of unnecessary red tape for employers forced by race-based classifications, considering that both are contributing towards further stagnation of our economy?”
This was asked by DA MP Desiree van der Walt.
“The aim of this act is to ensure that we address injustices of the past,” answered Minister Meth, who went on to talk about the EEA’s “intention”, without directly addressing Van der Walt’s questions about skills flight and red-tape costs.
“Would the minister please share the thought processes behind the belief that no current legislation or regulations are counterproductive to job creation?” came the follow up from Van der Walt.
To her credit, Meth acknowledged that compelling new companies to comply with expensive collective labour bargaining agreements had been found to be counterproductive, but on the matter of red tape to do with race, again there was no comment.
But the toughest question from Van der Walt was this: “Has the minister considered using the UN’s Social Development Goals as an indicator of redress and development instead of race? If not, why not?”
Meth: “No, I haven’t investigated that particular approach.”
Will there be 20,000 race inspectors, but not one investigation into real social development? DM