BEE Partner, South Africa Economy Watch

Job hopping by Black people

Job hopping by Black people is increasingly being seen as a problem. Businesses train Black people into positions only to find that they leave the position for a new company. Understanding the reason for job hopping becomes a staff retention strategy to prevent this practice.

The primary reason driving job hopping is culture. Some company cultures do not accept Black people’s cultures and backgrounds, resulting in their being forced to assimilate Western business culture to gain access to the mainstream economy. This can be uncomfortable for a Black person. Read the rest of this entry »

The problem in most organisations seems to be that value innovation is kept at the corporate level and does not permeate the entire organisation. Employees need to see themselves as a critical resource in the job that they do, not just for the organisation, but also for themselves. Put simply, if an organisation creates an environment in which value innovation is encouraged and rewarded, the participating individual’s self-worth will improve, which in turn will have a positive spin-off on job satisfaction, job involvement, and, ultimately, customer satisfaction and loyalty. Read the rest of this entry »

In Australia, despite the paradigm shift in macroeconomics from Keynesian demand management to the monetarist supply-side approach, empirical evidence still supported the use of expansionary fiscal and monetary policy and public sector job creation (for example, Mitchell, 1987a, 1987b, 1994, 1996; Mitchell et al., 1995). The solutions proposed, however, relied heavily on income policy guidelines and were not, in retrospect, comprehensive enough. Further, the stimulus that would be forthcoming was not conceived to be adequately focused to support environmental sustainability, a goal usually ignored in orthodox macroeconomics. In this context, the Job Guarantee reflects work that was conceived when this author was a fourth-year student at the University of Melbourne in the late 1970s. Read the rest of this entry »

In the face of wage—price pressures, the Job Guarantee approach maintains inflation control by choking aggregate demand and inducing slack in the non- buffer stock sector. As the slack does not reveal itself as unemployment, the Job Guarantee may be referred to as a ‘loose’ full employment. This leads to the definition of a new concept, the NAIBER, which, in the buffer stock economy, replaces the NAIRU/MRU as an inflation control mechanism. The BER is the ratio of buffer stock employment to total employment.

As the BER rises, due to an increase in interest rates and/or a fiscal tightening, resources are transferred from the inflating non-buffer stock sector into the buffer stock sector at the fixed buffer stock wage. Read the rest of this entry »

What would happen if the Job Guarantee were introduced to solve the problem of unemployment in this economy? For simplicity of argument, we assume the Job Guarantee wage is set at the bottom of the private sector wage structure although not low enough to enforce poverty on full-time workers. If there were poverty level wages being paid in Sector B, then there would be pressure on Sector B employers to restructure their jobs in order to maintain a workforce. The Job Guarantee wage sets a floor in the economy’s cost structure for given productivity levels. The dynamics of the economy change significantly. The elimination of all but wait unemployment in Sector A and frictional unemployment does not distort the relative wage structure so that the wage—wage pressures that were prominent in the upturn in the NAIRU economy are now reduced. But the rising demand softens the product market, and demand for labor rises in Sector A. The Job Guarantee introduces no new problems faced by employers who wish to hire labor to meet higher sales levels. They must pay the going rate, which is still preferable to appropriately skilled workers than the Job Guarantee wage level. The rising demand per se does not invoke inflationary pressures as firms increase capacity utilization to meet higher sales volumes. Read the rest of this entry »

In this section we focus on inflation control and show that the Job Guarantee, able to simultaneously generate full employment and price stability, is superior to the current NAIRU approach, which uses unemployment to maintain inflation control. Broadly, there are three options available to an economy that desires price stability. First, as in the NAIRU approach, it can use unemployment as a tool to suppress price pressures. Second, it can introduce a Job Guarantee and use movements in the Buffer Employment Ratio (BER) to control inflation. Third, it can introduce the Job Guarantee policy and augment it with an incomes policy. We do not consider this third option.

The Role of Unemployment in Inflation Control

The OECD experience of the 1990s shows that high and prolonged unemployment eventually results in low inflation (Mitchell, 1996). There are several observationally equivalent theoretical explanations for the inflation—unemployment trade-off. Read the rest of this entry »