Public Works as a Response to Labour Market Failure in South Africa

Contents

Contents ..................................................................................................................................... 2

Chapter I: Introduction to the Problem ....................................................................................... 4

The Role of the Labour Market in Poverty and Inequality ................................................ 5

The Costs of Unemployment ........................................................................................... 7

Chapter 2: The Characteristics of Unemployment in South Africa ............................................. JO

The Provincial Decomposition of Unemployment ......................................................... .11

Gender, Location and Racial Decomposition .................................................................. 12

Policy Responses to Segmented Unemployment ............................................................. 15

Chapter 3: Causes of Unemployment in South Africa ............................................................... .17

Structural Transformation of the South African Economy .............................................. 17

Domestic Political Change ............................................................................................. 18

Global Unemployment Trends ......................... ..

The Role of the Informal Sector ..................................................................................... 20

The Unemployable ......................................................................................................... 21

Chapter 4: Job Creation and Public Works, an Analytical Framework for Programme Design .... 24

Formal Sector Employment Creation .............................................................................. 25

Informal Sector Employment Creation ........................................................................... 25

A Definition of Public Works ......................................................................................... 27

A Public Works Analytical Framework .......................................................................... 28

Public Works Objectives ................................................................................................ 28

The Nature of the Employment Deficit ........................................................................... 31

Public Works Timescale ........................................................... , ..................................... 32

Beneficiaries and Targeting ............................................................................................ 34

Economic Objective ............................................. .

Programme Concept ....................................................................................................... 38

The South African Conceptualisation of Public Works ................................................... 40

Conclusion ..................................................................................................................... 41

Chapter 5: The Zibambcle Programme, A Case Study from KwaZulu Natal .............................. .42

Poverty aIld Unemployment in KwaZulu Natal ............................................................. .42

The National Context ..................................................................................................... 44

The KwaZulu Natal Department of Transport and Job Creation ..................................... .44

The Zibambele Programme ............................................................................................ 46

Financing ....................................................................................................................... 47

The Zibambele Budget ................................................................................................... 48

The Selection of Roads for Zibambele Contracting ........................................................ .50

Selection of Zibambele Contractors ................................................................................ 51

Determination of Vage Levels ....................................................................................... 5 3

Payrnent Mechanisms .................................................................................................... 54

Expansion of the Zibambele Programme ....................................................................... .56

Extension to District and Provincial Roads ..................................................................... 56

National Road I
aintenance ........................................................................................... 57

Diversification of Zibambele Employment ..................................................................... 58

Zibambele as Entry Level Emerging Contractors ............................................................ 58

Micro-Credit ................................................................ .

Integration \'ith other Poverty Alleviation Initiatives ...................................................... 60

Conclusion ..................................................................................................................... 61

Chapter 6: Zibambele Cost Effectiveness and Impact Assessment..

Departmental Cost Comparison .............................. .

Vage Rate Comparison .................................................................................................. 64