The development of labour market institutions in Namibia

Brits, Anne-Marie (1999-11)

Thesis (M.A.)--University of Stellenbosch, 1999.

Thesis

ENGLISH SUMMARY: Wage levels and employment are influenced by a number of factors, the individual effect of which is difficult to isolate. The influence of institutional factors such as labour market policies and legislation is, however, often disregarded or underestimated. This study highlights the importance of labour market institutions as one of the factors influencing wage levels and employment. The study starts off with a review of economic theories posited in order to explain wages and employment, and arrives at the conclusion that there is no universally applicable theory. Although the theory of supply and demand could perhaps be regarded as the most relevant, there are a number of theories that explain wage and employment levels by focusing on different aspects of the employment relationship. Opposing viewpoints regarding the need for government intervention in the economy are then discussed: should the market mechanism be allowed to determine wage levels and levels of employment, as seems to be the popular World Bank perception, or does government have a social and moral obligation towards its citizens to intervene in the labour market, even though such intervention may be regarded as distortionary (the view of the International Labour Organisation?). Some common ground does appear to exist in that there seems to be agreement on the need for some basic form of intervention to ensure "minimum" standards acceptable to society. However, the extent, timing and manner in which governments intervene are of considerable importance. A review of the modem welfare state then provides the basis for the argument that the - - labour market institutions of today are not the result of economic impulses only, but rather the combined outcome of economic, political and social considerations. This is followed by the presentation of country specific evidence regarding collective bargaining, the minimum wage and social security structures in both industrialised and developing countries. Such discussion puts the development of labour market institutions in Namibia into perspective, and serves as basis for comparison. Following the above, detailed evidence regarding the development of ~amibian labour market institutions is presented. By addressing labour relations issues such as worker exploitation, the protection of workers, and income inequality, government has attempted to create an environment it believes is conducive to economic growth and, over the medium to longer term,job creation. As many of the institutions reviewed in this study were only introduced or adapted some years after Independence in 1990, it is difficult to arrive at anything more than a general impression regarding their effectiveness in achieving government's objectives, and perhaps still too early to judge institutions solely on their economic impact. Although labour market institutions have contributed to increasing wages and non-wage labour costs, it is extremely difficult to isolate their effect on economic growth and employment. Other than addressing historical political and social problems in the country, labour market- institutions appear to not yet have had a significant impact in terms of encouraging economic growth and job creation in Namibia.

AFRIKAANSE OPSOMMING: Loonvlakke en indiensneming word be'invloed deur verskeie faktore waarvan die individuele effek moeilik is om te isoleer. Die invloed van institusionele faktore soos arbeidsmarkbeleid en arbeidswetgewing word dikwels ge'ignoreer of onderskat. In hierdie studie word aangevoer dat arbeidsmarkinstellings weI geag moet word as belangrike faktor wat loonvlakke en indiensneming be'invloed. Die studie begin met 'n kort oorsig van ekonomiese teoriee ter verduideliking van lone en indiensneming. Dit lei tot die gevolgtrekking dat daar nie 'n teorie bestaan wat werklik universeel toepaslik is nie. Alhoewel vraag- en aanbodsteorie moontlik die relevantste is, is daar reeds verskeie teoriee geformuleer wat op verskillende faktore fokus. Teenstrydende standpunte rakende die nodigheid vir staatsinmenging in die ekonomie word hiema bespreek: behoort die bepaling van loonvlakke en indiensneming slegs aan die markmeganisme oorgelaat te word (tot 'n groot mate die Wereldbank se standpunt), of het die staat 'n sosiale verpligting om in te meng met die werking van die markmeganismse, selfs al bring dit ekonomiese verwringings mee? (die standpunt van die Intemasionale Arbeidsorganisasie?). Wat die twee sienings weI in gemeen het, is die feit dat daar tog 'n nodigheid bestaan vir inmenging in soverre basiese of "minimum" standaarde neergele moet word wat vir die gemeenskap aanvaarbaar is. Die omvahg, tydsberekening en instrumente waarmee die staat inmeng is weI ook van belang. 'n Oorsig van die modeme welvaartstaat dien hiema as basis vir. die argument dat modeme arbeidsmarkinstellings die gevolg is van rue net ekonomiese oorwegings nie, maar onder andere ook politieke en sosiale oorwegings. Dit word gevolg deur 'n bespreking van die situasie rakende kollektiewe bedinging, minimum lone en sosiale sekuriteit in ontwikkelde en ontwikkelende lande. Die doel van hierdie bespreking is om die ontwikkeling van arbeidsmarkinstellings in Namibie in perspektief te plaas, en om te dien as basis vir latere vergelykings wanneer die stand van hierdie instellings in Namibie bespreek word. Deur aandag te gee aan kwessies soos arbeidseksploitasie, die beskenning van werkers en inkomsteongelykheid poog die regering om 'n omgewing te skep wat bevorderlik IS vIr ekonomiese groei en werkskepping oor die medium tot langer tertnyn. Aangesien die meeste van die huidige Namibiese arbeidsmarkinstellings eers na onafhartk1ikheid in 1990 bekendgestel of aangepas is, is dit uiters moeilik om meer as s1egs 'n algemene indruk rakende die mate van doeltreffendheid ten opsigte van die bereiking van staatsdoe1witte te verkry, en moontlik ook te vroeg om instellings uits1uitlik vir hulle ekonomiese impak te probeer beoordeel. Hoewe1 die instellings bygedra het tot verhoogde 100nv1akke asook hoer nie-Ioon arbeidskostes, is dit uiters moeilik om die effek van instellings op ekonomiese groei en indiensneming te is01eer. Beha1we vir hulle r01 in die aanspreek van politieke en sosia1e prob1eme in die land, wi1 dit voorkom asof arbeidsmarkinstellings nog nie 'n groot impak gehad het wat betref die bevordering van ekonomiese groei en indiensneming in N amibie nie.

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