This article was first published by BizNews on 20 November 2024
While there are doubtlessly important and crucial people employed by the government, the public sector has become synonymous with incompetence, bloat, corruption and entitlement. Recently, full-time staff in Parliament, including cleaners, can expect to earn R350,000 a year by 2026 – double their current salaries.
This comes after trade unions rejected a 3% pay rise, with their initial demand being 12%. Despite finance minister Enoch Godongwana’s insistence on shrinking the public sector wage bill, government worker salaries continue to skyrocket – becoming a huge drain on the fiscus. This will see parliament cleaners being paid more than teachers.
Over the last thirty years, the public sector wage bill has increased from 5.6% of GDP (1994/1995) to 10.4% of GDP (2023/2024).
The average public sector worker earns (R41,200) almost double that of the average private sector salary (R26,800). Their jobs are also usually protected from scrutiny, and it is very hard to fire them for incompetence or even corruption.
Unions keep demanding more and more extravagant salaries for their members, leveraging political power and intimidation to get what they want. But while unions will fight tooth and nail to get more and more money for their due paying members, they aren’t concerned with reality, or non-members.
Trade unions have often pushed for legislation and regulations that have directly caused unemployment. But in the public sector, they continue to guarantee that the budget is unsustainable and that importance government projects like law enforcement and education are underfunded.
Public sector workers also seldom face any real competition to incentivise good work. Their jobs are very secure, and the only real threat to if they get paid or not is if their superior is too corrupt or incompetent to remember to pay them. The success of their work does not really factor into if they are rewarded are not. Their income will just keep going up, at the expense of the taxpayer.
The government has often touted public sector employment as a solution to unemployment, but public sector workers are more expensive, less qualified, less competent and just downright worse than their private sector alternatives.
Private sector jobs have meritocracy baked in; if you don’t perform well at your job, you don’t get a raise. You don’t get the promotion. And if labour regulations were more logical, you’d get fired. While the public sector rewards union membership, crony relationships and merely existing, the private sector rewards hard work and skill.
But most importantly, private sector jobs don’t cost tax money. They generate tax money. While every private sector job positively contributes to the fiscus, every public sector worker is a drain on a dwindling tax base.
The solution to unemployment therefore cannot be to increase the number of public sector jobs. In fact more jobs could theoretically be created by cutting the bloat and removing public sector jobs. The extravagant and redundant public sector jobs drain tax money. With lower taxes, businesses could afford to hire more workers. The economy would grow, generating more tax money, leading to increased infrastructural development, leading to more economic growth.
If the government is serious about balancing the budget, it needs to rein in the trade unions and start retrenching the bloat. Parliament shouldn’t be hiring its own cleaners anyway. It should be outsourcing that function to a private company, tendered through an open and transparent tendering process that prioritises cost-cutting.
And if the government is serious about ending unemployment, it needs to deregulate the labour market. It must become easy to hire and fire, so businesses can take a risk on hiring young and new staff. Legislation needs to be business friendly, so more businesses can create jobs.
That’s how we grow the economy; that’s how we improve South Africa.
