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Press statement on release of Labour Markets and Social Frontiers

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Press statement on release of Labour Markets and Social Frontiers

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									Trends in HIV/Aids and the Labour Market a key focus in Labour Markets and Social Frontiers The South African Reserve Bank’s 4th volume of Labour Markets and Social Frontiers, released today (Tuesday, 28 October 2003), focuses on HIV/Aids and the labour market. The editor notes that the relationship between company or sector factors and HIV susceptibility and Aids vulnerability can clarify future HIV/Aids trends and generally contribute to the broader body of research.

The volume explores these links by looking at different sectoral vulnerabilities in the economy. It features a case study demonstrating possible avenues for business’s response to the epidemic and an analysis of the distribution of HIV/Aids costs between employers, communities and government.

Furthermore, the publication includes a novel methodological approach that was used in Soweto for tracking the impact of HIV and Aids deaths on household income and expenditure; a commentary on the state of HIV/Aids data in South Africa; and a book review reflecting on labour standards and how they are likely to evolve given the country's HIV/Aids prospects.

The Labour Markets and Social Frontiers series reaches out by engaging with broader labour markets and social development issues in order to develop a holistic more integrated knowledge base and policy oversight. The views expressed in the series are the authors’ own and do not necessarily reflect the views of the South African Reserve Bank.

Some notable issues that emerge from the analyses challenge conventional thinking. Firstly, sectoral exposure to the HIV/Aids costs impacts on the overall economic outlook through the varied sectoral contribution to aggregate output, export earning and employment creation capacity. The first article highlights sector-specific labour market factors that influence the level of exposure to HIV/Aids impact. The analysis covers community as well as workplace dynamics as integral spheres of the labour market. The paper

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argues that existing macroeconomic models often do not adequately consider workforce driven differences in assumptions about sectoral risk profiles.

Secondly, an effective business response should recognise that dynamics in the workplace together with communities, which supply the workforce, form a unified framework for intervention. The second paper outlines a possible framework for effective business response to HIV/Aids and shares company experience in this regard.

Thirdly, the share of HIV/Aids costs between households, communities, employers and the state has far-reaching implications for the economy as a whole. This point is taken up in the third article, which is a top-line analysis of trends in access to non-wage benefits among workers as proxies for employers' allocation of current and potential HIV/Aids costs. The paper calls for a more nuanced analysis of the net macroeconomic effect of cost-averse business decisions which, intentionally or unintentionally, influence trends in the allocation of HIV/Aids costs between workers and employers. The major hurdle in this area is limited trend data.

Fourthly, a panel approach for tracking the economic impact of HIV/Aids on households is possible. The fourth article shares practical experiences with a relatively new and unknown data collection method that was adopted for tracking, over time, the impact of HIV/Aids on household access to income, changes in expenditure patterns, savings and debt servicing as well as on labour market participation. This survey also followed changes in economic activities of surviving household members after an Aids death of (a) breadwinner(s) or parent(s).

The commentary on available sources of data on HIV prevalence and Aids as a cause of death brings to bear the fact that the situation is still far from ideal. Much more still needs to be done to strengthen the generalisability of available statistics and to provide an empirical basis for modelling assumptions. However, much has been achieved in South Africa compared to other countries with similar HIV/Aids challenges.
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Finally, labour standards debates are likely to come strongly to the fore in South Africa, given the probable market failures as a result of high rates of HIV/Aids orphanhood. The book reviewed is entitled International Labour Standards: History, Theory and Policy Options. The relevance of the book to South Africa is assessed in terms of the likely market failures such as child labour due to Aids. Should HIV/Aids not be adequately contained, the resultant growth of labour market failures such as child labour can distort the role of markets versus the state in the economy. More importantly, what is the likely impact of child labour on South Africa's compliance to labour standards of the World Trade Organisation and its access to global markets?

This volume also includes a selection of general labour markets indicators profiling the unemployed population between 2000 and 2002.

For more information: Lebo Lehutso-Phooko (012)313-4434

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