Labour Market Policy Responses Amid Globalization: The Case of South Africa

The South African economy is one mired in a long-run, low-level growth trap, which has entrenched high levels of structural unemployment. Further, and as is the case with many middle-income economies, it has struggled with the domestic consequences emanating from a variety of exogenous economic shocks. Nowhere is this more apparent than in the case of contagion effects from the 2008 global crisis and trade-induced shocks – within a world economy that is increasingly defined by its interconnectedness. For South Africa, the real economic impact has been most powerfully felt in the labour market, with current and future employment threatened through these shocks. Thus, the combination of high levels of structural unemployment and the adverse labour market effects associated with exposure to global shocks has necessitated the design of appropriate and effective labour market responses.