15 Apr 2020
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What impact will Covid-19 have on the already fragile relationship between business and labour? In this podcast, Tim Spira talks to Andrew Levy about what the world of work will look like post crisis.
The thing which will resolve all our problems is economic growth between 5 and 8% for a decade or a decade and a half. That will do it.
Key comments from Andrew Levy
On a post-Covid world
"One thing is clear to me and that is that the world will not be the same after this. But in the longer term, I have very little doubt that the economy will prevail, that the inventive spirit of the entrepreneur will prevail, and that we will go on, albeit in a world that is slightly different to this one."
"The world will not be the same after this. It will be much more inward looking; it will be much more introspective. The whole area of international trade will suffer, and one of the things that will emerge is that they will be looking more and more to their own manufacturing capabilities in order to be less dependent on importing supplies."
"The State President switched off the economy with a flick of a switch. But it can’t start again the same way. It’s going to be a long, slow, staggered process."
On the response of the unions
"With regard to the question of unions seeing the writing on the wall, the answer is no, even though their backs are to it. And this is because we are still plagued by this huge ideological divide."
"The acid test is going to be the public sector wage bill, and of course the well-known fact that Eskom is severely over-manned. And that very much is going to be the issue on which we stand or fall."
"One also needs to dispel the myth which is perpetuated by public sector workers that they are the poorest of the poor and they are very badly paid. That is not true at all. In fact they are not only the best paid, but their employment is the most secure. They hardly ever get dismissed and their benefits, by way of leave, additional leave, etc. etc. far outweigh those in the private sector."
On how to avoid an economic meltdown
"The thing which will resolve all our problems is economic growth between 5 and 8% for a decade or a decade and a half. That will do it. We are looking at a simple old-fashioned Keynesian demand deficiency unemployment: there are far more labour jobs supplied than there is demand for."
"How do we rectify that? Well, we do it by economic growth. So that’s the answer in theory. But in point of fact delivering that growth is going to be the political challenge as well as the economic challenge. And there we are sadly starting from a long way behind."
"Everything is there which will enable us to begin a growth path. What we need is the political will and the political and national unity in order to do that. It has been done before if one looks at the way certain countries recovered after World War II."
On the future of work
"Employers will learn that they can run their businesses on a much leaner labour force; and employers are notoriously loathe to re-hire if they can avoid it. And because they are running in some cases on greatly reduced numbers of people and getting by, it’s going to dampen down demand for labour."
"Covid, more than anything else, is going to fuel or accelerate the rate of outsourcing of working from home; of getting labour inputs from anywhere around the globe. And the old model of the worker who comes to work from 9-5 and sits at this desk and does whatever he does is also going to disappear."
"We are going to have to rethink on an evolutionary basis the way in which we not only assess performance but the way in which we reward performance. So, I think we are probably going to become far more output-based in terms of determining wages."
"The future world of work means fewer people employed but earning higher wages and of course if you put this into the South African context, this is antithetical completely to what we need. We need people with picks and shovels, we need labour-intensive jobs. But no business can afford to make the decision that that’s the route we are going to go and remain competitive, particularly in a world market."