Wages and productivity and labour's declining income share in post-apartheid South Africa

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Periodical article

Title:	Wages and productivity and labour's declining income share in post-apartheid South Africa
Author:	Burger, Philippe
Year:	2015
Periodical:	South African Journal of Economics (ISSN 0038-2280)
Volume:	83
Issue:	2
Pages:	159-173
Language:	English
Geographic term:	South Africa
Subjects:	wages productivity
External link:	https://doi.org/10.1111/saje.12092
Abstract:	The Marikana incident in 2012, as well as the protracted strikes by platinum miners, metal and postal workers in 2014 suggest that not all is well in the South African labour market. Even though those in employment are better off than the unemployed poor, macroeconomic data indicate that labour's share in gross value added has declined significantly during the first two decades following the first democratic election in 1994. A falling share of labour in income also means, by definition, that average labour productivity growth outstrips real wages growth. Data for South Africa suggest that productivity has indeed increased faster than wages in South Africa. This article argues that financialisation and more aggressive returns-oriented investment strategies applied by for instance large investment institutions translated into higher required rates of return on capital, which in turn caused an increased implementation of capital-augmenting labour-saving technology that reduces labour's share in income. Bibliogr., notes, ref., sum. [Journal abstract]