Prominent economist Thabo Mkhwanazi has stated that the influence of trade unions is contributing to South Africa’s high unemployment rate. Speaking at a business forum, he argued that union demands for high wages and rigid working conditions are deterring investment and making it difficult to create new jobs.
Mkhwanazi explained that while unions have been important for protecting workers, their current stance is “pricing low-skilled workers out of the job market.” He believes inflexible labour regulations and the high cost of hiring are preventing businesses from expanding and employing more people.
South Africa’s unemployment rate is currently 32.4%, with youth unemployment near 59%. Mkhwanazi called for structural reforms to the labour market to encourage more adaptable employment contracts.
The Congress of South African Trade Unions (COSATU) strongly rejected this argument. A spokesperson stated that unemployment is caused by issues like load-shedding, crumbling infrastructure, and government incompetence—not by fair wages or worker protections.
Mkhwanazi clarified that he is not against unions but urged them to adapt to economic realities to help absorb millions of unemployed South Africans. The debate highlights the ongoing tension between protecting workers’ rights and creating jobs in a struggling economy.