Abstracts

49 allowing citizens to access and acquire skills that could be transferable between jobs. As indicated in Table 1, South Africa has a high concentration of job creation in levels 1 and 2 (the elementary and domestic worker groups). Approximately two of three jobs created between 2014 and 2016 in South Africa fall under this category, reflecting the low-skilled nature of the South African labor force. According to the International Labour Organization (2004), elementary jobs “consist of simple and routine tasks which mainly require the use of hand-held tools and often some physical effort.” Tasks performed by workers in this group include domestic help, goods delivery, etc. The simple, repetitive nature of these jobs poses a challenge for the South African labor force. Current technological development is characterized by AI, best utilized where there is repetitiveness in the job and where workers would not add more value to the process. Therefore, the simpler the task, the less data and time required for an algorithm to learn and the higher the risk of that task being displaced by a machine. According to a study by Accenture, “The more predictable and repetitive the activities that make up the task, the more likely it is to be replicated by machines…and automated” (Phillips et al., 2018, p. 8). Because the majority of recent job creation in South Africa lies in the elementary group, the country is at a high risk for job displacement. Medium-skills Shortages in a Rigid Labor Market South Africa is facing two related problems: filling the shortage of medium- skilled workers in the short term and preparing to upskill its labor force to even higher levels for the new industrial revolution in the long term. Medium-skilled workers are those under NQF occupational levels 3 to 5, mainly clerical support workers and service and sales workers as well as plant and machine operators. Compared to US and to Organisation for Economic Co-operation and Development (OECD) averages, South Africa has a unique distribution of the types of workers in high demand. More than 60% of shortages in employment are in medium-skill work. Figure 1 shows the average shortage of available labor in the OECD economies is skewed to the high-skilled level, indicating that demand for labor skills is shifting toward “more complex, non-routine tasks as a result of digitalization” (Manca et al., 2018). Despite the global transition, South Africa stays behind the trend as its skills shortages remain concentrated in the medium range. As discussed previously, technology during this new phase has the cognitive capability to adapt and take on jobs that previously were thought could be done only by humans. For example, NQF level 5, the highest level in the medium-skill category, comprises mainly customer service clerks (tellers, receptionists, etc.). As an illustration of employment categories at risk in South Africa, several financial institutions, for instance Rand Merchant Bank and Nedbank, already are replacing thousands of hours of human labor by service clerks with robotic process automation. Instead of bank tellers, Nedbank is rolling out a robot—Pepper—that can chat with customers and answer questions. This innovative idea faced considerable pushback among unions because the bank planned to cut 3000 jobs. Specifically, leaders of SASBO—a finance union that comprises 70,000 workers— threatened “serious action plans” against the bank but at the same time conceded in court that “job losses will be inevitable due to advances in AI based technology” (Haffajee, 2018). This example reflects the rigidity of the South African labor market and the influence of the labor unions. The trade unions represent a strong force in the economy as their members account for 17.6% of the workforce (Department of Statistics South Africa [DSSA], 2020). These unions played an important role during apartheid, demanding equality and assuring proper treatment for workers. After 1994, the unions remained a strong force, having a profound impact on South African politics, creating rigidity within the labor market and stifling innovation. Hlatshwayo (2017) points out that workers are heavily influenced by their union’s philosophical leaning, which in South Africa focuses on labor law, wage negotiations, and HIV and AIDS. Currently, the unions pay no