Newer and smaller firms tend to have productivity levels that cannot be easily accommodated in such sectoral agreements, resulting in less job creation than we would like to have. 7 This cost in jobs has been estimated at somewhere between 8 and 13 per cent of total employment, in large part because sectoral agreements hurt small, labour-intensive firms.
8 South Africa has surprisingly few of these firms, relative to its peers. This helps to explain our unusually high levels of unemployment.