| Summary: | The ability of the South African economy to absorb labour has been declining since the
1960's, with the manufacturing sector employment declining since 1990. The decline in
manufacturing jobs flies in the face of increased output of the sector. This trend is
attributed to the application of technology and sophisticated equipments in the
manufacturing process leading to a loss of jobs, particularly for unskilled labour.
Unemployment in South Africa has become one of the biggest challenges facing the
present government. The government in its bid to overcome this major problem is doing
everything to get to the crust of the matter, including information on major causes of
unemployment in the country. Reduction of unemployment is hugely regarded as a
prerequisite for poverty alleviation, a policy that is very close to the heart of the present
government. For this singular reason, information on major causes of unemployment in
South Africa is becoming increasingly important to policy makers.
The objective of this study is to compare the effect of labour and capital on the revenue
of the beverage industry in South Africa from 1985 to 2005 using translog production
function. The study showed that new technology, due to spending on new capital did not
play a significant role in achieving an increase in revenue in the beverage sector. The
increase in revenue was rather attributed to an increase in spending on labour. Increasing
expenditure on labour by 1% raised revenue by 0, 62% while 1% change in capital
expenditure increased revenue by 0,43%. This, in some ways, indicates that the beverage
sector of the South African economy is labour-intensive. One could therefore conclude
that the beverage industry relies more on labour and does not contribute significantly to
unemployment in South Africa. === Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2008.
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