, PLEASE USE THIS DOCUMENT AS A GUIDE ONLY
QUESTION 1
1.1 If employers substitute South African workers with migrant workers, what will happen to
the demand for South African labour? Illustrate your answer using a labour-demand curve.
If employers substitute South African workers with migrant workers, it signifies a shift in preference
away from the local labour force. This action directly reduces the number of South African workers
that employers are willing to hire at any given wage rate. The demand for South African labour
decreases, which is graphically represented as a leftward shift of the entire labour demand curve.
The demand for labour is a derived demand, meaning it is contingent on the demand for the goods
and services that labour produces (Barker, 2023, p. 95). When employers replace South African
workers with migrants, they are effectively reducing the demand for the services of the former group.
This shift is not a simple movement along the curve; rather, it is a structural change in the employer's
hiring preferences and is independent of the wage level.
At every possible wage rate, the number of South African workers demanded is now lower than it
was before the substitution occurred. This may be driven by factors such as a perception of lower
labour costs, a belief that migrant workers are more "flexible" as described by the textbook, or, as the
article suggests, an attempt by employers to take advantage of a climate that makes it easier to target
migrant workers for dismissal (Lilita Gcwabe, 2026). Consequently, the labour demand curve for
South African workers, denoted as D, shifts to the left to D′ . This leftward shift illustrates a decrease
in demand for South African labour, which, if the supply of South African workers remains constant,
will put downward pressure on their equilibrium wages and lead to a decrease in their overall
employment levels.
QUESTION 1
1.1 If employers substitute South African workers with migrant workers, what will happen to
the demand for South African labour? Illustrate your answer using a labour-demand curve.
If employers substitute South African workers with migrant workers, it signifies a shift in preference
away from the local labour force. This action directly reduces the number of South African workers
that employers are willing to hire at any given wage rate. The demand for South African labour
decreases, which is graphically represented as a leftward shift of the entire labour demand curve.
The demand for labour is a derived demand, meaning it is contingent on the demand for the goods
and services that labour produces (Barker, 2023, p. 95). When employers replace South African
workers with migrants, they are effectively reducing the demand for the services of the former group.
This shift is not a simple movement along the curve; rather, it is a structural change in the employer's
hiring preferences and is independent of the wage level.
At every possible wage rate, the number of South African workers demanded is now lower than it
was before the substitution occurred. This may be driven by factors such as a perception of lower
labour costs, a belief that migrant workers are more "flexible" as described by the textbook, or, as the
article suggests, an attempt by employers to take advantage of a climate that makes it easier to target
migrant workers for dismissal (Lilita Gcwabe, 2026). Consequently, the labour demand curve for
South African workers, denoted as D, shifts to the left to D′ . This leftward shift illustrates a decrease
in demand for South African labour, which, if the supply of South African workers remains constant,
will put downward pressure on their equilibrium wages and lead to a decrease in their overall
employment levels.
