The Congress of South African Trade Unions is seriously concerned at the sharp rise in unemployment shown in the figures for the first quarter of 2009 released on 5 May (see here).
A total of 208,000 jobs were lost, almost two thirds (143 000) of them in retail, just under a third (62,000) in manufacturing and the rest (53,000) in agriculture, transport and the public service. This has increased the number of officially unemployed people in the country from 3, 9 million to just under 4, 2 million.
The current figures are a complete reversal of the figures in the labour market indicators for the fourth quarter of 2008 which showed that the economy had created 189,000 new jobs. COSATU contested these figures at the time, because we were already hearing of major job losses in almost all sectors of the economy, in the wake of the world economic crisis.
The latest data have confirmed what we suspected then - that our economy has been shedding jobs at a rapid pace. But the latest stats are still not without more controversial surprises. Firstly, they indicate that 12,000 jobs were created in the mining sector since January. Yet mining has experienced declining growth, retrenchments have been reported and a number of companies have already shut down.
Secondly, the data suggest that outside of agriculture, most job losses have occurred in the informal sector, where some 96,000 jobs were lost compared to 88,000 in the formal sector.
One of the biggest hurdles facing Stats SA is to define clearly what constitutes the informal sector. It is generally taken to be that part of our economy that is unregulated, usually small businesses run from homes, street pavements or taxi ranks. Often those who lose jobs in the mines, factories and supermarkets end up in the informal sector where they set up small survivalist enterprises. It is alarming that even this sector, which has traditionally offered a minimal degree of livelihood for retrenched workers and those who cannot find employment in the formal sector, is now said to be shedding jobs as well.
For workers, the future looks grim. There are predictions that this year alone, almost a million workers will lose their jobs, which means that the number of unemployed will rise drastically, far more that earlier predictions that job losses for this year would peak at 250 000.
And the official figure of 4, 2 million unemployed people does not include the 1, 2 million others who are deemed to be too discouraged to look for employment because there are either no jobs available in their area, or there is no work requiring their skills. The majority of discouraged work seekers are young people who have lost all hope of ever finding a job. Around 3, 2 million or 75% of all unemployed people in South Africa are between the age of 15 and 34 years.
Growing unemployment poses major social and economic problems not just for workers and their families, but also for the incoming ANC government.
Firstly, government will struggle to meet its target of halving unemployment and poverty within the first two decades of freedom. Under the 2005 Accelerated and Shared Growth Initiative for South Africa, government suggested that if economic growth rose to 6% by 2009, it would be possible to cut down unemployment to around two million or 14% of the labour force by 2014. At its apex of job creation between 2004 and 2006, the economy was only able to generate half a million jobs a year, yet if the current survey is anything to go by, the economy is shedding at least half of that number every three months.
Secondly, the country's social safety net will experience tremendous pressure as those who lose jobs are forced to rely on family members receiving state social grants, which support not just the individual recipient but the whole family too. Able-bodied people between 18 and 60 years with no job get no income support from the state. As more people are thrown out of work they will have to rely on their limited unemployment insurance benefits, and once these are exhausted, on those family members already on the state's grant system.
Thirdly, we are likely to witness greater conflict in the labour market as employees demand higher wages to counteract the high cost of living, while employers point to the worsening economic situation as an excuse curb wage increases. Dispute resolution bodies like the Commission for Conciliation, Mediation and Arbitration for will come under increasing pressure.
Finally, the incoming ANC government has the daunting task of realising its election promise of creating decent work for all in a climate where the economy is shedding employment at a frightening pace. Much reliance has been placed on the Expanded Public Works Programme which created almost a million jobs in the three year period between 2004 and 2007. But important as these jobs have been, most of them were short term and have not helped facilitate employment into the formal economy.
Government's massive investment in infrastructure development partially in response to the 2010 Soccer World Cup has had a net positive impact on economic growth and employment creation. This however has not shielded sectors like construction which for the first time since 2002 has lost a massive 65,000 jobs.
It has become more urgent than ever for the new government to kick-start the implementation of the excellent and very necessary measures contained in the Framework Agreement drawn up by government, business, labour and community as South Africa's response to the world economic crisis. Its top priority was how to minimise jobs losses and pave the way for future job growth. The Stats SA figure show that we are falling dangerously behind in the task of implementing this crucial set of programmes to save and create jobs and restructure our
economy.
The joint task teams set up in Nedlac to implement the agreement must be revitalised and start delivering immediately.
Statement issued by COSATU national spokesperson, Patrick Craven, May 6 2009
Click here to sign up to receive our free daily headline email newsletter
