The South African Chamber of Commerce and Industry (SACCI) is concerned over the 36.7% broad unemployment rate recorded for the first quarter of 2013. The number of unemployed persons and discouraged work seekers increased by 173 000 over the past quarter. This in itself serves as powerful warning that the current culture of knee-jerk industrial action and the increased rigidity of labour regulations stifles employment creation and in turn threatens the stability of the economy.

A second highly problematic trend is the increase in the size of the government labour force in relation to the rest of the economy. Government employment increased by 44 000 in the first quarter to 3 072 000 employees or 22.6% of total employed persons (see table below). The government has replaced the Trade sector, which contracted by 66 000 over the same period, as the single biggest employer in South Africa. This is clearly unsustainable as the public sector wage bill is ultimately paid for by the taxes generated by the private sector.

The high level of unemployment is not a statistical anomaly but a very real manifestation of the fallout from a rigid labour market and near-constant industrial action that cripples economic activity. There is an almost fatalistic recognition in the public debate that South Africa is once again approaching a "strike season". This is problematic because it assumes there is an inherently antagonistic relationship between workers and employers.

SACCI calls on labour unions to use restraint before starting industrial action. While the right of workers to organize is duly respected, it is similarly necessary that labour unions consider the impact of their actions on job creation and sustainable economic growth.

Statement issued by CEO of SACCI, Mr. Neren Rau, May 6 2013

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