SAFTU dismayed by worsening unemployment
1 June 2021
In the past, we have highlighted the limitations of Statistics South Africa in relation to GDP and economic growth calculations and the methodologies they use to arrive at their conclusions. Part of StatsSA’s shortcomings come from patriarchal capitalism which undermined the work in what is called “social reproduction” done mostly by women, without pay, hence not valued by male economists who calculate GDP. Partly Stats SA gives misleading data about the economy because they consider minerals taken from the ground as purely income – forgetting that they should also subtract from our natural wealth since the minerals are non-renewable.
Stats SA is correct to blame cuts in funding from Treasury – where the agency is located, ironically – for making the agency far less reliable.Such cuts have affected them in narrowing their methods at times, mainly because they do not have funding to carry extensive surveys.
Notwithstanding the limitations of their methods, their latest quarterly labour force survey, however, provides a sober barometer of a worsening catastrophe: unemployment and poverty . One thing is consistent: for the fourth consecutive year, the survey continues to paint a grim picture for unemployment in this country.
The “official” unemployment increased by 0.1% to 32.6% in the first quarter of 2021, from 32.5% in the last quarter of 2020. The expanded unemployment rate, which includes those who have given up looking for jobs, increased by 0.6% from 42.6% in December 2020 to 43.2% in March 2021.
By industry, four major employers – construction, households (for domestic workers), manufacturing and trade – that contributed to job shedding quarter-on-quarter from December 2020 to March 2021. But even those industries that saw increases on quarter-to-quarter, were not able to replace the 1.4 million net jobs lost in 2020, or even those within their own sectors. For instance, mining shed about 41 000 in 2020, but was only able to regain 12 000 of those jobs in this quarter.
It is doom and gloom for the youth. StatsSA show that there are “about 10,2 million young people aged 15–24 years in quarter 1 of 2021, of which 32,4% were not in employment, education or training (NEET).” Further, it shows that “the NEET rate for females is higher than that of their male counterparts in both years.”
This spells doom for the future of young people in this country, and thus it comes as no surprise that levels of crime and violence are increasing.
Our young people who are neither in any form of education and training, nor in any form of employment, look for other ways to make end meets through crime. The failure to improve public education – from about half our children are pushed out or drop out before matric, is a profound reflection of state failure, Moreover, the state’s failure to accommodate all matriculants in colleges and universities is worsening, thanks to Treasury’s university budget cuts in February 2021, partially reversed only through intense student protests in March. A nd for other youth, rising unemployment reflects the wasting away of a valuable human resource and puts the future of this country at risk. If gainful employment is not available, then criminal gangs can better recruit our children.
Labour laws amendments and unemployment
In the past, the Labour Relations Act and related statutes and regulations to protect workers were blamed for lack of job creation. Neoclassical economists and liberal analysts said that trade unions had disproportionate powers which curtailed the ability of business to grow and create jobs. The amendments to labour bills of 2017, which were passed in 2019, were introduced as measures to minimise the “disproportionate” powers of the trade unions in favour of economic enterprises.
Considering such amendments came into effect two years ago, one would have expected that business would create jobs. But even before Covid-19 this did not happen. And over the past year, unemployment skyrocketed and has reached unprecedented high.
This does not surprise SAFTU. The arguments made by neoliberal analysts that curtailing rights of organised labour correlates with job creation was just a myth. Their interest was merely to maximise exploitation. It had nothing to do with job creation. This is because central logic of capitalism is to maximise profit by cutting input costs through appropriating ever more surplus value from labour. Yet as a
central contradiction in the system of capitalism, the most disposable input is labour, hence machines replace labour, which undermines the source of profits – as well as impoverishing local consumers of locally-produced goods.
So the labour amendments – especially inhibiting our ability to strike against workplace injustices – were introduced not because limiting the disproportionate powers of labour would lead to job creation. They were introduced for the purpose of ensuring exploitation can take place more easily, with less regulation and weaker trade unions.
Capitalism incapable of solving the crisis of its own creation
South African capitalism has been incapable of addressing the multiple crises of public health, environmental crisis and economic stagnation with creativity, and now does not meet even the most basic needs of the majority, what with well over two thirds of the society below a R50/day upper-bound poverty line. A visit to any township, or informal settlement will provide the harsh evidence of what the majority of our people experience on a day-to-day basis.
The dominant neo-liberal approach to the economy entrenches rather than softens the exploitative practices. After all, the particular form in which capitalism developed in South Africa – with migrant workers and Bantustans generating a “cheap labour system” – has left an ongoing legacy of chronic inequality, unemployment and poverty.
The success of capitalism in South Africa, and other countries in the Global South, has depended on much more intesnse uneven development than in the Global North. This benefited corporations of the imperialist powers, at the expense of the neocolonies. Transnational corporations, largely based in imperialist countries, used the neocolonies like South Africa as havens for cheap labour and as reserves of natural resources. To exploit both, not only was colonialism and neocolonialism imposed, but since the 1970s, enslaving foreign loans were provided to dictators who in turn could raise their military and policie budgets, and intensify their own attacks on workers. That tradition seems to be returning, what with the credit rating agencies egging on the South African government to impose labour amendments, in turn, to enable such exploitation to take place unabated.
Capitalism has never worked for the mass of the people but has unwaveringly maintained the wealth and privilege of an elite. This is the reason why mining companies have declared huge profits and dividends to shareholders for the year 2020, yet could not recreate all the jobs they had lost in 2020. This is the reason the Johannesburg stock market and other financial casinos are booming while the real economies of the world have shrunk.
Covid-19 has created a convenient opportunity for many companies to retrench workers. They use it as a scapegoat, as if retrenchments were not carried out before to put labour on the back foot. The economic system that operates on the basis of commodity exchange and maximisation of profit always has unemployment as a permanent feature.
Sometimes the problem of unemployment is explained by the myth that “job seekers cannot find their prospective employers” due to an information barrier. In reality, the real explanation for unemployment is structural. That is, for as long as capitalism exists, unemployment will always exist. Hence countries which are not pursuing neoliberal policies often introduce unemployment insurance and even basic income grants, because they understand that this unemployment is a permanent feature of capitalism.
This is why SAFTU demands that the South African economy be overhauled to rid all the vestiges of racism and colonialism that continue to shape the economy. The economy must be organised under the democratic control of workers and communities, in order to ensure that work is shared amongst all working-aged groups who are not in any form of education and training.
The ultimate answer to this crisis, is the socialist transformation of society in which production will be for need and not for profit. Through that, we can guarantee all the pauperised masses a genuine chance to achieve their potential.
Issued by SAFTU, 1 June 2021
