Jobs crisis finally gets attention it deserves
New leadership ready to tackle unemployment and create the conditions for growth and investment
Galvanising business, labour and government into taking action against the country’s unemployment crisis has become a key task of all leaders when assuming office — and President Cyril Ramaphosa appears to be no different.
An epidemic of unemployment has engulfed SA for decades, worsening every year as prospects for growth and investment dissipate.
Former president Jacob Zuma promised in his maiden state of the nation address that his government would create half a million new jobs by the end of 2009.
Although the country had recently been hit by a recession and the global economy was still in crisis, the promise revived hope among the millions of South Africans who were struggling to get jobs and slipping deeper into poverty with each passing day.
The unemployment rate was 24.9% in the third quarter of 2009, shortly after Zuma delivered his address. When he was pushed out of office by the ANC last week, the most recent rate was 26.7% in the fourth quarter of 2017, with 5.9-million people unemployed and actively looking for jobs.
In the expanded definition of unemployment among those aged 15 to 64, Statistics SA recorded 9.2-million people.
“At the centre of our national agenda in 2018 is the creation of jobs, especially for the youth,” Ramaphosa told SA during his state of the nation address. He also announced 1-million internship opportunities for young people, which he said would go a long way in providing the experience employers often sought from new entrants in the labour market.
With 13 mentions in his speech, jobs were integral to most proposals and undertakings announced by the president. He mentioned unemployment four times and employment six times.
During his bid for the highest position in the ANC, Ramaphosa launched a “new deal” that would, among other initiatives, spur growth and place the creation of decent jobs at the centre of “every policy, programme and action”.
His Friday address echoed this vow. Ramaphosa garnered the support of labour federation Cosatu in his bid for the presidency, just as it had also championed Zuma’s rise ahead of the 2007 ANC conference.
Trade unions were adamant that it was time the jobs crisis was put in the spotlight, blaming the rift between labour, business and the government under the Zuma administration for the lack of action.
Ramaphosa cemented his popularity in the labour movement by backing the call for a jobs summit that would provide a platform for all stakeholders to engage and find the best possible solutions to boost job creation and protect existing jobs.
Organisations such as Productivity SA and the Department of Trade and Industry will no doubt have a major role to play in the creation of an environment that is supportive of small businesses, industry and investors, and other factors that influence job margins.
Cosatu parliamentary leader Matthew Parks says 100,000 jobs would have to be created each month if Ramaphosa is to realise the dream of many presidents before him and break the cycle of long unemployment.
By convening the longpromised presidential jobs summit, which could be held in May to create a pact based on clear plans, targets and timeframes, the country was embarking on the right course of action, he said.
“Education needs to be sorted out, improved, geared towards the economy and expanded. We don’t need unskilled matriculants but rather graduates and workers with needed skills.
“Mining needs a new
minister. The focus needs to be on beneficiation in mining to give it a new lease on life.
“Focus is needed on reskilling mine workers and not chucking them into unemployment,” Parks says.
In the five years preceding 2017, the mining industry lost 70,000 jobs as shafts were shut down and operations downsized amid unfavourable conditions locally and globally.
Labour expert Gilad Isaacs has argued that mining and manufacturing need diversification and that mineral value chains need to be leveraged to support upstream and downstream
industries. However, he says policy alignment across departments will be essential to achieve this outcome.
Unions have been enraged about the state of affairs in the labour market for over five years as relations with Zuma took a sour turn and deteriorated when workers called on him to step down.
Ramaphosa will need to restore these relations and also reach out to the South African Federation of Trade Unions, which has not enjoyed much interaction with the government since its recent formation as it is not a stakeholder at the National
Economic Development and Labour Council (Nedlac). He will also have to appeal to the National Union of Metalworkers of SA (Numsa), which has become a critic of state policies such as the national minimum wage and has said Ramaphosa’s presidency spells “doom for the working class”.
Despite its muddied history with Cosatu, which expelled it in 2014, the 350,000-member union is also a force to be reckoned with as it could cripple the metal, steel and engineering sectors with a single strike, which would have ripple effects on the rest of the economy.
Numsa’s antagonistic stance differs from those of other labour groups that have spoken of hope and assurance after the state of the nation address.
“Ramaphosa as president is not a victory for workers. We must expect a more diligent, effective and ruthless pursuit of neoliberal capitalist policies by the ANC government.
“Of course, the neoliberal materialist culture of grotesque inequalities, conspicuous consumption and corruption will continue. Only this time the disguises will be much more effective,” Numsa said.
The metals and engineering sector was hardest hit by job losses in the last decade. Small businesses that shut their doors at the onset of the global recession in 2008 have struggled to reopen as bosses blame cheap imports and high labour costs for their distress.
Steel and Engineering Industries Federation of SA CEO Kaizer Nyatsumba proposed a guideline of steps Ramaphosa should take to turn the distressed manufacturing industry around. The organisation said there was a theoretical possibility that the economy could create 100,000 jobs a month, as suggested by Cosatu.
“If this government understood its primary reason [for existing] is to protect South Africans and the business community as well as to create a climate that induces investment domestically and internationally so that those around the world looking for countries in which to invest see the political stability in SA, and certainty that they see the country as an investment destination, that would make it possible,” he said.
Meanwhile, Business Unity SA has commended the president’s commitment to working partnerships to achieve a common objective of sustainable and inclusive growth, employment and transformation.
As the government leader at Nedlac, Ramaphosa has heard enough cries from labour and business to know what to do and this was apparent in how he tackled the jobs issue in his state of the nation address.
He needs to stimulate the economy and ensure the environment becomes conducive to investment. Whether he achieves this by negotiating the implementation of import tariffs to aid distressed local industries or by getting labour to lower wage demands in exchange for more jobs, the president has a daunting task ahead, and having the support of labour and business will go a long way in achieving some gains.
Ramaphosa has made many promises to SA’s most desperate citizens and needs to act before the unemployed express their fury through disruptive public protests, as witnessed in other African countries.
Another challenge he will have, as explained by Isaacs, will be a fallout with labour if the rumours of an increase in valueadded tax (VAT) materialise.
“Increasing VAT, as rumoured may be proposed in the budget, would be negative, both economically and in terms of relations between the government and other social partners,” he said.
COSATU’S MATTHEW PARKS SAYS 100,000 JOBS WOULD HAVE TO BE CREATED EACH MONTH