Why SA jobs are being destroyed The sixth edition
The job outlook in our country is a worrisome one. One in four South Africans is unemployed – although it is estimated that the figure may be as high as one in three as the number of discouraged jobseekers in South Africa has increased by 1.1m since 2009. Discouraged jobseekers are people who have given up hope of finding a job. Today, around 68% of these people in SA are under the age of 35. Many of them have come from a basic school education system that has left them with rudimentary skills and without the means of gaining access to further education. It has also meant a growing reliance on social welfare; currently four out of 10 South African households are dependent on welfare payouts. The growing sense of unease and hopelessness has already contributed to several violent protest actions across the country, and questions have to be asked about what the Government is doing to address this issue, aside from action already being taken in the education space.
of the Development Indicators Report (DIR), which covers the year 2012, was released by Minister in the Presidency Collins Chabane on 20 August. The report tracks the progress in imple- menting Government’s policies and programmes. It shows that while SA is in a better space in many areas than 20 years ago, some issues of concern jump out, mainly relating to high levels of unemployment and the increasing levels of household debt.
Harold Maloka, spokesperson for the presidency, says that the high level of unemployment is a major concern for Government, along with poverty and inequality. “Reducing unemployment is a main focus area of the National Development Plan (NDP), and various initiatives are being implemented to reduce unemployment, including the infrastructure pro-
gramme, the New Growth Path sector development initiatives, and a variety of industrial development programs under the Industrial Policy Action Plan (IPAP).”
Government is using its State-owned entities, like Transnet and Eskom, to employ thousands of people, and while these programmes are commendable, they do, however, also increase the public-sector wage bill, which is already sitting at almost 40% of national GDP or around R400bn per year. The long-term affordability of this plan therefore, has to be a concern, and employment by the private sector should rather be encouraged. However, this has been disastrous of late.
Mining and agriculture remain two key sectors of the South African economy, with the potential to employ a substantial number of people, mostly unskilled. Yet in recent years, employment numbers in both sectors have plummeted disastrously.
Due to the fact that the the size of the mining industry shrank by 1% per annum between 2001 and 2008, it now employs some 300 000 fewer people than it did in 1994. A great deal of labour unrest, including the tragedy at Lonmin’s Marikana mine in August 2012, as well as continuing uncertainty over key Government policies, has led to unparalleled levels of unease in the sector. This in turn leads to a lack of investment and growing job insecurity.
According to the DIR report, jobs in agriculture fell from 1.1m in 2002 to levels of 660 000 just 10 years later. The number of workers in this sector has effectively halved. To a large extent, this can be blamed on growing input costs and Government legislation.
Theo de Jager, deputy president of AgriSA, says that one piece of Government legislation that is hugely prohibitive for job creation in farming has been the extended security of tenure act.
“It’s a criminal offence to have workers removed from your farm, and today it can only be done with a court order and those cost around R16 000 per case. If they’re here, they’re here, even if they are not contributing. Unfortunately, bad apples often lead to good workers leaving your employ.”
De Jager says that this issue has in many instances led to farmers not employing new workers and downsizing the existing num- ber of workers.
“Another huge issue is input costs. Electricity and water costs as well as increase in wages have had a massive impact. We’ve lost entire industries in SA including the tea (excluding rooibos) industry. In 2006, we had big tea plantations going on here in the Tzaneen area that employed 12 500 people. SA has since lost the industry to countries like Tanzania and Malawi.”
What’s worse is that the jobs bleed in this sector is sure to increase as a recent revision of the basic minimum farm wage by the Department of Labour has seen basic wages being increased from R69/day to R105/day.
“This may mean that even more farms start to grow produce that requires less labour, to curtail the cost increases. Smaller farming operations may also struggle to make ends meet,” De Jager says, adding that the combination of new legislation and high input costs has led to farmers moving away from labour-intensive farming. “It’s not easy to create jobs on farms and it’s getting increasingly more difficult to maintain the jobs that exist.”
He claims the agricultural industry can create 1m jobs in one year under the right conditions.
“Basically, all we’ll need is the permission to fire workers that are not delivering. If farmers abuse that allowance, there are processes in the law that Government can use to address those instances, but the way we’re going, we’ll struggle to see mass employment.”
Instead of making it easier to employ people, Government seems intent on adding to the uncertainty in the labour market with new proposed legislation. At least three new parliamentary bills currently in the system may have huge negative implications for unemployment.
One of these is the Labour Relations Amendment Bill (LRA). The bill – of which a final draft has just been endorsed by parliament – addresses labour brokering issues by limiting the period for which workers can be employed to three months. It also addresses organisational rights for unions that do not enjoy majoritarian status at a workplace, and looks at an extension of the period for consultation over proposed retrenchments and the removal of the requirement for a strike ballot to take place prior to industrial action.
The opposition DA says that this bill is solely meant to pander to the needs of the ANC’s fellow tripartite member Cosatu. Cosatu has of late struggled to be the majority union in some sectors of the economy like the platinum industry, where the Association of Mineworkers and Construction Union (AMCU) has taken top spot after the Marikana affair. This bill may address this issue in a manner of speaking, giving more rights to Cosatu aff iliates like Num that are no longer majority unions. Cosatu has also been vehemently opposed to labour brokering in SA and would be in favour of the proposed changes.
The South African Chamber of Commerce and Industry (SACCI) says that the proposals in the bill pertaining to the restriction on labour brokering “will definitely result in job losses”.
Peggy Drodskie, COO of the SACCI, comments: “Many jobs are of a temporary nature, such as when there is seasonal demand for increased staff or [when the positions] are project related. Many projects last for more than three months, and the restriction on the employment of temporary staff for a period not exceeding that time is unrealistic. Some operations are seasonal, and it is impractical to expect an employer to keep staff on the payroll if their services are required on a seasonal basis. Some industries have uncertain staff requirements. As an example, the fishing