Labour pains attend economy’s rebirth

WHO did Margaret Thatcher leave behind? It’s a question we must ask given our unrelenting march away from the pick and shovel and towards a more modernised economy led by its services sector, the new jewels in the crown being our financial services and retail sectors.

The shift has been evident since the last global recession, which pricked the resources bubble. China sustained demand a bit longer, but let us accept that the world’s number-two economy has something else to focus on right now. And perhaps building another bridge or even another city isn’t top of mind.

All this talk of the creation of our very own Silicon Valley of ideas nestled in the mountains of the Western Cape somewhere is rather exciting. In Pretoria, there is land long demarcated as an Innovation Hub by the government for technology companies to find a base to prepare for the new economy. The plans were put in place long ago, spurred by the realisation that an economy reliant on its commodity strength was too susceptible to market sentiment.

We are now at the raw end of that change and it is quite discomforting. And that’s because we don’t really know what to do with the men and women who will be left behind.

How do they come along for the ride, when the country’s past has left the vast majority nowhere near the bus stop?

Labour on our mines in the north of the country has been sourced from far-off places such as KwaZulu-Natal, Eastern Cape, Mozambique and Lesotho.

Their earnings, though small, have fed into the economies of our secondary cities and their hinterland homes, when it eventually does reach there.

As the job losses stock up in the mining sector, towns around mines, such as Welkom, as well as rural parts of our country, get poorer. That’s not to say they were very well resourced in the first place. I guess this was inevitable. Without strong commodity markets to support attempts to raise worker wages and now save jobs, the once powerful National Union of Mineworkers has lost all its prominence.

Although the Association of Mineworkers and Construction Union may be dancing on its grave, it too faces a rather desperate future.

The National Union of Metalworkers of SA faces the same prospect.

As much as China has changed its focus to developing a consumption-led economy, we need to turn our attention to finding long-term solutions to realign our own economy.

In the short term, a focus on infrastructure should provide employment opportunities to take up some slack caused by the jobs bloodbath in the industrial base.

It was interesting to hear Finance Minister Nhlanhla Nene say our debt to gross domestic product level allowed us space to borrow.

We need to turn our attention to finding solutions to realign our own economy

But, over the long term, we need a clear focus on improving education. The growth of private sector schooling is evidence of the need for better skills to compete in the local economy and on the global stage.

I’d prefer the public sector playing a leading role and not just the Curros and Advtechs of this world. They have their place, but better on the margins.

A healthy nation is one that educates its people. The rapid growth of private schooling cannot be good for our longterm competitiveness.

Thatcher left some of her people behind in places such as Newcastle when she broke the back of unions in the 1980s.

She gave up a lot of Britain’s industrial strength to Germany, in exchange for a services bent to the UK economy.

What will South Africa give up in our leap?