Jobs won’t soar till the economy does

Digitisation has led to a wave of job cuts, but the real problem remains a lack of meaningful growth

The economy is moribund yet still managed to create a net 22 000 jobs in the first quarter, bringing the total number of employed people to 10.1-million, according to Statistics South Africa’s quarterly employment survey (QES). This is a 0.8% growth from the first quarter of 2018.

The QES estimates the quarterly change in employment by major industries and is one of two job market surveys carried out by Stats SA. The labour force survey (LFS) measures total unemployment, also on a quarterly basis. The latest LFS, released in May, puts unemployment at 27.6%.

Although the country is able to add work, the unemployment rate remains high because new jobseekers in the market exceed the number of positions created.

Meanwhile, major corporates that have announced jobs cuts include sugar producer Tongaat-hulett (5 000), miner Sibanye-stillwater (3450), pay-tv provider Multichoice (2194), miner Impala Platinum (1 500), bankers Standard Bank (1 200) and Absa (827), diamond miner Alexkor (238) and construction com

pany Group Five (not yet disclosed).

The companies have given a mixed bag of reasons for the job cuts, with some blaming the economy and others the move to digitisation.

Multichoice said that it will cut more than 2000 jobs in its call centres and walk-in services. The pay-tv service said the reason is the changing behaviour of its customers, who have increasingly moved away from traditional voice calls and visits to walk-in centres, preferring self-service and digital technologies.

Tongaat-hulett said it is retrenching because of lower sugar prices and the sugar tax; Impala Platinum and Sibanye-stillwater will cut 5000 jobs between them, the latter citing the restructuring of its South African gold-mining operations after experiencing losses during strikes at two of its mines. State-owned diamond miner Alexkor said its job cuts were because it is struggling financially. Standard Bank has said that it will close 91 branches to focus on digital banking; Absa said it is restructuring its retail banking unit; and Group Five, which is in business rescue, said it is cutting jobs to stay afloat.

Professor Hardus van Zyl director of the school of economics at the University of Johannesburg, says that digital technology is the least of South Africa’s problems in terms of jobs.

“We have two problems simultaneously in the job market,” he says. There is a structural problem of unemployment where “we have a huge skills gap, underpinned by, on average, low productivity, which makes the country vulnerable to high unemployment”.

A second problem is cyclical unemployment which, Van Zyl says, is caused by an “economy that is not growing”.

“The country’s job market is horrible. I am concerned about youth employment; that, for me is really going to nail us,” Van Zyl says.

South Africa’s youth account for almost two-thirds of the total number of unemployed.

Ben Scully, senior lecturer in sociology at the University of the Witwatersrand, cautions using technology as a reason for job losses.

“Obviously, there is a lot of talk of automation and computers and robots replacing jobs, but I am a little sceptical of using this argument because it’s a popular sort of idea that a company can use as an explanation when business might not be doing well because of the economy,” he says.

Jobs that are less likely to be automated are highly skilled jobs such as those in information technology as well as lower-skilled jobs, Scully says. “For example, with cleaners, a lowskill job, you cannot automate it. If someone spills a drink on the floor, you cannot predict it.”

Van Zyl says government is “bloated” and cannot create jobs. “We need to speak to the private sector and ask them what we need for them to invest in jobs. Companies have billions of rands of cash which they are not utilising at all and it’s simply floating on the JSE.”

He says government can remove red tape for private businesses and small businesses to help create employment.

“The time to talk is over. If we do not start reacting now, we are going to have a crisis of incredible proportions in the next two to three years — we are going to see socioeconomic chaos,” he warns.

Van Zyl says the government needs to skill and upskill jobseekers, especially the youth.

Tshegofatso Mathe is an Adamela Trust business reporter at the Mail & Guardian