Seasonal jump in job numbers can’t disguise crisis
THE increase in formal employment during the final quarter of last year was mainly seasonal, reflecting gains in the retail trade and hotel industries which will be reversed as consumer demand wanes in response to rising interest rates, labour experts warn.
Jobs in the formal sector of the economy — which accounts for about 60% of overall employment — increased by a net 43 000 in the fourth quarter, a 0.5% increase on the previous quarter and a 0.1% rise over the course of the year, figures from Stats SA showed on Wednesday.
Trade drove the modest improvement, accounting for 42 000 new jobs, followed by community and social services with 13 000 and financial services with 16 000. But employment in the mining, construction, manufacturing and transport sectors fell, with mining losing 14 000 jobs.
“Overall, the formal sector . . . is still under strain and we will see the firstquarter figures come down quite dramatically,” said Mike Schussler, chief Firefighters standing on a crane throw flower petals on an effigy of Christ during the San Bernardo brotherhood Easter procession in Sevilla, Spain, this week. Christians around the world mark the holy week of Easter in celebration of the crucifixion and resurrection of Jesus Christ economist at Economists.co.za. “We are in danger of slipping into the same situation we were during the recession in 2009 when one in 12 jobs were lost.”
The Quarterly Employment Survey reflects the payrolls of 20 000 VATregistered business and excludes jobs in agriculture and households as well as self-employed people. It is seen as a more accurate reflection of trends in job creation than the Quarterly Labour Force Survey, which covers responses from 30 000 households and only records people who have looked for jobs as unemployed.
During the final quarter of last year, the labour force survey indicated that the official jobless rate was 24.5%.
Labour consultant Tony Healy said: “The country objectively has an unemployment crisis which has persisted for many years. The statistics do not show significant movement in any direction over time.”
Fundamental structural labour laws were “inhibiting the potential” for job growth, and the regulatory environment made the cost of compliance high and served as a “disincentive” for employers to employ, said Healy.
Dismissal laws were complicated, particularly for small and mediumsized enterprises.
The Commission for Conciliation, Mediation and Arbitration handles about 600 unfair dismissal claims dai- ly, reflecting the difficulty businesses have in firing employees who are not performing.
The World Economic Forum’s Global Competitiveness Index puts South Africa last in a survey of 140 countries for labour-employer relations, a result the Black Business Council has described as a “complete disaster”. Cosatu disagrees with complaints by business that labour regulations are too rigid.
Healy said plans to introduce a national minimum wage would also prove to be a constraint on job creation in the formal sector.
The Quarterly Employment Survey showed that gross earnings rose 6.3% in the fourth quarter of last year compared with the previous quarter, and climbed 5.9% compared to the same quarter in 2014 — both well above inflation at that time.
News that inflation rose 7% in February — to its highest level in nearly seven years — indicates that the Reserve Bank will have to raise interest rates higher and faster than anticipated this year.