It’s a lack of growth that’s our problem
Last week, the government, civil society, labour and business sat for two days in Joburg trying to find ways to save and create jobs in a country marred by slow economic growth and the highest inequality known to man.
My reading of the framework agreement entered into by the “social partners” afterwards leads me to believe that parts of the summit were tantamount to “doing the garden while the kitchen is on fire”. Nowhere in the entire agreement is there any acknowledgement that the single most important deliverable to curb the unemployment challenge is economic growth.
“Since 2014, economic growth in SA has slowed down and become more volatile. At the same time, we have not qualitatively reduced the joblessness and inequality that emerged before democracy. These twin burdens are the main blockage to sustained economic progress.”
This preamble is the only perspective offered by the summit on the importance of economic growth. Clearly, we have become experts at stating the problem, even repeating it a few times over, in the hope that the solution will somehow find us.
We know that economic growth is the problem. We know that, when coupled with a high rate of inequality, especially manifested on racial lines, stagnant growth is the active ingredient in an explosive socioeconomic cocktail.
The jobs summit framework goes into a lot of detail on various initiatives, which on their own are good at addressing sectoral challenges. The agreement touches on every key sector of the economy, from agriculture to manufacturing, mining, automotive and infrastructure. That is OK, but we are missing a key ingredient: strategy.
I am yet to understand what our strategy is to achieve economic growth as a country.
And no, the National Development Plan (NDP) is not a strategy. It is an excellent analysis of our challenges and opportunities, and tells us what targets we need to hit in order to have the SA we want. It doesn’t tell us how we will actually hit these targets and, perhaps more important, what do we do when things don’t go according to plan.
In any case, a strategy needs tweaking when the control environment changes. For instance, when the NDP was crafted, nobody could’ve foretold a world dominated by a selfish “me first” nationalist ideology, as championed by US President Donald Trump.
Instead of trying to co-ordinate a laundry list of various initiatives aimed at curbing unemployment, perhaps the jobs summit should’ve taken the time to have a strategic conversation about what we need to start doing, and stop doing, to stimulate the business confidence that would support economic growth.
The government needs to stop introducing uncertainty at policy level. Things must be clear and consistent. What investors perceive as bad policy is often not about the policy choice itself being antiinvestment, but that the policies are difficult to understand and predict well enough to factor into an investment case.
Thanks to the likes of Steinhoff, KPMG and the state capture revelations, SA Inc is not shining with glory nowadays. Business needs to work on its trust deficit with society and the world at large.
As for labour, it is high time there was due consideration of labourlaw relaxation for SMMEs. There are a number of labour regulations that, though crafted with the best intentions, simply make it too difficult for small businesses to employ people when they need to. The law is written on the assumption that every employer is a big company that is able to fulfil all the requirements demanded by our legislation. In truth, most employers in an economy like ours should be small businesses. It follows that legislation must make it easier — not more difficult — for such businesses to employ people.
However, when all is said and done, a strategy that ignores the digital age we live in is not worth the paper it is written on — especially if that strategy is seeking to make more people more employable.
It is common cause that technological innovation and computing power will continue to obliterate unskilled labour. Yet the “Education and Skills Intervention” section of the framework agreement makes no reference to the urgency of increasing digital skills to ensure our labour force is employable in the decades to follow.
So was the jobs summit just another talk shop? Well, the government committed to no further retrenchments, and the private sector said it would do its best to follow suit. That’s a start, I guess.
But as they say in business, “you cannot shrink yourself to growth”. No amount of trying to save current jobs is going to help create new ones. There is no way to do this, other than growing the economy and finding ways to remain competitive.
Legislation must make it easier — not more difficult — for SMMEs to employ people