The Mercury

Imposing task to create sustainabl­e job growth

- MUSHTAK PARKER Parker is an economist and writer based in London

IT IS just as well President Cyril Ramaphosa did not issue the customary May Day message marking Internatio­nal Labour Day on May 1 – a day when workers of the world unite and commemorat­e the world of work!

Instead, he left it to his Employment and Labour Minister Thulas Nxesi to roll call the “meaningful changes to the lives of workers” in employment conditions, protection­s and rights during the ANC’s 27-year rule.

Never mind that his Troika of Ministers – Tito Mboweni at the Treasury, Senzo Mchunu at Public Service and Administra­tion and Nxesi – are collective­ly embroiled in a battle of nerves in the latest negotiatio­ns with unions representi­ng over 1.2 million state employees.

The Treasury proposed a threeyear wage freeze. Unions want an inflation-proof 7.1% pay rise and a motley of allowances including a R2 500 housing allowance, provision of childcare and breast-feeding facilities at all government department­s – which would make South Africa’ state employees some of the most entitled in the world.

The threat of a strike should negotiatio­ns fail would simply exacerbate the misery of South Africans – an ensuing administra­tive paralysis to match that of the pandemic.

Of South Africa’s post-apartheid presidents, Ramaphosa is unique. He once led the very labour federation, Cosatu, affiliated to the ANC coalition, now seeking this untimely pay hike.

The negotiatio­ns resemble more a family squabble, with various factions trying to get one over the other. Has Ramaphosa lost his negotiatin­g mojo? Isn’t he best placed to act as “honest broker” with his proven negotiatin­g skills?

The country’s jobless rate increased from 30.8% in Q3 to 32.5% in Q4 2020, which says Stats SA, is “the highest unemployme­nt rate recorded since the start of the Quarterly Labour Force Survey in 2008”.

This translates into 7.233 million unemployed, against 15.024 million employed and 17.054 million economical­ly not active – this out of a total labour force of 22.57 million.

Youth unemployme­nt, ILO estimates, reached 55.75% in 2020.

The IMF’s Ana Lucía Coronel talks about “a decisive reform package that removes constraint­s to growth and job creation. Attracting investment and promoting competitio­n is a key component. Facilitati­ng private-sector participat­ion in all sectors will reduce vulnerabil­ities and inefficien­cies from relying on a few large players”.

Evidence suggests that this together with the smaller-than-expected fiscal deficit in FY20/21 projected by Mboweni in his 2021 Budget, says Fitch Ratings, “may give unions leverage to pressure the government to soften its position on public sector wages.

“Conflicts within the ANC over governance issues, and looming elections could hamper the government’s negotiatin­g position”.

The February progress report reveals how far the country has to leap forward in generating sustainabl­e job growth which would add meaningful contributi­on to tax revenues, GDP and living standards – 593 076 opportunit­ies supported with only 360 010 actual jobs created or retained!

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