Almost 50000 people joined South Africa’s growing ranks of the unemployed in the first six months of this year, as the embattled economy continued to bleed jobs in critical sectors like mining and manufacturing Adcorp reported yesterday.
But while employment in the private sector shrunk, government employment swelled by 6.2% in the same period.
“The public sector now accounts for all the job creation in the economy for 2011 as a whole,” says Adcorp labour market analyst Loane Sharp, adding that last month’s employment decline was sharpest in the manufacturing (19.9%), mining (19.3%) and construction (16%) sectors.
One glimmer of hope comes from the unofficial sector, which continued to create jobs, says Sharp.
In August the sector employed 16 917 additional people, enhancing the “informalisation” of the country’s workforce,” he says.
But the harsh reality is that each job lost by a breadwinner has a devastating knock-on effect on the people who depend on them, says Brait chief economist Colen Garrow.
“It is deeply hurting every time people lose their jobs because one lay-off may affect five to eight family members,” said
“For poor families the result of a lost job by a breadwinner will even derail the education of the young ones. Without any doubt, the deteriorating of job losses situation will push a number of families into deep poverty, added Garrow.
The continuing haemorrhaging of jobs in the SA economy is highlighted in the August Adcorp Employment Index.
It reveals that the mining, manufacturing and construction sectors, all key drivers of the economy, shed jobs at double-digit rates, leading to calls by economists for urgent corrective action.
The authoritative reports blame the crowding by government of private sector participation in the economy as one reason for SA’s dismal employment picture.
The loss of 50000 jobs within six months is seen as a catastrophe by economic observers, especially as it comes on top of the more than 1 million jobs already lost during the ongoing financial crisis.
The Adcorp index overall employment declined by 2.1% in August, the fourth consecutive monthly decline.
It warns that employment conditions remain “exceedingly weak”, suggesting that the prospect of an improvement in permanent jobs was a long way off.
Garrow said it was difficult to see how government could reach its ambitious target of creating 5million jobs by 2020.
While the New Growth Path (NGP) targeted unskilled and semiskilled workers, the sectors it targeted were precisely the ones that were shedding jobs, notably manufacturing and mining.
“It’s abundantly clear that for the economy to grow at a more respectable pace, a drastic rethink is required on the labour market,” he said.
“Scrapping the minimum wage to get more people actively involved in the economy, is a start and long overdue.”
Econometrix chief economist, Tony Twine, said that both the manufacturing and mining sectors had been through turbulent and uncertain times.
It was not surprising they were not rushing out to hire people and expanding their workforce, he said.
“We are faced with the paradox that these sectors have been identified to absorb labour, just at the time when their employment levels are falling.”
But, Chris Hart, Investment Solutions chief economist, argued that the main reason for the lack of job creation was that labour laws were too hostile to small business and “very obstructive” to creating jobs.
“One of the biggest problems is that there is too much policy uncertainty, particularly in the mining and agricultural sectors – something which investors shy away from.
“The solution for this problem is simple. The government must aim at creating 20 million jobs in five years, instead of the projected 5 million jobs in the next 10 years,” Hart said.
Article courtesy of The New Age – for the original article, please click here
