A Campaign for jobs as a response to the latest report on levels of unemployment
12th May 2016
Highlights of the unfolding tragedy
The StatsSA Quarterly Labour Force Survey for the first quarter of 2016 is a horror story for the working class in our country. The story line has not changed since the last Quarterly Report.
The devastating news confirms what we have known all along, which is that unemployment, poverty, inequalities and corruption are worsening. The millionaires continue to get more millions whilst workers and the poor and getting poorer and more desperate.
Unemployment has worsened to a staggering and record breaking 8, 9 million or 36, 3% of the adult population of working age when we use the more realistic definition of unemployment which includes discouraged work seekers. Five of the nine South African provinces have an unemployment rate exceeding 40%:- Eastern Cape, Northern Cape, North West, Mpumalanga and Limpopo.
During the period of January to March 2016, unemployment increased by 521 000 and employment decreased by a staggering 355 000. The absorption rate is at a dismal 43% with the labour force participation rate being 58, 7%.
Even more concerning is the fact that the number of employed people in the formal sector decreased in six industries in the first quarter of 2016: construction down by 88 000 jobs, manufacturing down by 80 000, trade by 40 000, the finance sector by 28 000, utilities by 13 000 and mining by 12 000. The only two sectors in which an increase in employment was seen were those where highly precarious jobs dominate – community and social services (with an increase of 34 000 jobs) and transport (with 10 000 more jobs).
In this unfolding tragedy even the informal sector decreased by 111 000 in the first quarter of 2016. The biggest informal sector job losses were seen in trade – a staggering loss of 79 000 jobs, suggesting a massive erosion of the buying power of the working class – the bedrock of informal trade.
Year-on-year job losses in the manufacturing sector were a catastrophic 114 000, utilities 32 000 and construction 12 000.
What do these statistics tell us?
First, we accept that this is not a passing crisis but a deepening calamity. We have been in a deep unemployment crisis even prior to the 1994 democratic breakthrough. But that crisis is getting worse by the day.
Second, the victims of the unemployment crisis continue to be the same as those who were victims under apartheid. The legacy of apartheid continues! It is Black people in general and Africans in particular who disproportionately carry the burden of unemployment; it is youth who constitute 75% of the nine million people unemployed; women’s unemployment is 40,2% compared to 32% of men; and lastly it is people in the rural areas who are bearing the brunt of unemployment. The rurally based provinces are the worst affected with Eastern Cape the undisputed champion with an unemployment rate of 44,5% and a participation rate of a mere 46,4%.
It is those with fewer recognised skills that are the worst victims of unemployment. “The highest share of the employed population with tertiary qualifications (graduates and other tertiary) was found among the white and Indian population groups. In Q1: 2016, 48, 8% of employed white persons and 32, 1% of employed Indians had a tertiary qualification. During the same period the share of employed black Africans and coloureds with tertiary qualifications was 15, 7% and 14, 5% respectively. More than half of employed black African and coloured people have an educational level of less than matric.”
Why has the Alliance failed to break the backbone of unemployment?
We are of the view that the crisis of unemployment is structural and therefore can only be solved by structural interventions. The calamity will deepen further unless moves are made to share the wealth of our country, including the land, equitably amongst our people. Our liberation will not have real meaning until the property poverty of the majority has been addressed. The structural crisis of our economy is also due to the fact that our mineral wealth, the banks and the manufacturing sector remain largely in the hands of the white monopoly capital and are increasingly owned externally.
The rhetoric about the need for a second phase of a radical economic transformation has been abandoned by the Alliance partners in favour of press conferences aimed at appeasing rating agencies. Yet the working class – the poor have long arrived at junk status.
What this country needs is a complete change of political and economic direction, and the adoption of policies which vigorously confront the structural deficiencies.
The structure of the economy we inherited from the colonial and apartheid era must be changed. Our economy continues to be dominated by mining, finance capital and heavy chemicals. We need an economy that will ensure mass industrialisation and beneficiation of the downstream sectors to build new productive industries which create jobs on a large scale. Piecemeal interventions here and there are no solution.
Fiscal and monetary policies must be engineered to support this new direction. Government adopted the Industrial Action Plan (IPAP) and the New Growth Path (NGP) but simply failed to change the fiscal and monetary policies associated with GEAR. These conservative and inappropriate fiscal and monetary policies have arrested any possibility of a new industrialisation path.
We need a government made up of people that are not riddled with conflicts of interest, and that is not afraid to intervene decisively in the economy. This must include strategic nationalisation and social ownership, and the use of a variety of macro-economic and other state levers to regulate and channel investment, production, consumption and trade to deliberately drive industrialisation, sustainable development, decent employment creation, and regional development. The historical patterns of colonial exploitation and dependence have to be broken.
New mandates must be given to the Treasury, the Reserve Bank, the State Owned Enterprises and the National Planning Commission to pursue an agenda aggressively aligned to these new priorities.
A new wage policy that abolishes the apartheid wage structure and replaces it with a more equitable wage structure underpinned by collective bargaining and a meaningful national minimum wage must be introduced. This must be buttressed by a comprehensive social security system that helps to root out hunger and growing inequality.
We need to be moving towards the consolidation of retirement funds and the creation of a central retirement fund investment vehicle in the private sector, along the lines of the PIC, aimed at directing the savings of workers into productive investment. And we need to establish the long talked Workers Bank.
We will not succeed if we do not also address the education and training crisis. In twenty-two years of democracy very little has been done to address the quality of our education system. We cannot compete even with our neighbours let alone the industrialised economies. The children of the workers and the poor are trapped in an inferior education system. 70% of those who pass matric exams come from a mere 11% of our schools. Almost half of our children drop out of school before they reach Matric. 41% of students who enter our universities drop out before graduating. The relationship between this and the unemployment crisis cannot be over emphasized.
These are the demands that the new independent, democratic and worker controlled federation that is neither paralysed nor compromised should take up. The 53 unions that have to date committed themselves to such a federation have agreed that our main campaign must be for the large scale creation of quality jobs.
Our Campaign for Jobs will unite those workers fortunate enough to be still employed in the formal sector, vulnerable workers who have been outsourced and sub-contracted, informal workers and the unemployed. The Campaign for Jobs will help unite all these into a single movement that will take these demands to the captains of commerce and industry, and to the Alliance government.
For further information and comment, please phone Zwelinzima Vavi on 079 182 4170
Statement of the Steering Committee of the 53 Independent Unions
A Campaign for jobs as a response to the latest report on levels of unemployment