The good news is that latest QES release showed a 2.6% year-on-year growth in employment. The bad news is that there are still 200,000 fewer people employed than in late 2008, not to mention that the potential workforce has grown since then. Add the context of rampant youth unemployment, and it's clear that big business, labour and government won't be able to create enough jobs unless broader society lends a helping hand. By Citydex's PAUL BERKOWITZ.
Statistics SA released its Quarterly Employment Statistics (QES) bulletin on Tuesday. This is one of two employment studies that the organisation conducts, the second being the larger, more comprehensive Labour Force Survey (LFS). The LFS provides us with the country’s official employment rate (among other things) while the QES focuses on wages and salaries in different economic sectors.
The difference between the two, as Business Day pointed out years ago, is that the LFS measures the supply of labour – formal and informal, self-employed, agricultural sector – by surveying people and asking them about their state of employment, while the QES measures the demand for (formal) labour by surveying companies in the formal sector and asking them about their staff complement and salary costs. Each survey adds vital information to the overall employment picture. Unfortunately both surveys have confirmed the anaemic rate of employment growth over the last two years.
On the face of it, the overall employment figures, while not impressive, are encouraging. Total non-agriculture formal employment increased by 47,000 in the first quarter of 2011, from 8.25 million to 8.3 million jobs. Comparing the number of jobs on a year-on-year basis, growth was up by 2.6%. This represents the third consecutive quarter of positive job growth, following a year-and-a-half of job losses.
The bad news is that the formal sector is still about 200,000 jobs lighter than it was at its peak in late-2008 (300,000 jobs if you accept the LFS’s calculations) while the size of the potential workforce has grown by much more than this over the last two-and-a half years. According to the LFS, there were 30.9 million South Africans between the ages of 15 and 64 in late-2008. By the first quarter of 2011, this had grown by 1.4 million to 32.3 million people.
In contrast, the year-on-year growth in gross earnings grew by 9.2%, and this was the lowest growth in six quarters. Earnings growth has been double-digit in ten of the last thirteen quarters; apart from the latest growth there were two consecutive quarters where earnings growth was between 6% and 6.5% – and this was during the height of job losses. The statistical relationship is weak but clearly there: higher wages in a sector are correlated with lower job growth over time.
There’s one clear exception and that is the public sector. The “community, social and personal services industry” is a broad sector designation that includes workers in the health, education and government industries, and this is the only area where strong growth in job numbers is coupled with strong growth in gross earnings. These are workers represented by Nehawu, Samwu and Sadtu. These unions, particularly Sadtu, have seen their membership numbers rise strongly over the last few years and consequently their bargaining power.
This increase in bargaining power is not seen just in employee-employer relations but within the broader umbrella of Cosatu and the tripartite alliance. The centre of gravity within the workers’ movement has shifted from mining and manufacturing towards public-sector unions, and it is unlikely that it will ever swing back.
What are the implications for the overall South African economy and broader society? Put another way, middle-class taxpayers don’t seem overly concerned about mining safety issues, job losses in the construction sector or the high price of their cars. Will they be seen to care more about continuing to fund above-inflation increases for teachers and nurses and the resultant crowding out of public spending on new hospitals and schools?
Or perhaps we could attempt to wrestle the real elephant in the room: the shortage of jobs and job opportunities for young people in a country where people under 34 make up two-thirds of the population and the 15-34 age cohort makes up the same percentage of the unemployed and economically inactive labour force. Cosatu opposes wage subsidies for the youth, making it that much harder for them to reach the bottom rungs of the employment ladder. The best we have to offer in the way of greenfields investments are car manufacturing plants and manganese smelters, which are capital-intensive, create jobs at the cost of R3 million a job (and up) and will chew up any electricity surplus we can generate.
Where will the new jobs come from? One thing seems certain: it won’t be thanks to the efforts of big business, labour or government. Unless the broader South African society can plug the holes created by a broken public education system, a reactive and conservative business community and a restrictive and sclerotic labour-legislation framework we will continue to go nowhere fast.
Our best hope comes in harnessing the creative and entrepreneurial power of our young people, and doing it outside of the official and formal frameworks that have failed us thus far. If we are unable or unwilling to look at ways to fund another job in our own businesses, take on an extra intern or find the time and resources to privately augment the maths and science teaching that Sadtu isn’t doing, then we might as well throw in the towel. (Young) black man (and woman), you are on your own – unless we all decide to come to the party. DM
Citydex, a part of Empowerdex, was formed in 2009 and specialises in municipal government: analysis, research, consulting to individual municipalities. We help municipalities with everything from compliance issues to process engineering to local economic development.
Photo: Cosatu members on strike, Reuters.