Opinionista Johann Redelinghuys 3 March 2014

Millions of ‘job opportunities’? Pull the other one!

Politicians keep blathering on about the millions of “job opportunities” they will create without having a clue about how they will deliver on this promise. To make matters worse, they seem to have little idea of how great strides in technology are destroying large swathes of jobs and how structural unemployment is becoming embedded in many of the world’s economies.

Mr Pravin Gordhan, in his budget speech, said under the heading of “Government Expenditure Programmes”: “Government has spent more than R100 million on employment programmes over the last five years, including municipal and provincial spending. More than four million job opportunities were funded over this time. Allocations will continue to grow strongly and six million job opportunities will be created over the next five years.”

Helen Zille, promising in her DA manifesto to address jobs, education and corruption, said: “The manifesto we release today is a manifesto for jobs. Job creation is only possible if we cut corruption.”

She went on: “Jobs are possible. Six million real, permanent jobs are within our grasp if we seize the moment at this election. We will stop politicians and their families doing business with government.”

How she thinks stopping corruption will create six million ‘real and permanent’ jobs is baffling. And how Pravin Gordhan will deliver on his promise, also of six million jobs, when the ANC has failed on every count to achieve its stated goal of job creation is equally perplexing. What does it mean when he says four million jobs were “funded”? Is that for employment in the government? And what, for goodness sake, is a “job opportunity”? Is that a job, or isn’t it?

Let’s accept that these mealy-mouthed statements are politician-speak for the benefit of a run-up to the election. At the same time it is embarrassing to see how little understanding there is about jobs and where they really come from. It is also sad to note how out of touch they are with what is going on in the world and how ignorant they are of the fact that full-time, permanent jobs are ebbing out of economies in many countries, even in first-world countries like the USA. Technology is eliminating jobs. Information-gathering jobs and layers of middle management positions are eliminated by increasingly sophisticated technology. So are jobs in manufacturing that used to require skilled artisans and now need no more than someone monitoring banks of computer-aided manufacturing machines.

No politician can create jobs. All they can do is expand the civil service and local government. But that would not be creating the productive jobs that generate revenue for the country and could alleviate poverty. Instead they are costing the taxpayer more to “fund” the jobs and to make it look like progress.

Yes, infrastructure projects might create jobs, but many of those will require skills and competencies that are not found in the poor population they are meant to be uplifting. Our country’s skills education and employment vacancy rates are seriously out of sync. It is estimated that there are more than 800,000 vacancies in national and local government, and at the same time we have more than 600,000 graduates that are unemployed.

This has not been a government that has worked well with private sector business. In fact, there has been a hostile stand-off for much of its tenure. But if politicians don’t come to realise that unless they work in close cooperation with business, they will go nowhere. Private sector investment and particularly foreign direct investment are the real drivers of job creation. All that politicians can do is to woo investors with all their might and create the climate for that kind of big budget investment.

But South Africa, with its growth rate below that of most of our competitors for dominance in Africa, is losing its investable appeal. Our perilous labour situation simply compounds the problem. It is said now that at best we may become a services hub for Africa, with the big investment projects going to East and West Africa.

Good investment and more confidence would certainly make some difference, but the nub of the problem remains. The number of real and permanent jobs is not expanding. Increasing numbers of people are working on short-term contracts or ending up in confused self-employment. What we have to do is to prepare ourselves and the next generations to face this reality.

In Europe and the USA there is much talk these days about the so-called ‘jobless recovery’. Everyone assumed that if the economy could find its feet again after the great recession that started in 2007/8 there would be work again and the world would be back on its track to proper employment. This is not happening.

An insightful piece of research conducted by Professor Erik Brynjolfsson last year at the MIT Sloan School of Management has pointed out that in the past, productivity and job growth have always tracked together; as productivity goes up, so does employment. Since this most recent recession, however, productivity has gone up but the number of jobs has not followed. This is seen as evidence that the technology that is employed to improve productivity is also eliminating jobs.

Brynjolfsson foresees dismal prospects for many types of jobs as powerful digital technologies are increasingly being adopted not only in manufacturing, clerical and retail work but also in professions such as law, financial services, education and medicine. We are heading toward a time of artificial intelligence, driverless cars, massively improved computing power, greatly expanded storage capability and the automation of many routine tasks.

There used to be a belief that improvements in technology would also create improved job opportunities. This is still partly true. But the jobs technology creates usually require sophisticated technical qualifications and the kind of skills that are in short supply here and all over the world.

With our precarious appeal as a place for sustainable long-term investment and the powerful realities of technology converging on us, politicians would be well advised to take care before making reckless promises. For those parties that don’t have a realistic prospect of being voted into power it may not be quite so damaging. But how can the leaders of a dominant party leave themselves so exposed? DM


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