There is some good news in the unemployment numbers out today (read the Quarterly Labour Force Survey here). From July to September, 399,000 more people were in work than in the previous quarter. There are in fact 979,000 more people in work than from July to September 2022.
But good news is relative in South Africa when it comes to unemployment. The number of people out of work is still catastrophically high. We still have the highest unemployment rate in the world. Among the working age (15- to 64-year-olds), we still have just four in 10 people in paid work.
Alarmingly, three-quarters of those looking for work have been doing so for more than a year. That means that among the 12 million people available for work – the expanded measure of unemployment – nine million have been unemployed for more than a year.
Over the past year, the second-biggest job-creation sector (after the finance sector) was community and social services, which includes the public works programmes that accounted for 1.8 million jobs in the 2022/23 financial year.
Establishment figures like Andrew Donaldson, ex-deputy director-general of National Treasury, and Kate Philip, lead in the Presidential Employment Stimulus, tell us that we should be expanding public works because supporting an unemployed person far outweighs the cost.
Yet, the finance minister just cut the budget to public works programmes, imperilling hundreds of thousands of these jobs.
Those who benefit from these programmes are disproportionately young people who are finding it the hardest to find work. Under-25s suffer a 68% (yes, sixty-eight percent) unemployment rate. Public works benefits them and we’re cutting it back.
We would all love for our private sector to be thriving in South Africa. Considering the lack of support it gets, one could certainly argue that it makes the best of a very adverse environment. What is less appreciated, perhaps, is how public works is currently supporting one of the most crucial enablers of private employment: Education.
Read more in Daily Maverick: Hundreds of thousands of jobs likely to disappear with Godongwana’s public employment budget cuts
The Presidential Employment Stimulus (PES) is doing just that. Through its school assistant programme in 23,000 public schools, which makes up the majority of its 650,000 jobs a year, there are early signs that supported pupils are 1.5 years ahead of their peers.
It is for this reason that Progress, a new party focused on jobs, is promising an expansion of economically and socially beneficial public works alongside extensive support for micro-entrepreneurs.
Evidence coming out of the PES, as well as from huge public works programmes in other countries, such as NREGA in India which employs 55 million (yes, fifty-five million) people a year, suggests that public works can play a far more important role in dramatically reducing unemployment in South Africa.
Done well, modelling suggests not just that the country can afford it but also that GDP would grow faster than debt and that it can be a crucial supporter and enabler of a private-sector recovery. DM
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You can polish and dress up a turd any way you like it’s still a turd
Naivety personified. The last thing SA needs is yet more people draining the public purse which is already staggering under a bloated and inept public sector funded by an ever diminishing tax-base(BTW-no person paid from the public purse is part of the tax base). The interest bill alone on public sector debt is bankrupting the country.
Until the ANC government is removed there is no hope of an environment in which private enterprise and genuine sustainable job and wealth creation can even begin to recover let alone prosper.
Witness the job creation attempts by government in 19th century France.
Thousands employed to dig trenches and then thousands to fill them in again!
The author would better spend his time promoting free-market enterprise.
The current geopolitical backdrop makes things very difficult for developing countries and emerging economies. The war in Ukraine has not been helpful as this has created a difficult situation following Covid with high inflation and interest rates. When you have high interest rates, companies would rather keep their money in a risk free investment that are bonds and other fixed income instruments. Higher interest rates in the advanced economies have led to money leaving the developing and emerging economies. These geopolitical issues and the conflict in the Middle East have slowed recovery after Covid not withstanding our own electricity and logistics challenges. The reckless response of the US, Its western allies to the 7th October attack has been done without due regard not only to the humanitarian crisis in Gaza but to the entire global economy that would be affected should the conflict widen. We have very tough economic conditions largely out of our own creation through industrial scale corruption and the US is very with the situation we are in because it has weakened us. We need a social compact driven by domestic savings to build our economy and create jobs otherwise we are going to be a Haiti if we are not very careful where criminals will be running every aspect of our country as they are doing in many areas.