Sunday Times Business Times writes that in the 10 months since launching the jobs summit to create new employment, the government has little to show for it. But as data published by Stats SA this week reflected a rapidly escalating unemployment crisis, the state and its social partners were scrambling to implement the summit’s resolutions.
On Thursday labour, business, civil society and government representatives met with President Cyril Ramaphosa to provide a progress report on resolutions that have been stalled by challenges and regulatory bottlenecks.
But the target of creating 275,000 jobs a year, which the president announced at the summit last year, remains a pipe dream. This week Stats SA data showed the unemployment rate had risen to 29% in the second quarter.
Thulas Nxesi, the employment and labour minister, said of the 77 commitments made at the jobs summit “almost 60% of them need government” intervention. The concerns tabled on Thursday included the security of the electricity supply, restrictions on tourism visas and waiting periods of up to two years to secure water licences.
Nxesi blamed other factors for the lack of momentum following the jobs summit. “We must accept that the momentum of the implementation was … disturbed by the elections; at some point there was restructuring of the ministries and the appointment of new ministers, and following that was the issue of a very tight programme of government.”
The social partners now want to fast track certain resolutions. Monthly progress meetings chaired by Ramaphosa will begin next month.
“We’ve agreed on the issue of clear time frames and milestones,” Nxesi said.
The refined report will be presented to the presidential high-level team by September 2 and will later be made public.
Cas Coovadia, CEO of the Banking Association of SA who represents Business Unity SA, said it was necessary to take “hard discussions, make hard trade-offs and get into the nitty-gritty of tough decisions we need to take as a country”.
Among the issues are retrenchments. Last year labour wanted a moratorium on retrenchments. But Coovadia said this week: “The environment at the moment is such that businesses are concentrating on efficiency just to keep their heads above water.”
On visas, he said business’s view was that “while we’re working on legislation let’s accept that the current visa regulations are inhibitive and let’s say we’re not going to apply them while we change the law. Let’s take quick wins to boost confidence and to boost certainty.”
Cosatu general secretary Bheki Ntshalintshali said labour had arrived at the meeting sceptical but some progress had been made in, for example, concluding a master plan for the textile, clothing and leather footwear value chain, and in the furniture value chain.
He said the labour federation was positive all the problems could be overcome.
Coovadia said: “We believe that we have an administration in place now that is serious about dealing with the issues and I think that we’ve reached a stage where all stakeholders recognise that we are in crisis mode and we need to pull together to address that.”
Predictably, the government’s jobs summit, which was launched with much fanfare last year, has yielded little fruit. Trade unions, the most ardent supporters of the initiative, are beginning to vent their disappointment in the wake of the worst unemployment figures in more than a decade, released this week.
Sceptics of the summit, staged in Midrand in October last year, and of some of its less-than-realistic resolutions probably feel vindicated in an “I told you so” kind of way.
Following news that the unemployment rate had swelled to 29% in the second quarter of this year, Cosatu spokesperson Sizwe Pamla criticised the government, saying it was clear it had no plan.
By promising only 2-million jobs over a decade, when SA has the highest unemployment rate worldwide, the country’s leaders had admitted defeat, he said.
An equally frustrated Zwelinzima Vavi, the general secretary of the South African Federation of Trade Unions, said unions had made endless petitions to the government to abandon its current economic policies, and their cries had fallen on deaf ears.
But it is nonsensical for labour unions to cry foul now when, for years, they have contributed to short-sighted policies and failed to provide solutions to the chronic jobs bloodbath or commit to a few serious trade-offs that could alleviate the situation.
In recent years, labour has been at the forefront in trashing the proposals of a perplexed business sector and civil society and tossing these onto the heap of politically unpalatable ideas at a time when SA thought it could afford to maintain and even accelerate populist policies.
But now everyone is panicking, given the ticking timebomb that the elevated youth unemployment rate presents. For those aged 25-34, joblessness at 35.6% is now double the rate of middle-aged people.
The government’s ideas are floundering and it should reconsider proposals, even radical ones, that would lead to job creation.
In 2016, the Centre for Development and Enterprise suggested export-processing zones with access to dutyfree imports, presumably of inputs, and exemption from some legislation to significantly reduce the cost of labour.
Employers would determine wages and working conditions with employees without affecting wage conditions elsewhere in SA.
As Stats SA reveals, the issue is that a large section of the workforce is unskilled and unprepared for the fourth industrial revolution. Close to a third of the 21,000 jobs created in the second quarter of this year were in elementary and domestic work positions. Desperation to put food on the table may have also forced some skilled people into low-income jobs.
What is clear is that the chickens have come home to roost, and trade unions and the government have to abandon fruitless ideas and review the “decent work agenda” of the 1990s which priced unskilled workers out of the market.
For those aged 25-34, joblessness is at 35.6%, double the rate of the middle-aged
The original of the above report by Asha Speckman appeared on page I of Sunday Times Business Times of 4 August 2019
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