Cosatu 's response to Quarterly Employment Statistics 25-07-08

 

COSATU response to the Quarterly Employment Statistics

Every time that new employment statistics are released, the long-held view of the Congress of South African Trade Unions is unfortunately vindicated - that the level of unemployment in South Africa has been and still is a national disaster, and that we are still failing to resolve it.

The Quarterly Employment Statistics (QES) released on 24 June 2008 are no exception. They provide further powerful justification for COSATU's mass action campaign against job losses as a result of the electricity crisis, which is set to start on 9 July 2008 and culminating in a national stayaway on 6 August.

Up to now COSATU has been ignored when it has warned government to change course and adopt much more interventionist policies to bring down these high levels of joblessness. We now have high hopes of interacting with the new ANC leadership elected at the Polokwane Conference and the new government they will be leading next year, to forge new policies to tackle the crisis of unemployment poverty and inequality.

But in the meantime we are losing patience and will be taking our message to the streets - to make clear that we are failing to create anywhere near enough new jobs, especially quality jobs. We shall be raising the alarm bells to warn of even more job losses as a result of the electricity crisis, rising interest rates and the rocketing cost of fuel and food, all of which hit the workers and the poor the hardest.

We are insisting that workers should not have to pay with their jobs for the electricity crisis. Government ministers must take full responsibility for recklessly ignoring Eskom's warnings sent to them way back in 1998 that a massive injection of funds was required for new power generation to prevent the kind of crisis we are suffering today.

These are the factors contributing to a slow-down in growth and job creation, and pose a major threat of job losses. Employers are already shedding jobs through natural wastage and retrenchments remain a real threat.

COSATU will not let this happen. Unemployment is still far too high and it is bringing misery to millions of families. We are appealing to all workers, communities, churches and civil society to join in our protest action and help us to bring unemployment and poverty down.

The QES indicate that employment increased by 174 000 jobs between March 2007 and March 2008. Formal non-agricultural jobs were created in mining and quarry (22 000); electricity and gas (1000); wholesale, retail, car repairs, hotels and restaurants (38 000); financial intermediation, insurance, real estate and business services (67 000); community, social and personal services industry (59 000).

COSATU is certain that such minimal growth in employment will not achieve the policy targets set through ASGI-SA of halving the 2004 unemployment levels by 2014. This will require a greater impetus from government to achieve substantial increases in creating decent, quality and sustainable employment opportunities.

Of particular concern is the decline in employment in our manufacturing sector - one of the largest contributors towards GDP - where the number of employees has decreased by 11 000 year-on-year. Jobs continue to be shed in the motor industry, clothing and textiles and wood products. This remains worrying in light of the National Industrial Policy Framework that targets key industrial and labour intensive sectors for employment growth. Employment also declined in the construction industry by 2000 jobs.

Employment scenarios researched by the HSRC indicate that if there is any hope in halving unemployment by 2014, then we would require 5 million jobs to be created between 2004 and 2014. This would need employment growth of about 500 000 jobs per annum. Considering that these employment targets would have to factor in a labour force growth of between 350 000 to 450 000 per year, delivering sufficient jobs is becoming a distant dream.

Since employment is largely determined by economic growth, poor economic growth will slow down employment creation and reverse already low levels of employment gains made. To avoid declining employment we would require consistent economic growth of 6% and more per year.

However GDP indicators reveal that our economy is slowing down. Annualised GDP growth was 4.9% in 2004, increasing to 5% and 5.4% in 2005 and 2006 respectively but declining back to 5.1% in 2007. In the first quarter of 2008 the annual rate of economic growth reached a low of 2.1% compared to the first quarter growth of 5.1% in 2007. This is a decline of 143% in growth between the two corresponding quarters.

This growth figures are starting to provide a dismal state of our economy in addressing the fundamental challenge of creating jobs for the millions workers out there seeking employment

Already leading economist, including the Reserve Bank Governor have predicted a further decline in growth, as a result of current food and energy price rises, particular the huge cost in the increase of electricity. The decision of the National Electricity Regulator (Nersa) to increase annual electricity costs by 27.5% will increase inflation by 0.9%, GDP will fall by a further 0.1% and low skill jobs will decline by 0.3% or in excess of 12 000 jobs.

In addition, increases awarded by Nersa to non-municipal customers paint dismal picture for inflation and growth, with the overall annual average increase now to exceed 47%. These increases are likely to impact significantly on marginal mines and labour intensive sectors where energy is a crucial input cost; and may lead to further employment decline, in sectors such as agriculture.

The impact of the electricity supply cost, increasing food and fuel prices will place pressure on inflation, and failure to meet inflation targets, which will lead to a continuation of the misplaced monetary policy of increasing interest rates, which have contributed towards lower than expected growth and employment creation.

Job creation, linked to reducing poverty and creating decent and quality jobs, is a crucial pillar of our development strategy. Many of the small number of new jobs currently created are low paying, with poor conditions of employment, poor health and safety protections and very little employment security. This will provide little help in reducing poverty, and will perpetuate inequality, and be a constraining factor for growth.

COSATU believes that an interventionist approach is required by the state to be a more active player in the labour market. While the National Industrial Policy measures are rolled out, government must allow for larger spending in public employment programmes.

The QES statistics raise a number of queries rather than providing adequate, consistent and accurate statistical information. The continued inconsistency of employment and income data between the Labour Force Survey and the QES do not help in developing appropriate policy interventions to reduce employment and poverty. In this light, COSATU welcomes the recent announcement by StatsSa on the need to overhaul the manner which questions are asked, data captured and disseminated.