We're still coming up short on jobs, says Patel
Jobs are not being created fast enough to absorb the rising labour force, despite two consecutive quarters of job creation in SA, says Ebrahim Patel.
Economic Development Minister Ebrahim Patel says that after seven consecutive quarters of job losses there have been two consecutive quarters of creation, but that jobs were not being created fast enough to absorb the rising labour force.
Taking questions in the National Assembly on Wednesday, Patel said that up to 64 000 new jobs had been created in the last three months and that 150 000 jobs had been created in the nine-month period since the adoption of government’s economic policy called the new growth path.
However, Patel pointed out that in the first two quarters of the year about 200 000 new job seekers had entered the market in each quarter.
“We are not creating enough jobs to take into account the rate of growth of the labour force,” he said.
Patel pointed out that 42 000 jobs had been lost n the agricultural sector, but that the informal sector had created 41 000 jobs.
The new growth policy aims to create 5-million new jobs by 2020.
Coming up short
Patel also said that that target “was always a stretch target, especially for an economy with such high levels of unemployment”.
At least 27% of South Africa’s workforce was currently unemployed and, according to some—such as the Congress of South African Trade Unions—this actually could be as high as 40%.
Earlier in August Finance Minister Pravin Gordhan said South Africa needed to restructure and reform its economy in order to achieve growth levels sufficient to reduce unemployment.
“Given our current growth projections, South Africa may only create four-million jobs by 2025, not enough to make a significant dent in unemployment,” Gordhan said.
The Treasury sees growth at 3.4% this year, far below the level it says is needed to create jobs. Some analysts say the global crisis might whittle down the rate further.
Gordhan suggested that South Africa might have to relax its labour laws in certain cases to grow jobs.
“We may have to change the way we see the labour dispensation in South Africa,” he said.
Gordhan, by way of example, said a balance needed to be found to retain the jobs of the 10 000 people working at clothing factories in Newcastle, KwaZulu-Natal, while still allowing them to earn a reasonable wage and keeping the factories open.
Factories in the area had threatened to close down and relocate to Lesotho or Botswana if they were forced to pay minimum wages.
Gordhan said laws might also have to be relaxed to allow young people to enter the workplace and gain skills and experience at lower wages, but not at the expense of people who already had jobs.
Unless such changes were made, “we will not be able to make the breakthrough we need to create jobs in South Africa”, Gordhan said.
However, this would be done in the awareness of the bitter struggle fought against apartheid for human rights, decent work and decent wages, he said.
” ... we are not going to lose what we have gained through hard struggles”.—I-Net Bridge, Sapa