Ferial Haffajee
One of the biggest problems with solving unemployment in South Africa is that the government does not know the scale of the crisis.
Politicians and statisticians bicker about the real picture. Unemployment has not been costed to understand its impact on the bottom line. Neither have calculations been made to assess how people who cannot be absorbed into the formal economy are surviving.
The government uses figures from the 1995 October Household Survey, which found that one in three adults who could work are jobless. About 14-million South Africans are classified as economically active. Ministers who are keen to show that the growth, employment and redistribution (Gear) strategy is working complain that official statistics have not captured the gains.
Then last week, a study commissioned by the state’s Central Statistical Service found official tallies are largely accurate and gains in employment have been overshadowed by large numbers of school-leavers who cannot be absorbed into the formal economy.
Whichever way you look at it, more than four million breadwinners are not able to put food on the table or sustain a livelihood without assistance.
Gear has translated into low growth and growing joblessness instead. On the face of it, this is not a pretty picture ahead of an election next year.
Professor Iraj Abedian of the Budget Project at Cape Town University says it’s a case of “lies, damned lies and statistics”.
He says a global economy has local effects: production processes change and statistics fail to capture the changes. Increasingly, out- sourcing and sub-contracting mean companies may close or get smaller and become micro-producers.
“It may have produced more jobs, but when it closes the Central Statistical Service records only the job losses,” says Abedian. “We don’t have the flexibility to cope with the changes.”
“Not so,” says Asghar Adelzadeh of the National Institute for Economic Policy. “The Central Statistical Service has used a consistent data set. Perhaps the message it is sending is not in support of macro-economic policies and plans.”
Adelzadeh argues for cuts in interest rates to stimulate spending, a focus on the domestic market and not only exports, and greater public investment in housing and other infrastructural projects.
In the meantime, the social costs of unemployment are ballooning as welfare spending tries to fill the gaps, and crime is growing as more and more people get sucked into a hidden economy with a turnover of billions.