DREW FORREST, Johannesburg | Thursday
OFFICIAL statistics indicating a significant jump in unemployment have been thrown into relief by Reserve Bank research showing South Africa’s workforce is steadily shrinking – while earning and producing more.
Statistics SA reported this week that the official unemployment rate – regarded as conservative by many -rose more than three percentage points between February and September last year, from 26,4% to 29,5%.
In the first of a series of publications called Labour Markets and Social Frontiers the Reserve Bank emphasises that “the improvement in productivity continues while employment declines”.
A graph underscores downward employment and upward productivity trends over a 20-year period, with the divergence being particularly marked since 1990.
However, the bank also scotches claims that South African wages are high and unrelated to productivity, pointing out that between 1995 and 2000 average real pay a worker rose 2,7% a year, while average labour productivity rose 4,9% annually.
The bank suggests a growing gulf between the unionised and better skilled on the one hand, and marginalised South Africans on the other.
While joblessness is on the rise, it notes as “the most notable change in labour market conditions” an increasing demand for skilled labour.
Wages for unskilled workers have not increased, it says. Trade unions had reduced wage inequality in the union sector by pushing for “sliding scale” increases for the lower-paid, but this was “not necessarily a solution to the problems of skills shortages and structural unemployment”.
The bank appears ambivalent about the role of trade unions, which, it points out, boosted their membership by 127% between 1985 and 1995, while union strength elsewhere in the world fell by half. About 75% of South Africa’s 4,7-million registered workers were unionised.
Examining the British and American experience, it suggests union “wage compression” may have increased wage inequality between the union and non-union sectors.
However, it emphasises that disparity in British and European pay levels rose in the 1980s with “deunionisation”.
It also praises the trend towards productivity-linked pay in South Africa, which it says is an essential pillar in sustaining low inflation, and underlines the growing stability of labour relations. The number of mandays lost through strikes had fallen steadily from 4-million in 1994 to just over one million last year, in part because of long-term wage agreements.
The report highlights falling employment in the public sector in the past two years, but suggests the private sector has taken up some of the slack. Government jobs in transport, storage and communication fell by 8,4% in 2000, but rose 2% in the corresponding private sectors.
On privatisation, it argues for measures to cushion the poorest households from any adverse effects. Social service subsidies and safety nets were imperative, although these had to be balanced with “the requisites of fiscal prudence and financial stability”.
However, the bank adds that administered-price services, such as health and electricity, exert inflationary pressures, and that privatisation could “introduce a more market-driven pricing mechanism”.