With many companies planning to cut costs by retrenching workers amid the strengthening rand, the Congress of South African Trade Unions (Cosatu) has added its voice those condemning the looming job cuts, appealing to the South African government to intervene.
The union federation on Friday said it was disturbed by Statistics South Africa’s (Stats SA) report that the country’s formal employment dropped by almost 1% in the third quarter of 2003.
The union federation stated that this loss of almost 60 000 jobs signalled a black Christmas for many workers.
The biggest losses were in manufacturing, construction and business services, while some gains were recorded in the retail sector.
The formal non-agricultural sector of the South African economy shed about 57 000 employees between March and June, according to Business Report.
Quoted figures released by Stats SA show that major job losses occurred in the construction, financial and business services, and manufacturing industries.
Sectors where employment increased included mining, transport and communications.
Stats SA said 6,4-million people were employed in the formal non-agricultural sector at the end of June.
It is not known how many of the estimated population of 42-million work in the informal sector of the economy.
Cosatu added that the job losses clearly result, in large part, from the overvaluation of the rand.
“They go hand in hand with very slow growth in the economy, at just over 1% in the last quarter.”
The trade union continued that it has repeatedly called on the government to take action both by explicitly acknowledging that the rand was overvalued and by immediately and substantially reducing interest rates.
“With inflation now at around 4,5%, the real interest rate is well over 5%. That both slows the economy overall and attracts a speculative inflow of foreign capital, pushing up the value of the rand.”
Cosatu said in the longer term, the unemployment crisis could be addressed only through an active structural policy geared above all to job creation in both the dominant formal economy and the so-called “second economy”.
To help stem the loss of jobs, Cosatu said it has decided to campaign for consumers to buy local products under the Proudly South African logo.
“By buying goods made in South Africa this Christmas, consumers can help build our economy and save jobs.
“With unemployment at the record level of 31%, more job losses cannot be tolerated. Government must act urgently to reverse this trend.” — I-Net Bridge