The large 17,5% year-on-year drop in the number of people employed in the formal building industry in September 2003 highlighted the problem South African statistical authorities have in collecting credible employment data given the increase in casualisation in jobs, which is a global phenomenon.
Construction was one of the best-performing sectors in the South African economy in 2003, expanding by 4,9% in real value-added terms compared with a rise of only 1,9% for the economy as a whole.
This estimate of real value-added growth is confirmed by the 7% increase in domestic cement sales to 9 105 466 tons after increasing by 5,9% to 8 511 851 tons in 2002 following only 1,8% growth in 2001.
Currently the construction industry only accounts for 2,9% of gross domestic product (GDP) in real value-added terms, while in most other countries construction has a share normally in excess of 5% of GDP.
The 288 000 people employed in the formal construction industry accounted for 4,5% of total formal employment of 6,368-million, but in the second quarter 2003, the 41 000 jobs lost in construction had a 25,5% share in the 161 000 jobs lost in that quarter.
South African Minister of Finance Trevor Manuel said during his Budget briefing on February 18 that there was a need for better labour data, as “unless you can measure it, you cannot deal with it”.
Manuel was responding to my question as to how the government would lower the unemployment rate by half by 2014, given that GDP growth would only reach 4% in 2006, while a decade of growth at an average 2,8% had seen the unemployment rate rise.
“One of the problems with the labour market is that there is an increasing amount of casualisation taking place. Now for you journalists who decide to go freelance, that is not much of a problem, as you can negotiate your own worth and ensure that you are covered for other benefits such as pension and medical aid, but for the less sophisticated worker, casualisation is a major problem as he/she becomes an unprotected worker, not subject to normal labour legislation.
“In addition, if casualisation takes place, you disappear from the company’s payroll, so the labour data will show a reduction in employment, even though you are still doing the same work and in fact no reduction in labour has taken place,” Manuel said.
To improve labour market data, the two main data series, the semi-annual household-based Labour Force Survey and the quarterly establishment-based formal sector Survey of Employment and Earnings, will undergo methodological revisions with the help of foreign statistical agencies.
In Germany the latest estimate is that about 17% of workers are unregistered or casual. This estimate is based on work done by Professor Friedrich Schneider of Linz University, using data on how many unregistered workers there are in various sectors.
The tourism industry has the highest percentage due to its seasonal nature with a quarter of hotel and restaurant personnel unregistered. The next highest is cleaning at 16%, 15% for taxi drivers and 14% in construction.
The Labour Force Survey said there were 626 000 workers employed in construction in South Africa in September 2003, implying that 54% of workers are in the informal sector. The Labour Force Survey showed that 43 000 jobs were created between March 2003 and September 2003. — I-Net Bridge