For decades radical economists have been uneasily aware that the days of full-time employment may be over. It is not easy to admit that we have no way to ensure a job for anyone with some capacity who wants to be employed. So the issue is fudged by “if onlys”. If only our growth were export-based, if only more people were skilled, if only South Africa were more competitive, if only labour were more “flexible” …
What if we have to face the fact that, globally, there will never again be jobs for everyone?
A recent report by the United States-South Africa Citrus Alliance shows the weakness of the focus on exports as a job-creator. The Citrusdal-based alliance announced huge growth benefits from the US’s Africa Growth and Opportunity Act (Agoa). It expects to increase exports from South Africa to the US from 40 tonnes of fruit in 1999 to 32 000 tonnes this year.
But that growth over five years has created only about 1 000 new jobs for farm workers and packers — a tiny drop in the ocean compared to the millions of work seekers.
Chairperson of the alliance Piet Smith said that, of economic sectors, agriculture can create the most jobs per unit of capital invested — but this is still only 1 000 new jobs for growth valued at R260-million.
Exports are particularly capital-intensive because international competitiveness requires low-cost production. That means shedding jobs. Advocates of export-led growth suggest exports bring jobs indirectly, by allowing for equivalent imports that create jobs. Look around you. South Africa has consistently lost jobs since export-led growth became the focus.
Also, export markets are less predictable than home markets. Smith says: “We could, in future, consider extending our citrus-tree plantings and packaging facilities, depending on continued export growth of about 10% to 15% a year into the US market.”
Is that dependable? Smith concedes that US citrus farmers could start to lobby against our exports, and the Agoa legislation, just extended, could be revoked. Considering how long it takes to get trees growing and bearing fruit, the investment seems risky.
Contrary to received wisdom, employment-producing growth is not going to happen without a cold-eyed, radical rethink. The digital revolution has produced an exponential increase in labour-shedding technology. The claim that joblessness in South Africa is because of lack of skills is largely a myth. We have unemployed skilled artisans and even graduates — 14% more than in 1995. The same claims about skills are made in Europe.
The US is hardly short of skills, but unemployment is an intractable problem. Although official statistics say a million jobs were created in the past four months, payrolls have risen by only 0,2%. New employment is almost entirely at the level of what is now called “the working poor”. More than 80% of new jobs are at the lowest end of the spectrum. One in eight Americans now lives below the poverty line. People who lost jobs that paid living wages are now accepting casualised, temporary, rock-bottom work. The unregulated market cannot create enough jobs that pay enough to take people out of poverty or to create growth-stimulating demand.
The global market will continue to siphon money from where it is useful for buying real goods and services to where it is hoarded in the financial sector. The HSBC banking group is the latest to provoke incredulity with its £5,2-billion half-year profits — more than a billion over the expectations of even the City of London.
The announcement was accompanied with another — that 3 500 of HSBC’s British employees would be made redundant, adding to the 4 000 jobs outsourced last year to the Far East.
Rebutting the suggestion that the bank is overcharging customers, a spokesperson said only 22% of profits came from the United Kingdom, although it accounted for 30% of jobs. Hence the redundancies — to ensure the UK pulls its weight in the profit stakes.
Realistic economists everywhere are thinking out of the box about how to get effective buying power back to where it serves people by giving them livelihoods.
Once we have accepted that conventional jobs are not the solution, we have to think radically.
If large enterprise cuts prices but gobbles small enterprise and livelihoods, should we go for size? If open exchanges let more capital out than they bring in, are they sacrosanct?
If agribusiness raises yields of crops sold globally but destroys small farmers, local economies and biodiversity, is it self-evident that yields come first? What is efficient in the longer term?
Margaret Legum chairs the board of South African New Economics