The government’s Unemployment Insurance Fund (UIF) paid out over R2,1-billion last year to 500 000 unemployed people, but has little grasp of the skills challenges the country faces.
The now self-funding UIF uses a database to match the skills of unemployed people with those of vacancies but does little or no follow-up.
President Thabo Mbeki has identified the growing skills shortage as one of the key growth constraints the country faces as it seeks to move to a higher growth trajectory of at least 6% a year.
Pan African Advisory Council CEO, Iraj Abedian, who has been monitoring the South African skills gap for the past three years, estimates the gap at 500 000 workers.
Abedian says it is difficult to calculate whether the skills gap is decreasing or increasing but the fact that economic growth is rising would suggest that there would be pressure for more skilled workers.
UIF figures show 5,7-million employees employed by 427 000 employers on their database for the 2004 financial year.
Department statistics show that an average of 7,6-million workers employed by 366 000 employers made contributions during the 2005 financial year.
The UIF’s total revenues for the 2004 year were R4-billion, comprising R3,6-billion derived from contributions and R500-million from investment income.
The R2,1-billion in payments were paid out to 393 000 unemployed workers, 61 000 mothers on maternity leave, 23 000 workers for illness related unemployment and 20 000 dependants.
Payments made to the 500 000 unemployed people the same year averaged R4 200 per claimant.
The UIF’s database matches unemployed people with jobs vacancies, but there is no follow-up to determine how long it takes to get a new job and how many people remain unemployed after their unemployment benefits run out.
UIF spokesperson Kgomotso Sebetso agrees that an estimate would be more useful than having no indications, but the main problem is that not all workers are registered with the UIF. “It is difficult to use the database to work out the rate of unemployment in the country for this reason,” says Sebetso.
UIF claims are self-funded out of a worker’s account where credit is built up during a period of employment through monthly contributions which vary. UIF payouts vary between 38% and 58% of the worker’s salary for high-earners and low-learners respectively.
Sebetso says: “With UIF, as you work you accumulate credit, for every six days you work you accumulate one day of credit.” The maximum UIF credit that can be accumulated by a worker is 238 days, which would be achieved after four years of working for the same employer.
A visit to the UIF queue at the Johannesburg Department of Labour Office on Rissik Street by the Mail & Guardian found workers with highly sought-after skills including electricians, clerks, turners, grinders, welders, carpenters and sales assistants.
Some of these skills were highlighted in a recent report titled Employment trends in South Africa, which noted the supply and demand for skilled labour as being in high.
The report, which was prepared for trade union Solidarity by JCP International, claims the main skills shortage is at the intermediate level and highlights a shortage of artisans such as fitters, plumbers, welders, turners and electricians that has existed for many years.
The report singles out the increase in business graduates from technikons at the expense of technical and science graduates and a marked decline in apprentices during the 80s and 90s as key factors in this skills gap.
The author of the report, Frank Karg, says the problem with the unemployed intermediate-skilled worker is one of “competency”.
“They have the basic skills and not the intermediate skills that make them craftsmen,” said Karg.
Senior executive manager of communications at the Department of Labour, Page Boikanyo, says training is one of the department’s priorities and is implemented through the National Skills Development strategy (NSDS).
“Apart from the R700-million spent on skills training of approximately 400 000 uemployed between 1999 and 2004, we have invested R21,9-billion from the skills development levy for allocation into NSDS 2005 to 2010,” says Boikanyo.
Seeking a job
Johannes Mwali lost his job as an electrician in 1990 and claims that he has been receiving UIF for 15 years. “I attempted to start my own company repairing everyday appliances but I could not find enough work,” says Mwali.
Joseph Duma is another electrician who says he can’t find work. He was employed at AC Electrical in Eastgate until December 2004 and has been claiming UIF since February this year.
Duncan Murse was employed as a toolmaker until he lost his job in November last year. “I have skills in turning, grinding, and milling but since I have been looking for work I have found nothing,” he says. He has been receiving UIF for 3 months.
Lordwill Thobejane used to work in construction as a labourer but has been unemployed since April 2005 when he lost his job at a Group 5 building company. He says he has skills as a carpenter and as a welder but has not managed to find a job.
Patrick Kwenane was working at Tornado Spoiler until September 2004 manufacturing spoilers and bumpers. He has been claiming UIF for eight months now and says he has tried to open his own workshop but there was no business.
Charlotte Mashigo lost her job as a data capturer at Metrofile last week and was busy registering for UIF payments. She said she had been looking for work as a data capturer, stock controller, invoice clerk and a debtor’s clerk. — Lloyd Gedye