Job losses in South Africa could reach the two million mark by the end of 2010, economists have warned. Recent Stats SA figures indicate that almost a million jobs have been lost this year, partly because of the global economic crisis. Its third-quarter employment survey, scheduled to be released in two weeks, is expected to confirm a continuing downward trend.
Despite the recent GDP turnaround several leading economists expressed pessimism about job growth in the next 12 months.
Stats SA’s labour force survey, released on October 29, showed that 484 000 jobs were lost between July and September, narrowly exceeding the 475 000 jobs shed in the first six months of the year.
The hardest-hit sectors include manufacturing, which shed more than 150 000 jobs; trade, including retail (350 000); construction (80 000) and agriculture (57 000).
Officially, the jobless tally rose from 4,1-million in June to almost 4,2-million in September, taking the official unemployment rate to 24,5%. This excludes more than a million workers too discouraged to continue seeking employment, said National Labour and Economic Development Institute senior researcher Kimani Ndungu.
Commission for Conciliation, Mediation and Arbitration spokesperson Lusanda Myoli said 399 retrenchment notices had been lodged with the commission this year, compared with 202 in 2008.
T-Sec chief economist Mike Schussler said that although there were signs of economic recovery full recovery would occur only in the third quarter of next year and ”would not be brilliant”.
But Hugo Pienaar, senior economist at the Bureau for Economic Research, predicted that the third- quarter survey would reflect worsening employment conditions.
”The fact that the economy has shown signs of recovery will not have an immediate impact on job growth. We’re still going to see a high rate of job losses for the next couple of quarters,” Pienaar warned.
Ndungu said the community and social services shed more than 37 000 jobs this year, indicating that the public service was not creating jobs. He said President Jacob Zuma’s pledge, in his June State of the Nation address, to create 500 000 jobs by year-end appeared to be ”a fading wish”.
”The data paints a completely different scenario — of an effective jobs blood bath. It can only get worse before it gets better.”
Zuma’s prediction was based on the job-creation measures agreed between labour, government and business in the framework of South Africa’s response to the international crisis. This targets the Expanded Public Works Programme to create two million jobs, or about 500 000 jobs every year, by 2014.
”Unfortunately, South Africa lags [behind] developed economies and predictions are that it is likely to come out of recession only from about the second half of 2010. This means that, for the foreseeable future at least, jobs will continue to be shed at an alarming rate. The earliest we are likely to see a real reversal is 2011,” said Ndungu.
Miriam Altman, executive director of the centre for poverty, employment and growth at the Human Sciences Research Council, said that unless extraordinary measures were taken to support manufacturing and retail, job growth would remain a pipe dream.
”A lot of things need improving. The net losses in manufacturing and retail are worrying — they aren’t what other countries are experiencing.”
Altman said the public service could not create more jobs because the government had used a large chunk of its budget to pay for public service salary adjustments this year.
In addition Finance Minister Pravin Gordhan’s budget was inadequate to cater for job creation.