With a million jobs lost to date this year, business (Bobby Godsell) and labour (Zwelinzima Vavi) have called on their constituents to consider wage freezes, salary cuts, lower management bonuses and pared board expenses to keep as many people employed as possible.
Government, meanwhile, is implementing its own measures, including expanding public works programmes and assisting distressed companies.
Ebrahim Patel’s ministry of economic planning says about 20 000 jobs have been saved or created through four programmes set up under the umbrella of what is called the framework agreement. These include a training scheme, interventions by the CCMA, tougher action by the customs authorities and a distressed lending programme from the Industrial Development Corporation.
A further 223 000 jobs were created through an acceleration of the expanded public works programme, with the ministry saying it is on track to add another 100 000. But, given South Africa’s alarmingly high unemployment rate, interventions such as the public works programme should probably run continually, irrespective of whether the economy is expanding or contracting. And government’s framework plan smacks of a continuing focus on centralised, top-down planning rather than freeing up the economy so that people can get on with the job of earning their own living.
We see this in two sets of data. One is a study by economists from the university of Pretoria and Unisa which shows that only 48% of the basket of items which Stats SA uses to calculate consumer inflation is influenced by interest rates. The rest is determined by rigidities, economist-speak for the ability of powerful market players, including the government, to determine prices.
An example is the motor industry where some manufacturers have managed to put up car prices even while demand has fallen through the floor.
The motor sector is not an isolated example. Scratch almost every sector of the economy and the same picture emerges.
And where the private sector is not using its muscle or its cartel power to set prices, the government takes over. Regulation, either through preventing competition or in the form of administered prices, adds inefficiency.
Then, for good measure, there are the parastatals that help to suck the economy dry. The inefficiencies on which our economy is built are also at least partially reflected in the gap between producer and consumer prices. This is the difference between prices at the farm or factory gate on the one hand and what the consumer pays on the other.
Producer inflation is decreasing by 3.3% annually, while consumer inflation increases by 5,9% annually.
High inflation means high interest rates, which add to the cost of everything, whether it is running a household, a business or an arm of government.
Vavi and Godsell announced the suggested voluntary restraints as co-chairs of the Millennium Labour Council, a body set up in 2 000 to analyse and tackle the causes of unemployment. With unemployment at 24,5% it appears that the council has not been up to the job, but it does sound as if there is a new spirit of determination in business and labour.
Where, then, is government, which must take primary responsibility for South Africa’s high rate of unemployment? After all, it is government that has failed to encourage competition sufficiently in the economy.
It is all very well to have framework agreements, distressed-sector plans, public works programmes and voluntary restraints, but none of these hides the fact that South Africa is not working.
Whose rights are they, anyway?
When Lawrence Mushwana was public protector he famously declared that Jacob Zuma’s rights had been violated in the course of the investigation into corruption allegations against him. Perhaps that is why the president gave him his new job as chairperson of the South African Human Rights Commission.
He is certainly getting stuck into his work in characteristic style. As we report this week, the chief executive of the commission is to quit because Mushwana has stripped him of all meaningful authority and made it impossible for him to stay. If this feels like déjà vu, it is.
Exactly two months ago, when he had one foot out of the door, Mushwana suspended the chief executive at the public protector because he had had the temerity to question aspects of Mushwana’s ludicrous R7-million exit package. And that was just the final act in an epic series of battles between Mushwana and his senior staff.
We are pleased to report this week that the inconvenient executive in question has been reinstated following a finding that there were no grounds for his suspension. Frankly, we did not need much convincing that Mushwana was the wrong man for this crucial job.
During his time at the public protector his principal concern seems to have been to protect the elite from the public, rather than the other way around, consistently finding in favour of government ministers and avoiding hard questions about the governing party. Indeed, after the Mail & Guardian took him to court for his half-baked work on the Oilgate scandal a court of law found that Mushwana had failed to understand the mandate of his office.
The South Africa we have inhabited since 1994 is founded on principles of human rights, yet we are far from a common understanding of the centrality of rights to our new dispensation. The commission should play a crucial role in fostering that commonality.
Mushwana, at once arrogant and servile, cushioned by his golden handshake, is highly unlikely to achieve anything of the kind, and Parliament, which was complicit in his appointment, can make amends by shining a hard bright light on him until he learns his job, or decides to quit of his own accord.