/ 11 March 2013

Productivity drops to 50-year low in SA

Gold Fields has announced the creation of Sibanye Gold Limited
Gold Fields has announced the creation of Sibanye Gold Limited

Employment figures were just one-hundredth of a percent up, with an increase in informal jobs and a decrease in jobs in the formal sector.

The mining and construction sectors reported losses, while improvements were seen in transport and manufacturing.

Mine labour came under heavy scrutiny in recents months, with the killing of 44 people at Lonmin's Marikana  after labour unrest at Lonmin's mine, as well as Anglo American Platinum's announcement that it intended to close two of its shafts in Rustenburg and shed about 14 000 jobs. 

The 12 000 news jobs in the management and professional categories showed that high-skilled jobs created the most employment in February.

Labour’s participation in national income, or wage share, fell to the lowest level in 50 years.

“Wages are the remuneration received by labour; profits and other income is the remuneration received by capital. The implication of the dropped wage share was that South Africa’s profit share rose to a 50-year high,” Adcorp labour economist Loane Sharp said.

According to Sharp, this trend could be attributed to South African companies being in exceptionally good shape. South Africa has the highest real risk-adjusted return on capital in the world at 10%, a recent survey has shown.

On the drastic drop in wages' share of national income, Loane attributed declining labour productivity. “Since records were first started in 1967, South Africa’s labour productivity had fallen to a 46-year low, with most of the decline occurring since 1995.”

Sharp said that radical changes in labour laws since the Labour Relations Act of 1995 presented enormous challenges in terms of dismissal protections and wage escalations.