According to a Star article on 27 November 2003 the government, business, labour and the community made numerous pledges at the Job Summit in June this year. Between the parties, they pledged to:
➢ Expand public investment initiatives by 15 percent a year for the next three years. The report did not contain explanations as to where the government will obtain the tax revenue to finance this huge increase in public investment in an economy that is not growing and in which massive unemployment is severely retarding the spending power necessary to boost tax revenue.
➢ Build an expanded public works programme. Again, where will the tax revenue come from for purposes of building this programme to the levels necessary to make a dent in unemployment?
➢ Boost learnerships to 72000 by May 2004. While this will develop skills it will only mean 72000 more skilled people looking for jobs that are not there.
➢ Spend R145 billion on new private sector capital investments over the next few years.
➢ Promote small business development.
➢ Promote the proudly South African Campaign. A laudable goal that will sensitise South Africans to the importance of creating jobs in South Africa. However, most South Africans are unable to respond to this call because dire economic circumstances make price their first priority.
➢ Develop enabling legislation and support programmes for co-operatives. If co-operatives can be empowered to grow they could well absorb some currently unemployed people. But the co-operatives’ competitors will then lose business and employees to the co-operatives.
Since this summit 10 years ago there have been numerous talks on job creation accompanied by ‘changes’ in the government’s economic strategy. None of this has done anything to create jobs. It has therefore been ten precious years wasted while the unemployment situation worsens.
The Business Times of 22 September 2013 reports that employment in the manufacturing sector is at its lowest in 42 years.
While there is no harm in the initiatives that the government keeps talking about none of these can realistically solve the unemployment problem.
There are a number of major reasons for my criticism of the job creation process:
➢ As proved by the miserable failure of previous summits, jobs cannot be created by talks
➢ Jobs cannot be created in an economy that is not growing at a significant rate. And accelerated economic growth cannot occur without new money being injected into it. That is, where the same money is merely going around in circles it cannot grow.
➢ For numerous reasons more and more South African companies are exporting jobs by buying imports in order to avoid hiring local labour and also in order to exploit vastly superior labour economies overseas and in Africa.
➢ The thousands of billions of dollars, pounds, yen and marks that South Africa needs in order to grow its economy and create jobs will come from one source only. That being massive international investment in labour intensive projects.
➢ Such potential investment is definitely out there. But it will not be attracted by the projects pledged at the job summit and the new growth policies that the government keeps talking about. It will also not be brought in via so-called counter trade deals linked to the severely discredited arms deal.
No pledges, promises, summits or talk shops will solve our growing unemployment problem. This is because we have thirty to forty percent unemployment in addition to countless employed people who are earning next to nothing. Ours is therefore not a minor glitch correctable by superficial means. We have a huge national crisis that will be resolved only by making South Africa friendly to international investors. Our government has failed miserably in this area.
All private stakeholders therefore need to concentrate their efforts on pressuring the government to get rid of the crime and the investor unfriendly legislation that is deterring international investors. The government must double its investment in crime prevention, halt jail releases and escapes, and rethink its grossly stifling and employer-unfriendly labour law amendments. Without this, international investment will continue to be conspicuous by its absence and our unemployment crisis will continue to grow.
Written by Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za. This article first appeared in The Star.
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