New approach needed to improve SA’s labour-absorption potential

27th November 2009 By: Terence Creamer - Creamer Media Editor

There is no disputing that chronically high unemployment and deteriorating income inequality are South Africa’s two most pressing challenges. There is also no disputing that government’s Expanded Public Works Programme (EPWP), while an important stopgap, is simply inadequate to deal with these twin challenges and that a far more fundamental job-creation strategy is required.

In a recent Business Day piece, under the headline ‘Turning work opportunities into proper jobs’, columnist Hilary Joffe argued that while it is widely accepted that a more “labour-absorbing growth path” is required, there are still too few “concrete proposals”.

Policy options, she wrote, needed to be properly detailed and the trade-offs explored, and suggested that this task should fall to South Africa’s Economic Development Minister, Ebrahim Patel.

Dovetailing somewhat neatly with that suggestion was an input given by Murray & Roberts CEO Brian Bruce earlier this month.

Speaking at the National Business Initiative’s annual report-back to members and stakeholders, Bruce argued that a mind shift was required with regard to the issue of labour intensity, especially within the South African construction sector.

He said that public infrastructure continued to be designed on a “machine- oriented basis”.

“The public sector has not yet got its mind around insisting that its professional service providers should design infrastructure in a way that enhances job opportunities,” Bruce argued.

He has personally witnessed freeways being built by hand in countries such as Thailand and “yet, in South Africa, we insist that machines are the order of the day”.

The shift from social to economic infra-structure likely further exacerbated this trend in provinces such as Gauteng, owing to the fact that roads projects, for example, were far less labour-based than housing developments.

“A lot of change needs to take place between clients, professional teams and contractors,” Bruce averred.

The Murray & Roberts CEO’s input is somewhat ironic, given that it should be up to government, not a leader of a construction company, to make the case for a more labour-intensive approach to infrastructure delivery.

But it also implies that business is becoming increasingly concerned about the long-term implications of South Africa’s current unemployment crisis – a crisis that has deepened during the recent recession.

Indeed, Statistics South Africa figures showed that a cumulative 959 000 jobs were shed across the country between January and September, while Finance Minister Pravin Gordhan warned in the Medium-Term Budget Policy Statement that the labour market was likely to remain weak over the medium term, owing to slow recovery in the economy and upward pressure on wages.

There is also rising discomfort with the inequality numbers, with research conducted by University of Cape Town economics professor Haroon Bhorat showing that South Africa is now officially “the most unequal society in the world”.

Surely, therefore, it is time for a comprehensive jobs plan, with employment targets, and for fresh dialogue between government, business and the rest of civil society to tackle this serious scourge to this country’s present and future.

This should not go the way of the Jobs Summit talk shop, but should instead be weaved into the very fabric of public-sector delivery, and, eventually, even into private-sector business planning.

No obvious solution is ever simple. But one area where South Africa could make serious jobs progress is the production of solar water heating technology and the deployment thereof.

Just imagine what it could mean for material producers and system manufacturers if it were mandatory for every new house in every new human settlement to include a water heater. Imagine how many new plumbers and electricians would be required if it then became mandatory for every house in every suburb and every township to do likewise.

Then there is the aspect of street lighting.

At the recent 2009 Eskom eta Awards, a company called Light Kinetics was named the residential category winner for its efficient alternative to traditional streetlights.

The company has introduced light-emitting diode luminaires to certain areas within the Tshwane municipality, reducing energy consumption by a massive 90% in the process.

Now, if every municipality in every province were to be compelled, and financially supported, to retrofit or install similar systems, the employment and energy savings potential could be significant.

But such a jobs rethink is going to require leadership.

True, Public Works Minister Geoff Doidge has done a laudable job in helping to facilitate job opportunities under the stopgap EPWP. He announced earlier this month that a total of 223 568 work opportunities had been created between April and August and gave the assurance that 500 000 work opportunities would be created by the end of 2009. The figures provided a “solid foundation” for the creation 4,5-million work opportunities for poor and unemployed people by 2014.

But we also need a champion of permanent jobs, a leader who should build a cadre of jobs champions across government and, ultimately, within the private sector.

Just look at how companies have developed internal climate-change champions. Couldn’t the same be done in the area of employment creation?