1.1 Putting South Africa on a developmental and employment-absorbing growth path is a long-term challenge which we will need to tackle together, with a shared vision.

1.2 The whole thrust and mandate of the Government is to achieve this objective. Policy, programmes and their implementation must be taking us toward this goal. So important and fundamental is this goal that it is necessary to continuously assess whether we are moving toward it.

1.3 The new democratic government has had four years to formulate and implement its policies. To reshape and restructure the economy that we inherited and to ensure that there is job creation is not a task that we can achieve overnight. Yet the fact that not enough jobs are being created at this stage and that this is the perception and experience of ordinary people is cause to reflect and to act.

1.4 The purpose of this document is to undertake such a reflection and to propose a concrete programme to boost employment growth during the structural transition that is taking place. Much of this programme involves the more efficient implementation and co-ordination of existing programmes. However, it also proposes that we identify areas that are inhibiting job creation, that a number of new programmes be started, that all social partners make significant contributions and that all available resources are efficiently applied.

1.5 While we have had many successes in transforming our economy and in improving delivery, unemployment remains the key concern. There is a critical need to boost the long term labour absorptive capacity of the economy. We need to reduce the dislocation caused by structural change, eliminate the institutional impediments to employment creation and hasten the process toward a sustainable, inclusive, labour-absorbing growth trajectory. The key objective of the Employment Strategy Framework (ESF) is to boost employment growth in the short to medium term and to do this in a manner that will strengthen the likelihood of success in achieving the longer term goals.

1.6 Unemployment is not a problem created recently. It is a result of previous political and economic policies that led to inadequate attention to human capital development, a prolonged deterioration in the real growth rate, rising capital intensity of production and declines in savings and investment since the 1970s. With the demise of the apartheid system and greater urbanisation, the problem of unemployment has become more serious and more visible.

1.7 Unemployment, using the international (‘narrow’) definition, currently stands at about 20%. However, we recognise that many of our people have been out of work for so long that they have stopped looking. Unemployment stands at about 29% if the ‘broad’ definition is used, which includes these discouraged workers. The economy must generate about 250 000 new jobs in net terms, simply to ensure that the unemployment rate does not rise. To absorb new entrants into the labour market the economy should generate more than 350 000 net new jobs per annum. Far more must be generated if we are to seriously reduce the unemployment rate and eat into the backlog of jobless South Africans which apartheid left us.

1.8 Unemployment, by whatever measure, is unacceptably high. The poorest households are those where no-one or only one family member works. A job gives a person, not only income, but self-respect. A job gives a person the opportunity to contribute to the productive growth of our nation. As a nation our central challenge is to create jobs, especially sustainable and productive ones. We need to get South Africans working.

2.1 In the context of high and persistent unemployment, it is clear that we need an Employment Strategy Framework which gives overall direction on the way forward. Since it will take some time to erode the unemployment problem, this Framework must guide us through the short, medium and long term.

2.2 In the short run, we seek to directly and indirectly promote the creation of sufficient numbers of jobs to match net growth in the labour force. We seek to expand the Special Employment Programmes to raise the level of job creation as quickly as possible. Even where these are short term employment generators, they will focus on building important community assets and reinforcing programmes, aimed at generating longer-term economic opportunities. A number of sectorally-focused initiatives will be pursued, where there could be quick but sustainable employment creation, as in services such as tourism, and in certain goods destined for the local market.

2.3 In the medium-to-long term we seek to fundamentally propel the economy into one which is innovative, inclusive and labour absorbing. Overall, we will need to raise the skills base and move into higher value-added sectors to raise national income, enable a more stable exchange rate and to better reflect our underlying cost structure. We will need to ensure a sustainable job creating path, where net job creation exceeds labour force entry. This trajectory will require:

2.3.1 increases in the labour absorptive capacity of the economy – by expanding the creation of sustainable formal sector employment through the identification and promotion of higher value added, more labour using industries, with strong employment multiplier potential; and improving access for small business to economic opportunities;

2.3.2 improved functioning of labour markets, with an emphasis on geographic and occupational mobility, greater adaptability to changing circumstances, reduced occupational discrimination and improved absorption of new entrants;

2.3.3 vastly improved education and training levels and improved secondary and tertiary education responses to labour market needs;

2.3.4 improved and more cost-efficient systems of social security and better and more accessible social services;

2.3.5 tangible improvements in addressing effects of relevant forms of crime and developing stable communities;

2.3.6 the creation of a more efficient, adaptable and proactive public service.

3.1 Our policies aim at the development of a labour absorbing economy that relies on sustainable employment opportunities in the production of higher value-added goods and services. Overall, a critical minimum package of mutually reinforcing policies is required to lead us to a sustainable dynamic growth path. The Employment Strategy Framework aims to improve both the demand for, and the employability of, labour. Both demand and supply side policies will be constructed so that they are more closely linked and are mutually reinforcing. A combination of short term and long term measures will be implemented. We must move to a longer term developmental trajectory and yet we fully recognise that people need jobs now.

3.2 To increase the demand for labour, emphasis will be placed on raising both output and the labour absorption capacity of the economy by:

3.2.1 creating jobs directly through the strengthening of Special Employment Programmes, with more financial resources, better co-ordination, more regular flow of income and more emphasis on the building of sustainable assets. The key programmes will include the Municipal Infrastructure Programme, Working for Water and Community Based Public Works Programmes. Two new programmes will be introduced: the Clean Cities Campaign and the Land Care Campaign.

3.2.2 preserving jobs in the private sector by means of:

• 3.2.2.1 programmes to enable existing firms to shift into higher value added, more competitive product niches and to adopt more competitive methods of work organisation.
• 3.2.2.2 targeted interventions in mining, agriculture, construction, and vulnerable sectors in manufacturing such as motors, clothing and textiles, footwear and the petrochemical-plastics pipeline.
• 3.2.3 strengthening and refocussing some of the existing investment promotion policies and programmes. Some programmes have only recently been introduced, but have already begun to show results. However, some of these programmes will be under review in the coming year including the Manufacturing Development Programme(MDP), a range of SMME support services and key aspects of the National Crime Prevention Strategy.

3.2.4 fast-tracking movement into new labour absorbing industries by:

• 3.2.4.1 improving attention to the promotion of ‘non-tradeables’ and service industries
• 3.2.4.2 supporting the identification and promotion of key labour absorbing industries, in agriculture, manufacturing and services
• 3.2.4.3 promoting cluster initiatives which enable the identification of industry strategy initiatives, particularly in services
• 3.2.4.4 promoting innovation in technology use and work practices
• 3.2.4.5 leveraging investment into the South African economy through the Industrial Participation Programme
• 3.2.4.6 reducing the cost of investing in productive activities with the MDP, the SDIs and the IDZs, restructuring commercial transport services and addressing key areas of crime.

3.2.5 promoting SMMEs by:

• 3.2.5.1 establishing local business service centres, which will be electronically integrated
• 3.2.5.2 strengthening delivery in the financial services sector, particularly in the lower end of the market
• 3.2.5.3 intensifying land reform and extension services
• 3.2.5.4 strengthening the implementation of local economic development and local programme delivery

3.3 To strengthen the employability of labour, our policy focuses on education and training, improving the functioning of the labour market and devoting special attention to vulnerable groups. A strong package of ‘active labour market policies’ will be introduced to strengthen labour market matching and the skills base. We aim to:

3.3.1 Strengthen the availability of skills by:

• 3.3.1.1 enabling easier access to work for non-South African skilled personnel
• 3.3.1.2 transforming the training boards system into SETAs and supporting a substantial increase in private sector expenditure on training
• 3.3.1.3 augmenting skills and infrastructural development through the Infrastructure and Employment Investment Programme
• 3.3.1.4 improving the interface between labour market needs and the education system
• 3.3.1.5 improving the allocation of resources in education and introducing the new curricula

3.3.2 Improve the functioning of the labour market by:

• 3.3.2.1 revising labour regulation, in consultation with the Social Partners, to improve criteria relating to the extension of bargaining council agreements, to loosen provisions related to probation and to reduce the load carried by the CCMA while increasing its preventative role
• 3.3.2.2 establishing a national network of Labour Market Information and Careers Services Centres to guide workseekers towards jobs
• 3.3.2.3 formulating a more comprehensive social security and welfare safety net
• 3.3.2.4 enabling adjustment through Social Plan activities including the establishment of the Social Plan Technical Support Facility provision of retrenchment services and local support to economic development.
• 3.3.2.5 improving coordination in the planning of housing schemes and the provision of low cost transport services

3.3.3 Vulnerable groups will receive special attention, by:

• 3.3.3.1 reducing direct and indirect discrimination against women in the labour market by improving access to child care services, accommodation in areas of economic agglomeration, skilling opportunities and occupations not normally considered to be ‘women’s work’.
• 3.3.3.2 promoting youth employment and skills development with the consideration of a youth learnership wage, a youth training subsidy, measures to avoid the displacement of existing workers when new young employees are taken on, improved careers services in schools, internships, and improved vocational training.
• 3.3.3.3 enabling the optimal development of the disabled, by first establishing their social security needs and promoting their integration into the mainstream economy.

3.4 To fulfill the aims of the Employment Strategy it is essential that improvements in public service delivery be achieved. The reallocation of expenditure and of personnel to areas that add social value will require the introduction of more adaptable employment practices and an affordable number of public servants.

3.5 In all relevant aspects of policy, attention will be devoted to improving delivery at the local level and improving coordination in infrastructural, educational and investment promotion activities so that they can be mutually reinforcing in enabling growth and employment absorption.

3.6 To provide a vehicle for fiscal support of innovative programmes aimed at stimulating employment and development opportunities for young people, we will establish the Umsobomvu Trust, to be capitalised initially from a charge on demutualisation. These initiatives may receive further support from the Budget.

3.7 A Cabinet Employment Cluster Committee will be established, to be chaired by the Minister of Labour. This cluster will ensure that government’s Employment Strategy commitments are implemented. It will oversee a review of the employment impact of key policy areas, enforce improved policy coordination and monitor progress on key programme commitments.

3.8 We recognise that human and financial resources are limited. We therefore challenge the Social Partners to join us in making this workplan.

4.1 We recognise the contribution made by Business to social development, in the promotion of corporate social responsibility and the contribution to the National Skills Fund. We further challenge business to make a meaningful contribution to employment promotion through demonstrable and tangible commitments to:

• 4.1.1 funding partnerships in support of the programmes of the Umsobomvu Trust and other employment generating initiatives
• 4.1.2 promoting youth learnership and employment
• 4.1.3 facilitating small business entry into the economic mainstream
• 4.1.4 enabling progressive workplace change
• 4.1.5 helping reduce conflict on the shop-floor
• 4.1.6 building capacity at the local level by establishing a nation-wide "Managers Service Programme". Skilled professionals would volunteer their time to assist in the development of capacity in local and provincial government financial management, the development of Local Business Service Centres, the Social Plan Technical Support Facility, schools management and upgrading and public works projects
• 4.1.7 promoting education and training with a "Schools Adoption Programme", which would systematically finance the upgrading of schools and the purchase of books and materials.

5.1 We recognise the contribution made by Labour to social development and democratisation. We further challenge labour to make a meaningful contribution to employment promotion through demonstrable and tangible commitments to:

• 5.1.1 contributing to the Umsobomvu Fund
• 5.1.2 making it easier for young people to enter employment
• 5.1.3 wage bargaining appropriate to productivity gains and rates of inflation and which does not contribute to job loss
• 5.1.4 developing a realistic labour regulation framework, which enables the restructuring required in both the public and private sectors and supports an environment for employment creation
• 5.1.5 helping reduce conflict on the shop-floor.