The opening paragraph of Statistics SA’s quarterly report on employment give a clear warning of the colossal crisis which is sweeping over the country:
“With South Africa formally in recession and hoping for some good news, the latest employment figures released by Statistics South Africa (Stats SA) holds no reprieve. According to the March 2017 Quarterly Employment Survey (QES), an estimated 9 644 000 persons were employed in the formal non-agricultural sector of the South African economy. This reflected a net quarterly decrease of 48 000 employees between December 2016 and March 2017.”
“It therefore comes as no surprise that there is also a quarterly decrease of R19.4 billion or 3.2% in total earnings paid to employees. Total earnings paid to employees amounted to R588 billion in March 2017, down from R607 billion in December 2016”
These words confirm everything that the South African Federation of Trade Unions (SAFTU) has been saying about the grim prospects for the country, especially the workers and the poor.
What does these figures tell us?
In South Africa the numbers of people who depend on the meagre wages of workers has been increasing alongside the increase in the numbers of the unemployed. It is estimated that a single worker now supports up to 12 members of the family. 48 000 must therefore be multiplied by 12 to appreciate the full extent of the devastation.
The decline of employee earnings from R607 billion in December 2017 to R588 billion means R19.4 billion is no longer circulating in the economy. This money was buying food, electricity, water, stoves, kettles, television, furniture, etc. The factories that were producing these goods must now reduce their production and employment. This will lead to an unending vicious circle of more unemployment and lower levels of growth.
More worryingly the share of wages to the GDP has continued to decline since 1991. The share of wages dropped from 57% in 1991 to way below 50% throughout the 23 years of so-called democracy. These losses of earnings exacerbate what is also already a major crisis. In the face of more profit margins and runaway executive pay it translate to South Africa getting even more unequal.
These figures tell us the story so familiar in our country for 23 years now, which is that triple crisis of poverty, unemployment and inequalities is getting worse. The rich are getting richer and the poor are getting poorer.
Decreases in employment were highest in the trade sector with 32 000 employees, the business service industry with 23 000 employees, the community service industry with 8 000 employees, the manufacturing industry with 4 000 employees and the transport industry with 1 000 employees.
The only slightly better news is that there were increases in employment in the construction industry with 12 000 employees and in the mining industry with 8 000 employees.
While any new jobs are welcome, the increase in construction may well only reflect the numerous glass towers of office blocks and luxury flats in areas like Sandton, which will not create permanent employment opportunities in a shrinking economy.
The areas in which the jobs are disappearing, particularly trade and manufacturing, provides further evidence of not a short dip in employment but a steady and catastrophic decline which has taken the official unemployment rate in the first quarter of 2017 to 27.7%, the highest for 14 years, while the higher but more realistic expanded rate was 36.4%.
For years trade unionists have been warning that the underlying cause of the country’s economic decline has been the over-dependence on the export of minerals and other raw materials, coupled with the failure to beneficiate those resources and grow manufacturing industry. That decline has now become a disaster.
It is a disaster presided over by an ANC led Alliance government which has repeatedly ignored our warnings and has made the crisis even worse by adopting economic policies which have made this problem even worse, by relying on a capitalist free market and neoliberal policies like GEAR and the National Development Plan.
It allowed resources to be shipped out of the country and it reduced tariffs, which enabled the products manufactured from those raw materials to be imported back into South Africa, causing more local manufacturing jobs to be lost.
Yet now, 23 years too late, these same ANC leaders, particularly those tainted with allegations of corruption and looting, have suddenly started to talk about radical economic transformation and the need to implement the Freedom Charter.
It is just empty phrase-mongering, used by competing factions to make themselves sound more radical than the other. Even while they talk about a change of direction, in practice they are changing nothing. The economy is still firmly in the hands of the same colonial, white monopoly capitalist class whose power and wealth has grown even faster under the years of ANC Alliance misrule.
This in turn creates the impression that people who mouth these hollow words about ‘white monopoly capital’ and ‘radical economic transformation’ are not serious but only want changes which will open up even more scope for looting of the country’s wealth through the manipulation of tense and contracts.
This perception makes it easier for the enemies of real change in big business to go on an ideological offensive to discredit and attack the absolute legitimate demands for radical change.
These real white monopoly capitalists cynically claim to be defending the country from a group of kleptocratic crony capitalists who want to ‘capture the state’ which in reality they themselves captured in the years of colonialism and apartheid and which remains firmly in their hands.
SAFTU is determined to reinstate the real program for radical economic transformation and mobilise mass support for it, based on the call of the Freedom Charter that “there shall be jobs and security” for all.
Only by the democratic nationalization of the mines, banks (including the Reserve bank) and monopoly industries can we end the job-loss bloodbath, create jobs and security for all and liberate the workers and the poor from the exploitation of the white monopoly capitalist elite.
SAFTU has already submitted a Section 77 notice at Nedlac to demand a clear plan from government that the direction we are in will be changed. We are demanding a new growth path to change the structure of the economy and ensure redistribution of wealth, land, and opportunity for all. We have demanded that the crisis in the education system be fully addressed.
We are mobilising for a full-blown strike in November if government maintains the status quo whilst mouthing hot air about radical economic transformation.