THE POST NATIONAL EXECUTIVE COMMITTEE STATEMENT
March 27, 2022
SAFTU CONCERNED WITH THE SENTENCING OF MISS SIBONGILE MANI
April 1, 2022

THE UNEMPLOYMENT CRISIS CONTINUES TO WORSEN:

Quarterly Labour Force Survey 2022

The Quarterly Labour Force Survey (QLFS) for quarter 4 of 2021 has been released. The statistics shows that the so called official unemployment rate grew by 0.4%, taking the official statistics from 34.9% in the third quarter to 35.3% in the fourth quarter of 2021. The number of the officially unemployment people is 7.92 million, but when we include those who have given up looking for jobs, the total number of unemployed people is 12.4 million.

Unemployment is still above 50% among women, 77% amongst the youth between the ages of 15 – 24 years and just a little over 50% among black people. Between December 2020 and December 2021, the overall expanded unemployment rate worsened, from 42.6% to 46.6%. That is a net increase of 4% in just 12 months; while GDP was up 4.9%.

Unemployment and capitalism

The delinking of capitalist profitability and economic growth from the mass of our society’s basic needs has never been more blatant. No other industrialised economy has such a low rate of labour absorption. South African capitalism is clearly our society’s enemy, as profits rose during 2021 while jobs and living standards of the vast majority fell.

South African capitalism has demonstrated for over a decade now, that it is not able to create jobs for the majority of working-class people. The net job losses of 16 000 – amid an increasing number (0.4%) of the working age population – means the economy is shedding jobs whilst simultaneously failing to create new jobs for those entering the labour force.

This raises the critical question: why is capitalism failing to create jobs in South Africa?

Firstly, local capitalism is failing because cheap labour is in the DNA of South African capitalism dating to the eras of slavery and colonial dispossession, and high unemployment rates plus class war on our trade union movement are the current ways to lower labour costs. In a capitalist economy, business enterprises’ sole motive is produce commodities for exchange, in the process of which the ultimate outcome is profit maximisation. To maximise profit, capitalism minimises the costs of production by targeting the costs of labour amongst others.

Hence, in almost every restructuring process, it is workers who take huge losses either through reduction in wages or retrenchments or both. The case of Clover dairies – now Israeli-owned and therefore steeped in a culture of brutalising Palestinians – is illustrative: more than 2 700 workers have been retrenched after going on strike due to recent cuts in wages and working conditions. This is a stark illustration of how capitalism prioritises cost rationalisation so as to maximise profits.

The case of Clover also reveals another reason why capitalism in South Africa is failing to create employment: the neoliberal African National Congress government presides over a neocolonial economy in which multinational corporations export capital ever more freely, with the expectation that they can super-exploit workers so as to maximise profits. The main aim of such corporations in South Africa is to locate cheap labour, deregulated labour markets and liberalised trade markets, as well as raw materials, so as to maximise profits through exploitation. This also often occurs through thievery, in what is termed illicit financial flows.

In addition, the captains of finance and industry in the Johannesburg Stock Exchange are hoarding at least R1.4 trillion of investable money. This phenomenon, which accompanies what can be called an investment strike, which is a systemic decline in real gross fixed capital formation, one that has lasted for a decade, at the expense of new

machines, plant, buildings and employment. The situation worsened from 2018, coincidentally when President Cyril Ramaphosa took office, with jobs in manufacturing and construction the main victims of the investment strike. But all sections of the service sector have also suffered from net job losses during 2020-21. Only mining employment has increased, as a result of what everyone acknowledges is an unsustainable bubble in commodity prices.

Gross fixed capital investment (indexed from December 2019)

 

Capitalists scapegoat their refusal to invest in the productive sectors of the economy by citing instability and uncertainty. This, according to pro-capitalist commentators, contributes to low levels of business confidence, which was recorded at 94.1% in January 2022, a major improvement over 2020 when the SA Chambers of Commerce and Industry complained that business confidence was down to the levels last seen in the mid-1980s when capitalism was under its greatest-ever threat.

In search of rising business confidence, neoliberal macroeconomic strategies such as those promoted at Treasury and the SA Reserve Bank will not take the economy anywhere. The main reason is that they constraint the government’s ability to invest in the economy. Even Treasury had to admit in their latest Medium Term Budget Review (2022) that “renewed investment in fixed capital is vital to economic recovery and growth.” Further, Treasury noted that, “higher and more effective public-sector investment, specifically in network industries such as transport and energy, is needed to catalyse a sustained recovery.” And we add, to set the economy on a trajectory of job creation too.

Myth of trickle down and job creation

Something that does not surprise us is the growth of certain sectors of the economy that do not correspond with job creation. In the Gross Domestic Product (GDP) statistics published by StatsSA on the 08th of March 2022, Manufacturing and Transport grew by 2,8% and 2.2% in the fourth quarter of 2021 respectively.

Despite these positive growths in the sectors, unemployment was shed in the same quarter (4th quarter 2021). Transport shed 13 000 jobs and Manufacturing shed a whopping 85 000. This means that the positive output growth in these sectors does not translate into job creation.

Therefore, increased productivity in those sectors was achieved with far less workers. This means exploitation was intensified to achieve those levels of production increases in the sector. We now know that such increased productivity was not accompanied by increase in jobs. But whether this increased productivity was accompanied by a rise in wages of workers, will best be revealed by the Quarterly Employment Statistics (QES) which will be released on Thursday, 31 March 2022.

Capitalism must be abolished

The crises of unemployment, inequality and poverty are direct offsprings of South African capitalism. Economically marginalised masses of working people and the youth pauperised by unemployment resort to criminal activities to make end meets. Because our entire region – including our former Bantustans – rely on migrant labour as yet another historic mode of cheapened labour, some in our society become xenophobic, as witnessed not only in campaigns like Operation Dudula, which blame the scourge of unemployment, poverty and crime on immigrants. Government officials and political party leaders seem to have no qualms about their own xenophobia this year, when in past years government at least adopted internationalist and PanAfricanist rhetoric.

SAFTU reiterates that our problems are not created by Asian and African immigrants, but are created by capitalism — a system that is predicated on enriching the few at the expense of the majority.

We call on unemployed workers to redirect their anger from immigrants, who clearly are used as scapegoats by the ideological apparatus of capitalism, towards the capitalist system and the land dispossessors.

We rally workers behind the Kopanang Africa Against Xenophobia (KAAX) to combat the misinformation and deception that seeks to paint immigrants as the cause of our social problems. Our anger must be directed at combating austerity measures and abolishing capitalism.

And we insist on a transition to socialism, not only because this is how our own humanity and respect for all life can be expressed – but because it is abundantly evident that South African capitalism is so utterly unsuited for this country, as the new labour statistics prove yet again.