SAFTU CONDEMNS “BUILD BACK BETTER” RHETORIC AS SHAM, CONFIRMED BY STATSSA
The South African Federation of Trade Unions (SAFTU) notes the growth in employment statistics but remains unimpressed because it is negligible.
Unemployment rate decreased by 0.8% from 35.3% in the fourth quarter of 2021 to 34.5% in the first quarter of 2022. The expanded unemployment rate declined from 46.2% to 45.6%, equating to 12.4 million people who are unemployed.
Expanded unemployment amongst the youth between the ages of 15 – 24 years has declined to 75.1%, and to 52.8% amongst the youth between the ages of 25 – 34 years. Of the 20.7 million young people between the ages of 15 and 34, 46.3% of them are Not in any form of Employment, Education and Training (NEET).
By population groups, unemployment rate amongst black people is still above 50% (50.1%). Unemployment rate among black women is 53.7% and 46.9% among black men.
In 4 rural provinces (Eastern Cape, Mpumalanga, Limpopo, Kwa Zulu Natal), unemployment remains above 50%.
Unemployment in retrospect
These declines in unemployment comes because of positive employment growth in Community & Social Services, Manufacturing, Trade and Mining amongst other sectors.
However, sectors such as Private Household, Finance, Construction and Agriculture have shed more jobs, sustaining the unemployment rate high above 30% (official unemployment) and 40% (expanded unemployment) respectively.
The decline in agriculture partially comes from the seasonal cycles in work in the crop farming sector, which usually declines after cultivation and harvesting period. In addition, the structural factors that lead to decline in numbers of agricultural workers is the decline in a number of farms, and centrally, the gradual use of machines that has come to replace more labour.
The changing character of work resulting from development in technology is posing danger to jobs not only in the agricultural sector, but also in other sectors across the economy. This poses the crisis of unemployment, as a present and future reality, unfortunately.
The likely cause of unemployment increase in the private households is the increase in the number of workers working from home, the increased unemployment in the preceding periods and wage cuts and wage freezes that have reduced the capacity of workers to hire domestic workers.
In addition, the other cause that is certainly going to sustain the obscene levels of unemployment has been the investment strike by capitalists, including reduced investment on the part of government as a result of austerity fiscal framework.
But the combination of technological advancements harnessed by capitalists to clow on jobs in finance, construction, agriculture and elsewhere in the economy, and the causal effect such retrenchments have on private household work, is indicative of a sustained trajectory of mass unemployment and poverty.
In the context of the current and looming mass unemployment, government must implement job guarantee scheme which will provide unemployment for those workers who are displaced by retrenchments as a result of new machination.
This will not only create jobs but will also put money in the pockets of workers. The advantage of putting money in the pockets of workers is that it will stimulate aggregate demand, which, if not exploited by capitalists to multiply monetary earnings through higher prices, will lead to expansion of production and hiring of more workers.
The Sham of “BUILD BACK BETTER”
Was President Cyril Ramaphosa pulling our leg on 31 May 2020 when he announced we could “build back better” from the Covid-19 lockdown that quickly cost the society more than two million jobs?
Recall his statement to a group of journalists (including the Daily Maverick’s Ferial Haffajee, who reported):
“We are resolved to forge a new economy in a new global reality,” said Ramaphosa, adding that a new social compact is necessary for inclusive growth. He set out early ideas for the components of such a compact: more localisation (or import substitution to “produce our own food”, “own healthcare supplies”), economic patriotism, a strengthened informal sector; an infrastructure and maintenance programme and more and bigger public works programmes. Ramaphosa also name-checked but did not expand on a “care economy” and a “green economy” as ways to bolster the country ravaged by Covid-19 and in which most economists predict widespread job losses and a GDP growth rate that could decline by seven percentage points. Ramaphosa said that raising a stimulus package of 11% of GDP (about R500-billion plus other tax and monetary policy measures) had been tough but that bigger, better measures were necessary. Small and medium-sized businesses needed a bigger fund than that allocated to relief. The president said that the economic phase had to move now from relief to recovery. “[We must] transform and restructure. We are operating under an economy both colonial and racist. We need a reset of the economy for inclusive growth. [We need] an economy that responds to poverty. We can’t countenance 10 million people out of work.”
It was all a fib, with no attempt at a social compact and with a small fraction (less than a fifth) of the R500 billion spent. Thanks in part to an International Monetary Fund loan of $4.3 billion in August 2020, the Treasury immediately subverted any hint of building back better, due to a fiscal austerity regime that formally kicked off in October 2020 with the Medium-Term Budget Framework.
Is South Africa building back better? The total number of jobs is still 1.5 million lower than just before Covid-19 began, a drop from 16.4 million to 14.9 million. A year ago the total number of employed was 81 000 higher than it is today, according to StatsSA, and employees in the formal sector numbered 395 000 higher last year than today. And among those jobs lost over the last two years were 209 000 in manufacturing.
An major economic reset is overdue. What if Ramaphosa had really recognised the “new global reality”? Would he still be pushing for Foreign Direct Investment by some of the world’s sleaziest firms, such as his old mining partners at the world’s largest commodity trading company, Glencore, just fined more than R18 billion by U.S. authorities for widespread bribery and corruption? That one should be shut down as fast as two other predatory corporations – Bell Pottinger (the Zupta PR firm) and Cash Paymaster Services (which distributed social grants but slapped on absurd debit orders)?
Would Ramaphosa be risking the last manufacturing competitiveness South Africa still ekes out, by maintaining high carbon inputs into Eskom which will soon attract Carbon Border Adjustment Programme climate sanctions from Western trading partners?
Would he not genuinely commit to a decisive localisation agenda and to meeting all our basic needs, as promised, instead of vague and inconsequential interventions along these lines? Would he not ensure the state provided a “care economy” based on a Basic Income Grant to eradicate poverty – with at least R1500/month – instead of the tokenistic R350/month, whose reintroduction announced in July 2021 was obviously because of the powder keg of unrest exploding in KwaZulu-Natal and Gauteng.
Ramaphosa was, to his credit, brutally frank two years ago, when acknowledging that 26 years after ANC rule began, “We are operating under an economy both colonial and racist. We need a reset of the economy for inclusive growth.”
But what did he do? Everything is worse!
It is time the ruling party ended its farcical reign of talking left and walking right. We shudder at the balance-of-forces in the African National Congress, since the July conference dedicated to policy will again reveal the harsh pro-market faction’s dominance – including its drive to privatise – while the opposition is an entirely discredited group of looters which calls itself Radical Economic Transformation but which in reality represents the hyenas’ caucus.
If we are to trust StatsSA’s stats, the current capitalist stagflation – high inflation and high interest rates – has made no meaningful progress. In the world’s most unequal country, this is as untenable today as it was in mid-July 2021. The result of backtracking so thoroughly on those 31 May 2020 statements to the journalists can only be one thing: another powder keg explosion.
We in SAFTU have repeatedly laid out our programme for a very different economy, guided to meet everyone’s need while we ensure no further outsized contribution to a climate crisis that last month killed 500 people in Durban. We want Finance Minister to reinstate exchange controls forthwith, instead of his current policy of suicidal deregulation. And with the likes of the suited tsotsis in Glencore still running rampant, we’re not alone in insisting that proper state agencies take these fraudsters by the neck and boot them out before further destruction of our democracy ensues.
These are the lessons from StatsSA’s report on 31 May 2022 seen against the promises Ramaphosa made exactly two years earlier.