
SAFTU ON QES QUARTER 3 OF 2023
The Quarterly Employment Statistics (QES) for quarter three of 2023 vindicates the analysis of the South African Federation of Trade Unions (SAFTU) that the South African economy is not creating sustainable jobs. In fact, it behaves just as the illuminating Marxian explanation of capitalistic economy holds, characterised by diminution of real employment, creation of a huge legion of the reserve army of the unemployed and the diminution of wages. The statistics confirm this.
The QES, which measures employment and wages in formal and non-agricultural sectors, reported that employment increased to 10 176 000 in the 3rd quarter from 10 145 000 in the third quarter. This is an increase of 31 000.
If disaggregated between full-time and part-time jobs, the 31 000 increase in jobs represent part-time jobs. The real number of part-time jobs that were created in the third quarter are 34 000, but are diminished when averaged with the losses in full-time jobs. Full-time jobs declined by 3 000.
The decline in full-time jobs was mostly in construction, electricity and manufacturing. Construction has been on a trajectory of diminishing real jobs, by replacing full-time jobs with short-term and part-time jobs over the past few years. Our trade unions and construction workers who were once permanent, have bemoaned this fact in the recent period.
Deindustrialisation
More worryingly too, is the decline in the share of manufacturing jobs. Quarter 3 has shed 3 000 jobs, at the end of quarter 3, companies in the manufacturing and mining have announced restructuring of their businesses with huge implication for employment. For
instance, ArcelorMittal has announced that it will reduce its workforce by 3 500, whilst Nampak has proposed to retrench workers across its business venture.
The decline in the manufacturing work shows that the economy is still entrapped in deindustrialisation. The two decades from 1990-2010 witnessed the most rapid deindustrialisation of South Africa, as concentrated capital responded to greater pressure from the working-class, newly freed from apartheid yet facing economic liberalisation, by shutting down half the country’s manufacturing capacity. Investments shifted from productive sectors to financial markets, where exorcised financial instruments have proliferated.
Due to financialisation and the promise of high return in financial assets, owners of capital have been divesting from the productive sectors of the economy (manufacturing). The levels of investments in manufacturing are, more than a decade later, still below the levels of investments at the time of the 2008-09 global financial crisis. This commitment to the productive sector is even lower than other investments across the economy.
The low investment rate goes hand-in-hand with the character of South Africa’s economy ⎯ _a neocolonial economy. Though not using the same label, President Cyril Ramaphosa admitted this economic character, when he addressed several multilateral platforms this year. More recently (13 October 2023), when he addressed the South Africa–Namibia Bi-National Commission Business Forum he said that “we sell our raw materials to factories in Europe, Asia and America”, instead of value addition. This is the neocolonial character of our economy, in which our raw materials including minerals are manufactured into value added goods somewhere, not here. This undermines the possibilities, opportunities and plans for industrialisation.
Remunerations
The diminution in real full-time employment, replaced with part-time, of which short-time is the greatest constituent part, is followed by diminution of wages of workers. This has been coded in law, hence remuneration is increasingly premised on hourly rate, not daily rate. In other words, creating a flexible pool of labourers by putting them on part-time, allows the employers to reduce costs of purchasing the labour power i.e., payment of wages.
In the 3rd quarter, there was 2% increase in basic wages/salaries. Meanwhile, the inflation rate has been floating above the mid-point range of 4,5%. This means workers have on average, earned below the rising cost of consumer goods. Put differently, the rising cost of living has increased not only as a reflection of nominal prices of goods and services, but in comparison to the buying power of workers.
Fix the economy and create jobs
In order to change the prevailing conditions of lack of employment and slow growth, we propose the
- Creation of jobs in labour-intensive processes. There is a vital role for the state in leading productive investment through the policies of the parastatals and the public sector. The IDC should shift from its fixation with capital-intensive mega-projects and invest in labour-intensive processes in industry.
- The private sector should invest in job-creating projects, Substantial output expansion requires investment in new productive capacity by business.
- Government must invest in public companies in the manufacturing sector, including to venture into new spheres, and
- Government must introduce a jobs guarantee scheme.