The South African Federation of Trade Unions (SAFTU) notes the 0.6% decline in employment in the formal and non-agricultural sectors of the economy in the 1st quarter of 2024. The Quarterly Employment Statistics (QES) confirmed the figures reported by the Quarterly Labour Force Survey (QLFS), showing employment declines in community and business services.
Though the QLFS reported that Trade saw increases in employment, the QES has shown that it experienced massive declines. This means increases in employment in Trade took place in the informal sector, not the formal sector. The decline of employment in the formal sector reflects the retrenchment processes that businesses are engaged in. Some of these processes have not been completed, which means we are still going to see a spike in unemployment in the formal sector. Companies in mining and manufacturing are particularly engaged in section 189 processes to retrench their workers, save input costs and maximise profits.
In response to the QLFS few weeks ago, we argued that the economy cannot create enough jobs for the new entrants into the working-age population meanwhile retrenchments are underway. Consequently, there are fewer jobs created that do not correspond with the demand for jobs. We contend that this situation has been created by the structural defaults of the economy and its inherent incapacity to employ all job seekers. These structural factors lie in the logic of capitalist accumulation to always minimise operational costs and maximise profits, the product of which is scale-down labour costs through retrenchments. In addition, the failure to industrialise the economy and rump up the government investment to create companies and create public works programme on a decent wage contributes to the dismal efforts to grow the economy and create employment.
The QES also showed that aggregated basic salaries decreased by R6,7 billion and aggregated bonus payments plummeted by R27, 6 billion. Those who lost big in this decline are ordinary workers because we have seen that executive managers scooped huge salaries and big bonanzas in bonuses. The fact that we speculate on which group of employees got how much share of the payments lies in the problematic calculation made by Stats SA, that aggregates basic remunerations and bonuses.
The QES does not analyse the total earnings of the managerial elite separately from that of ordinary workers. This omission hides one of the most important aspect of conducting surveys – to draw comparisons. It fails to draw a comparative analysis of the total earnings of ordinary employees versus the total earnings of their managers and directors in the formal sector.
Furthermore, the clustering of wages of workers and the managerial elite proves problematic because it lumps the massive earnings of managers and the meagre wages of the workers. In the current narrative, the average rounds up to moderate earnings than reflecting the meagre earnings the workers actually get. Thus, it gives a wrong picture of the wage earnings and by extension the wage disparities. This gives wrong impression that ordinary workers in the sector earn a decent living wage.
In a country that has the most unequal society – unequal distribution of income and wealth – it is important for a comparative analysis to always be drawn between ordinary workers and managers in companies and sectors. This would assist the citizens of this country to trace the source of inequalities given the pay gaps between owners, shareholders, managers and ordinary workers.
