As South Africa celebrates Workers’ Day, it faces a number of pressing issues, chief of which is the economy’s inability to create jobs.
This is the view of Prof Dieter von Fintel of the department of economics at the University of Stellenbosch.
“Unemployment is one of South Africa’s central problems. We have high a unemployment rate. Since 1994, unemployment has been on the rise and then came Covid-19, which saw a number of sectors shedding jobs.
“In other [countries] the unemployment rate is not as high as South Africa.” This was because South Africa did not have a high rate of self-employment. The challenge was how to stimulate entrepreneurship.
Von Fintel said the question was whether the education system was ensuring young people acquired skills in a changing labour market.
“Are we skilling our young people enough? The added pressure is the labour market which is changing a lot. We are moving to artificial intelligence [AI]. How is the school system prepared?”
“If you think of 50 years ago we had lots of jobs in the agriculture and manufacturing sectors. These jobs are no longer available. New jobs will be created with AI. We need to train children how to think creatively to develop critical thinking skills so they are able to adopt new technology quickly.”
On the role of unions and their relevance, Von Fintel said unionisation had been important in promoting workers’ rights. A positive improvement in the labour market was the implementation of the national minimum wage (NMW) in all sectors from 2019.
There was initially a fear that with the NMW, employers will employ less people, but initial research showed this was not the case.
“Putting a minimum wage in place is good for workers. Firms are not stopping to hire people because of the minimum wage. It has been a useful policy.”
Von Fintel said in some cases there was evidence that employers in some sectors pay below the NMW, especially where there were no employment contracts and where there was short-term employment or part-time work. The employment and labour department should ensure there was compliance with NMW.
Labour law specialist Andrew Levy said what workers were mostly concerned about was job security.
“If they lose jobs they may never work again.”
Another concern was the way inflation in basics such as food, rent, transport and electricity was eating at their disposable income.
“The less you earn, the more you are hurt by items that are hit by inflation. Though inflation might be 5.2%, for them that is much more. Their concern is making ends meet,” Levy said.
Riefdah Ajam, general-secretary of the Federation of Unions of South Africa, said one of the biggest issues of concern for her was the abuse of workers by some employers and noncompliance with labour laws, despite the country having some of the most progressive labour laws in the world.
The energy crisis also posed a consistent threat to economic capacity. Some businesses went bust because of the extra expense incurred to ensure production continued when there was load-shedding. The respite from load-shedding in April was welcome and assisting workers in some industries.
Ajam said there must also be a focus on poverty alleviation.
“A balance must be struck between the cost of living being more than wage increases.”
Another issue was climate change and unemployment.
“Climate change poses an existential threat to jobs, especially to workers in the agricultural sector, tourism, engineering, mining and fishing communities.”
There was also a need to embrace technological advancements.
“Mitigating strategies must be put in place where there must be a migration to technological innovations. Reskilling must be prioritised for workers to keep pace. There must be coherent plans to assist to make sure workers are not left behind.”
She said there must be investment in education, skills development and skills transfer so that youth could be absorbed into the economy.
In job generation, government prioritised the expanded public works programme, mostly temporary job opportunities without skills transfer.
“We want jobs to be of a more permanent nature with job security. We should be co-crafting solutions,” Ajam said.
Cosatu acting national spokesperson Matthew Parks said the challenges facing workers were immense, in particular a 41% unemployment rate and a 59% youth unemployment rate, deep levels of poverty and inequality, entrenched corruption and crime.
“Government and business with labour need to accelerate efforts to remove obstacles to growing the economy, in particular fixing Eskom and Transnet and Metrorail, rebuilding local government municipal services [and] investing in [good] quality public services.”
Efforts must also be made to strengthen Sars and law enforcement agencies to tackle tax evasion and crime, expand the Presidential Employment Programme to provide a path for young people to earn a salary and enter the labour market and to ramp up local procurement programmes and reduce the wage gap.
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