The Department of Labour’s (DoL) Annual Labour Market Bulletin (ALMB) 2012/13 has shown that South Africa’s unemployment rate has remained stubborn over the years. However the unveiling of the National Development Plan (NDP) presents a new trajectory to move beyond the constraints of the present to the transformation imperatives.
The Annual Labour Market Bulletin (ALMB) Report said the South African economy has been growing slow with a relatively small employment growth during the period under review.
The Annual Labour Market Bulletin 2012/13 Report presents the labour market and economic indicators to show how far the South African Government has gone in halving the unemployment rate and improving the standard of living among its citizens.
According to the Minister of Finance’s assessment, “South Africa’s economic outlook is improving, but requires that we actively pursue a different trajectory if we are to address the challenges ahead,” said the report.
The report noted a number of problems faced by the South African economy as:
- Labour market was disrupted by labour unrest in the last quarter of 2012 which originated from the platinum mining sector before spreading to other mining sectors and subsequently to other sectors of the economy, such as the road freight transportation and agricultural sectors in the Western Cape.
- On the one hand, inflation stayed within the inflation target range of 3-6% with consumer price rising by 5,7% in 2012 and projected to increase by an average of 5.5% a year, over the period ahead
- On the other hand, it is noted that the deepening crisis in the Eurozone, slow growth in other advanced economies such as United States and Japan, could increase the risk of a slow economic growth in South Africa in future. If so, it will also affect the projected economic growth of 2.7% in 2013 and employment growth.
The report said Government remains hopeful and the NDP is regarded as the point of departure where it: recognises that medium-term plans are framed in the context of a long-term vision and strategy, prioritises improvements in education and expansion of training opportunities, focuses on strengthening growth and employment creation, and promotes progress towards a more equal society and an inclusive growth path.
In addition to fragile global economic recovery, it is also noted that the local socio-economic factors contributed to the Rand volatility in the country.
These factors include:
- the spread of labour unrest and un-procedural strikes that commenced in the mining sector.
- the downgrading of the country’s sovereign ratings.
- the release of economic data showing a rising trade deficit and;
- the indications of a renewed pickup in inflation.
The ALMB shows that the Rand was trading at an average of R7.25 against the US Dollar at the end of 2011 and depreciated further to R8.25 in December 2012, partly due to the large deficit on current account and social unrest in the mining sector that spilled over other sectors in October 2012.
“It is argued that continued Rand devaluation runs the risk of entrenching South Africa as a country with a substantial export share but one that still remains poor, with a high unemployment rate,” the report said.
Despite the challenging economic climate and operating conditions, including disruptive industrial action, employment in the mining sector increased by 11 575 in the second quarter of 2012 relative to the previous quarter. Agricultural and manufacturing employment, in turn, declined by 18 000 and 11 254, respectively, over this period. However, compared to the same period in 2011, agricultural employment was 40 000 higher and mining employment increased by 19 890, but manufacturing employment recorded a marginal decline of 2 524 jobs.
According to the report there is a sign that South African labour market situation may not improve soon to the level of before the economic crises of 2008. The quality of jobs had deteriorated and the type of jobs created by the economy is temporal and not sustainable.
The ALMB said prolonged labour market under-performance leads to long term unemployment and many workers could become excluded from the labour market.
“This will result in young people being at risk to remain unemployed or inactive for the rest of their lives. Well-designed active labour market programmes that are aimed at making sure that young people are not trapped in precarious jobs could play an instrumental role in promoting job recovery.
“If Government does not effectively implement and monitor some of the policies that are aimed at reducing youth unemployment rate, it will increase social unrest and erode citizens’ confidence in the National Government and the financial system,” the report cautioned.
On the employment front the report said a successful strategy of poverty reduction must have its core measure to promote rapid and sustained economic growth.
The challenge for policy developers is to combine growth promoting policies with policies that allow the poor to participate fully in the opportunities unleashed and so contribute to the inclusive economic growth.
Thus, in fighting high unemployment rate that is faced by South Africa, the DoL will continue to play a pivotal role in the area of job creation. The Unemployment Insurance Fund (UIF) in partnership with the Industrial Development Corporation (IDC), has created 21 234 new jobs and 20 161 jobs were saved for the period up to 31 March 2013. This was achieved by means of the issuance of total bond of R4-billion from UIF to IDC. In return, the money was borrowed to businesses that aimed to create or save jobs.
Furthermore, the department officially launched the “Jobs Fairs and Summits” that were conducted in all nine provinces in June 2012. These fairs were intended to provide an opportunity for work seekers to meet prospective employers, in both private and public sectors, and other organisations that can assist with placement in different forms of employment or in learning opportunities.
In so doing, the Public Employment Service (PES) branch within the department launched a job search and matching system, Employment Services of South Africa (ESSA). This system is an electronic system that supports employment services and provides a national database platform that matches job-seekers with the prospective employers for placement opportunities.
On the industrial relations front the report said during the last financial year, South Africa had to cope with a wave of strikes legal and illegal from different sectors. Sadly, one of the defining features of these strikes has been the unacceptable and unjustifiable level of violence.
With regards to labour relations, the past year raised a number of challenges and on that note the department acknowledges to continue working with social partners in order to stabilise areas where there is conflict in relation to labour unrests.
In her 2013/14 budget vote speech, the Minister of Labour acknowledged the important work that was carried out by the Commission for Conciliation Mediation and Arbitration (CCMA) in mediating and conciliating disputes and providing other support, including to platinum mining companies34.
As at 2010 there were some 191 registered trade unions 191 in South Africa accounting for a membership of 3 028 400. While employer organisations were 164, and there were 47 bargaining Councils.
On the dispute resolution front - the report said shows the distribution of cases on jurisdiction referred to CCMA across provinces in South Africa. The report said the size of jurisdictional cases referred has increased from 126 040 in 2011-12 to 130 978 in 2012/13, representing 3.7% increase between the two financial years.
According to the CCMA, referred cases in respect of unfair dismissals were predominant in the last financial years. An average of 79% cases on unfair dismissal were dealt with in the financial years 2011/12/13 as compared to unfair labour practice, mutual interest, collective bargaining respectively.
One profound lesson the CCMA has taken from Marikana is that the dream of collective bargaining structures, its voluntarism system and the manner in which collective bargaining is conducted, no longer meets the aspirations of the lowest-paid workers, said ALMB.
The report concludes that with regard to the performance of the South African economy, it appears that the economy is relatively stable but at a lower growth rate from the recession of 2008. However, the GDP growth rate recorded in 2012/13 financial year does not bring much hope of tackling the high unemployment rate of 25.2% in March 2013.
The report emphasised the importance of remaining focused on the goal of achieving faster and more sustainable economic growth and the creation of decent jobs particularly for the low skilled and young people
- In relation to labour disputes, while it is hard to pinpoint the appropriate level of the minimum wage in various economic sectors, it is critical that all factors such as the wage distribution, the degree of employer power in setting wages and the nature of other labour institutions be considered amongst all social partners during the negotiation forums
- Training of the unemployed should continue through the department’s initiatives in collaboration with various government training institutions.
