While conservative estimates are that around 60 000 people lost their jobs in South Africa in the past year, the knock-on effect on temporary employment is even greater.
A retrenchment report released by trade union Solidarity said 58 549 people were laid off from April last year in the industries in which it organises - mining, metal and engineering, professional, chemical, ICT and individual members.
But in mining alone, 1.7 job opportunities are created in the services sector for every permanent job gained. In manufacturing, the picture is even gloomier as it is more labour intensive.
Every retrenchment resulted in four job opportunities being lost.
And it doesn't end there.
The report says that normally retrenchments are preceded by natural attrition such as vacant posts not being filled, voluntary severance packages offered, employees requested to take early retirement and capital projects put on hold.
It cites Lonmin as an example.While the mining company saw a staff reduction of 5 108 workers, only 78 of them were formally retrenched.
“...the number of retrenched workers is but a drop in the ocean in comparison to the number of job opportunities lost and actual downsizing of the South African workforce that occurs,” said Solidarity general secretary Gideon du Plessis yesterday.
Some, including ANC secretary- general Gwede Mantashe, have estimated that over 100 000 people will lose their jobs as the country’s economy continues to limp as a result of internal and external factors.
Solidarity’s research appears to confirm these estimates. Most alarmingly, current employment trends may be the precursor to a recession, as happened in 2008-2009, the last time South Africa experienced a sustained economic contraction.
“What is of more concern is that the current pattern and wave of retrenchments is very similar to a situation at the end of 2008 and the beginning of 2009, which was the precursor to the recession.
“It seems that one major retrenchment announcement tends to lead to a spate of similar retrenchments in a certain sector, as if it clears the bottleneck when one company takes the lead and absorbs the initial criticism.
“This then makes is safer for other companies to announce a similar process,” Du Plessis said.
The union is concerned that the next economic upswing will not lead to large-scale employment - at least not in mining or manufacturing. The reason is that many businesses and mines are mechanising and automating.
Trade union Uasa (United Association of South Africa) also released an employment report yesterday.
The document, which was compiled by economist Mike Schussler, warns that until commodity prices crawl their way back to higher levels, there is little hope for South Africa’s older economic sectors - manufacturing, mining, electricity, construction and transport - to create jobs.
It says that in most industries, the next five years will be more about keeping jobs than creating them.
“But if we do things right we can certainly grow industries such as tourism, education and food production, while newer technologies give clever young people hope. But more people will have to do their own thing,” the report states.
Chief executives and business leaders are working with the government to foster inclusive growth and identify areas for quick wins.
The business working group said significant progress had been made in identifying new areas for investment and job creation, including the design of a funding instrument for investing in high growth small and medium enterprises.
The Star