Ian Ollis
THERE is some good among the bad economic news South Africans have been inundated with lately: no local debt crisis, no sub-prime collapse, a world-class, stable banking system and a government budget process that is transparent.
However, most of our major trading partners are still suffering from the fallout from the economic downturn and the US debt-ceiling problem, so we cannot afford to have policy strangling our fragile economy.
The numbers are troubling.
Over a three-month period, 174 000 jobs have been lost while only 7 000 have been created, with the net effect of 167 000 jobs lost.
The unemployment rate (using the narrow definition that excludes those who have given up seeking work) is at 25.7 percent – about 4 538 000 job seekers. Adding those who have given up looking, the rate is about 38 percent.
This means that since the last quarter of 2008, South Africa has cumulatively lost 902 000 jobs.
Clearly, something is not working.
We cannot afford to sit and wait for the rest of the world to rescue us; we need to deal with the crisis internally.
Some government policies, and some union activity, are preventing the country from rising out of the jobs crisis.
We have Cosatu demanding a total ban on labour broking; the labour minister tabling a batch of the worst-drafted and most constrictive labour legislation the country has seen; and some of the most far-reaching strike action seen for years.
There were reportedly more than 1 000 working days per 1 000 workers lost last year, partly because of the prolonged public sector strike. This year has been no better.
One commentator, Gavin Brown, says South Africa now has the highest rate of strikes in the world.
This is completely unnecessary
With the world’s largest dispute resolution centre in Joburg (the Commission for Conciliation, Mediation and Arbitration, or CCMA) we are clearly doing something wrong. Such a level of dispute and conflict is not in keeping with international norms.
Cosatu is creating unrealistic expectations, while current legislation and labour policy have created unhealthy, antagonistic labour relations.
Signs of the stress caused to the economy can be seen in the number of vacant stores and defunct restaurants in top-rate locations.
The lack of leadership in the Zuma administration compounds the problem. Highly controversial policy debates are raging around ANC alliance partners with no sign of resolution.
The debate on the nationalisation of mines and land expropriation, faltering foreign direct investment, a growing budget deficit and the mis-handling of the Walmart-Massmart merger, plus uncertainty about the future of labour brokers, point to this administration’s inability to lead and its failure to fulfil its promise that 2011 would be a year of job creation.
One has to ask, what factors are preventing President Jacob Zuma and his cabinet from taking action and rolling out a jobs-friendly economic policy?
A key problem must be the broad church of the tri-partite alliance and a bloated and directionless cabinet.
We’ve reached the point where the pendulum has swung too far in the direction of Cosatu’s demands for large-scale new job creation to be possible.
The pendulum needs to swing back from the edge. Critical dialogue in the alliance seems to be in only one direction, with Cosatu criticising the ANC government and no serious alternative direction offered. We may end up with the labour movement governing through the back door.
We need urgent changes to government policy and a jobs-friendly review of labour legislation, to provide the jump-start for jobs creation that the Expanded Public Works Programme has failed to produce.
The unemployed have no say at Nedlac or in the cabinet, which means Cosatu gets disproportionate airtime.
Policy, legislation and regulations aim to give ever more protection to those who have jobs, while making it harder for those not in work to find an open door to a new or entry-level one.
Lazy
A key problem is the difficulty companies face in replacing lazy or dishonest staff with hard-working or trustworthy people who are unemployed. This discourages companies from giving inexperienced or unskilled workers a first leg-up to a real job, as the risk is too great.
Changing the law to deal with this problem will reduce the burdensome caseload borne by the CCMA and encourage firms to take on more youth and people without work experience.
It costs taxpayers an average R6 500 a case to administer a remedy for unfair dismissals at the CCMA, but the average settlement cheque is R5 000 if the employee is not reinstated.
This is inefficient, costly and unnecessary. The system needs review to get people working or job-hunting and not waiting for their cases to be heard.
Providing a youth wage subsidy, tax rebates for skills development on the job, tax holidays for newly set-up small-scale enterprises and more support for small to medium businesses will help unlock the economy.
The great failing of this ANC administration, and the previous one, is that virtually all activities of the labour ministry and department focus on giving greater protection to existing workers while doing virtually nothing to create jobs, or to empower small business.
The Employment Services run by the labour department is a dismal failure, seeing a tiny fraction of job-seekers settled in permanent positions. Along with Productivity SA, it represents the only real attempt by the department to assist. This is pathetic.
With the current prohibition on firing lazy workers, difficulties in retrenching during a downturn, rising electricity costs and lack of continuing support for new enterprises, we will not see any new factories being built. Jobs-intensive companies that focus on exports should get a tax holiday to a degree.
Some have proposed an economic Codesa to break the current deadlock. The deadlock is caused by the lack of a strong voice at Nedlac and in the cabinet on behalf of the unemployed and the stranglehold Cosatu has on policy within the alliance.
An economic Codesa requires the voice of the unemployed being heard above the political posturing that bedevils policy debate.
The pendulum must swing away from Cosatu and the left to a more sensible middle ground where business can recover its confidence and open up the economy to increase manufacturing and exporting.
It has swung too far in favour of people who have jobs and too far from people who have no jobs.
An ANC colleague suggested the ruling party doesn’t want a labour broking ban, but is trying to appease Cosatu. If that is so, we have to hope the centre holds, and that leaders will bring the policy debate back to the unemployed and growing the economy.
The ANC needs a strong man to stand up to the left within its ranks and to point to these alternatives. This may result in the left splitting from the alliance, or listening to reason for the sake of the unemployed. Either way, it will be a service to the unemployed and the country.
l Ollis is a DA MP and the party’s spokesman on labour.