Jobs summit no silver bullet
He alluded to how young people are already forming a greater proportion of the labour force on infrastructure projects and are the primary beneficiaries of various programmes. The economy was continuing to draw young people in far greater numbers into productive economic activity through initiatives such as the Employment Tax Incentive, he said.
The smart move by the president was ensuring that the recent economic stimulus and recovery plan puts the agricultural sector at the centre of the country’s new path of growth, employment and transformation.
The R400billion economic stimulus package will be reprioritised in the existing three-year budget cycle and spent on investment in infrastructure.
Currently, 68% of individuals under 25 are unemployed while close to 40% of individuals aged 25-34 are also jobless.
The figures are even shockingly worse for black women where the expanded unemployment rate was even higher - increasing from 30.9% in 2008 to 37.2% in 2018. Throughout this period, both of these rates were higher among women than men.
Government statistics released in August, show the rate of unemployment among women was 29.5% in the second quarter of 2018 compared with 25.3% among men, leaving the unemployment rate among women at 7.5 percentage points higher than that of males.
Data from Stats SA’s Quarterly Employment Statistics (QES) survey shows that in the second quarter 69000 jobs were lost, bringing the total number of those employed in the formal non-agricultural sector to just under 10million.
Mining, manufacturing and transport are continuing to bleed the economy dry, evidenced in how the economy has contracted to levels last seen in 2009. This has subsequently thrown the nation into a technical recession that has further squeezed consumers through increases in Value Added Tax, petrol and escalating costs of basic necessities and staple food.
Not only do these figures and scenarios highlight a national crisis in the jobs sector and broader economy, it also paints a picture of a very dark future for South Africa.
Both the private and public sector, and organised labour to a certain degree, have been complicit in driving the economy to the brink of disaster with young people finding themselves at the margins of economic prosperity and employment opportunities.
The Jobs Summit - with all its good intentions - may very well fall under the ambit of what some scholars call “disaster capitalism”, a term coined by Naomi Klein in her book titled, The Shock Doctrine, where she explains how power profits from disaster.
Looking at SA’s economic trends since the 2008 global financial crisis, there has been a steady growth in the financial markets with many top JSE-listed companies operating at a profit, and growing exponentially. There have been a few exceptions, but with solid turnaround strategies many companies that have taken a knock during the economic downturn have bounced back, earning billions for private equity fund managers.
Yet one problem prevails, company growth in the private sector does not necessarily translate to more employment or growth opportunities for people despite major conglomerates raking in billions.
The government has also reached significant levels of growth with tax revenue collection at an all-time high, despite a shortfall on some targets set under previous administrations.
Yet, the burden towards ensuring economic growth - particularly youth employment - remains the burden of government and not the private sector. The private sector would rather employ minimal people, stretch the work and sit on hard cold cash that could be invested in community initiatives that can pull people out of the economic doldrums.
That question that will be high on the government’s agenda at the Job Summit is how to create more jobs and stimulate the economy when plans are in place to retrench close to 30000 workers in the public sector - one of the largest employers in the economic landscape?
Even organised labour alluded to the fact that the private sector is sitting on close to R1trillion of cash that is only benefiting a select few.
Ramaphosa’s administration finds itself embarking on an investment overdrive to stimulate economic growth. But at the core of the problem is how he will ensure that the economic stimulus package moves towards benefiting the people, instead of “stimulating” what some perceive as an ineffective private sector that has turned South Africa into a consumerist economy where only a select few stand to benefit while the majority continue to be side-lined daily.
Mdluli is Independent Media’s group opinions and investigations editor