Amanda Watson
News Editor
2 minute read
26 Jun 2019
6:20 am

Ramaphosa faces uphill battle to fulfil 2m jobs pledge

Amanda Watson

An economist thinks current employment figures are too high and overall employment is shrinking.

There is a shortage of qualified construction workers. Picture: GETTY / AFP /JOE RAEDLE

It’s going to be slow going to reach President Cyril Ramaphosa’s State of the Nation address promise of two million jobs by 2030 if the latest labour force numbers released by Statistics SA are anything to go by.

The Quarterly Labour Force Survey covers labour market activities of persons aged 15 to 64 years and, according to its latest release, total employment increased by 76,000 or 0.8% year-on-year between March last year and March this year.

This meant there had been an actual increase of slightly more than 6,333 jobs per month for the first quarter versus a required increase of more than 16,666.

And with gross domestic product shrinking by 3.2% in the first quarter of this year and a 5% drop from the end of 2017, Ramaphosa has an uphill battle ahead of him.

“The irony of everything is, two million is a low number if you have 10 million unemployed,” said economist Mike Schussler.

He called the increase in jobs an anomaly and added that the numbers weren’t making sense.

Schussler explained that labour was a delayed indicator, and the next few quarterly results would give a clearer picture as people settled in new jobs they began earlier this year.

“With all the adjustments Statistics SA must make, its data now leans towards newer firms which are more likely to employ than it does to more established firms which are more likely to retrench.

“In the bigger picture, there’s being very little change and my feeling is employment is shrinking.

“It just doesn’t feel right because of the bad news we hear,” Schussler said. “It’s a very difficult set of numbers to reconcile with the current economic climate, the other data releases we receive from Stats SA and the Reserve Bank.”

Earlier this month, Moody’s vice-president Madhavi Bokil noted in Moody’s Global Macro Outlook that weak survey data suggested the odds SA’s economy may experience another technical recession in 2019 were high.

“We attribute the persistent economic weakness to lacklustre domestic private sector demand – both household spending and investment, and the detrimental impact of widespread power outages on the manufacturing and mining sectors,” said Bokil.

The projection tied up with Statistics SA’s reported decreases in jobs in SA’s cornerstone industries: trade (-8 000 or -0,4%), the transport industry (-3 000 or -0,6%), the electricity industry (-1 000 or -1,6%) and construction (-1 000 or -0,2%).

“These are the industries which are feeling the pain,” Schussler said.

An increase of 6,000 jobs in mining was a surprise, he said, but he felt that South Africa was losing overall in critical industries.

“It’s impossible for SA to create inroads into unemployment if we don’t create enough jobs. So these numbers show we have some industries caving in and I’m worried about our ability to compete in the international mould unless we get a few things right.”

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