|SA needs to make some hard choices about employment|
Report shows employee numbers in SA increased, but employer numbers dropped dramatically
South Africa has only created about 350 000 new jobs in the last eleven years to March 2011, economist Mike Schussler said today at the presentation of the 2011 UASA South African Employment Report.
“But perhaps this figure is not quite true, as employers and the self-employed saw a massive drop,” he added.
Schussler said SA need to make some hard choices and some of those choices may need great political leadership rather than a muddle. One hopes that South Africa once again chooses leadership over fear of the difficult choices.
At the tenth presentation of the report, compiled by Schussler on behalf of the trade union UASA, he shared his views on South Africa employee numbers in a historical and world sense.
The self-employed were counted as 2,2 million in 2001 and in 2010 only counted for half that or 1,1 million. Employers employing more than fou people other than themselves also dropped from about 350 000 to 300 000 over the same period.
This indicates that employee numbers actually increased substantially but employer numbers dropped dramatically. The problem however remains that for South Africa to obtain the international average adult employed ratio or the new growth plan we need to increase the number of jobs at least 10 fold.
In 2009 there were 179 countries that reported labour statistics to the International Labour Organisation (ILO) out of 195 Countries which the world has.
The ratio of adults employed has fallen from 62,1% in 1991 to 60,6% in the world today -2009. This fall in the number of employed adults indicates a slight increase in the number of unemployed people in the world. One must also remember that this is a recessionary time period and therefore the 1,5% fall is not really a major problem. Around 7% of the world’s adults remain unemployed
Schussler said, in contrast, South Africa has seen the ratio of adults employed fall from about 53% in 1991 to 40,8% on average for 2010.
“This is a substantial fall in the ratio of South Africans employed, however the actual number of employed adults has risen – it is just that the SA population has risen much faster.
“However employed adult numbers have risen substantially all over the world and this perhaps best shows how the world has succeeded in creating jobs, mostly in the services arena,” Schussler said.
ILO labour market indicators show that the number of employed adults in the world has increased from 2,25 billion in 1991 to 3,03 billion in 2009. This 34% increase over the last eighteen years came as a result of economy growth which was close to 4% per year for the world since 1990. The actual number of employed adults grew at around 2% or half the world’s growth rate.
Internationally economic growth has therefore resulted in jobs. The number of employees that work in countries that have signed the WTO agreement has grown from 1,5 billion to 3 billion over the same period. (When China joined the WTO it alone added about 600 million adult employees according to Prof Michael Freeman of Harvard.)
“This means that since 1991 the world work force numbers that compete with each another have doubled. The old classic Marxists saying would have us believe that earnings or income per worker would have fallen because of ‘rush to the bottom’ as workers see wages drop in order to survive.
“However what we do know of the world’s adult employees is that not only are there more of them, but almost all have become better off. The average worker in the world earned 42% more in 2008 than in 1990 – based on GDP per engaged worker,” said Schussler.
On this basis the average South African worker earned 16% more in real terms, compared to Chinese workers who now earn 305% more and Indians who earn 110% more on the same basis. Countries on our level of development such as Chile earn 60% more. Germany and Saudi Arabia earn about the same as they did in 1990, while Zimbabweans earn less than half of what they did in 1990.
Only in 20 countries did workers become poorer while workers in 103 countries became richer. In three countries workers saw no change in earnings. But in some countries, such as Zimbabwe, dictatorship and bad human rights records played a role while war, as is the case in Iraq, also played a role in other countries. Leaving out countries with war or internal strife the actual increase in real wages has been around 53% in 18 years or about 3% a year over the last eighteen years.
In short the number of employed people grew 2% a year over the last two decades while on average they earned 3% more in real terms every year if they stayed in a country free of war and dictatorship, said Schussler.
Innovation and learning is something that certainly happened and helped workers increase their wellbeing. Workers around the world increased their qualifications quite substantially. While the data is a bit thinner than one would like; the essence is that the percentage of workers who have either completed school or obtained tertiary qualification has increased by 5% over the last decade to 2007 or about 0,5% per year.
Schussler said South Africa had outperformed the world in educational increases as less than 23% of our work force had a matric qualification or more in 1991. In 2010 just over 37% of our adult population had finished school or more. In the same time, the world moved from about 46% of all adults who had completed school in 1990 to about 56% in 2007 (or 2004 or later in some cases.)
Over the last decade South Africa saw adults with a matric or more move from 28% of all adults in 2000 to 37% of all adults in 2010 - a truly massive achievement.
Despite this impressive educational attainment, the number of South Africans adults employed has fallen from about 46% to about 41% of all adults. Could it be that South Africans are obtaining the wrong skills, or is there a drop in quality, as normally such a massive skills improvement would have led to a rise in the number of jobs?
Schussler said that while South Africa has achieved greater education, SA has more labour laws than most countries around the world and we have more people than ever employed by the state. The private sector is taking it’s time in employing people and for that there must be a reason.
South Africa has only created about 350 000 new jobs in the last eleven years to March 2011. But perhaps this figure is not quite true as employers and the self-employed saw a massive drop. The Self Employed were counted as 2,2 million in 2001 and in 2010 only counted for half that or 1,1 million. Employers employing more than 4 people other than themselves also dropped from about 350 000 to 300 000 over the same period.
“This indicates that employee numbers actually increased substantially but employer numbers dropped dramatically. The problem however remains that for South Africa to obtain the international average adult employed ratio or the new growth plan we need to increase the number of jobs at least 10 fold.
“SA needs to make some hard choices and some of those choices may need great political leadership rather than a muddle. One hopes that South Africa once again chooses leadership over fear of the difficult choices,” Schussler concluded.
For more information, or to arrange a personal interview, please contact
UASA spokesperson André Venter on 011 472 3600 ext. 265, or 083 251 3274.