UASA Media Release: 19 May 2023
Prof Carel van Aardt, Research Director & Head of the Market Intelligence Research Division at BMR presenting the UASA South African Employment Report (Incorporating the UASA/ BMR Employment Index) at the Radisson Hotel & Convention Centre in Johannesburg, O.R Tambo.
Statement by Abigail Moyo, spokesperson of the trade union UASA:
The triple challenge of poverty, inequality and unemployment is just the tip of the iceberg as massive challenges continue to hinder economic growth and job creation in South Africa. These challenges include load-shedding, grey listing, weak global economic growth, low levels of consumer and business confidence, and the possibility of further sovereign rating downgrades by rating agencies, the Russia-Ukraine war, prevailing social and political instability, weak governance (including rampant corruption) and infrastructural challenges.
Earlier today, Prof Carel van Aardt, Research Director & Head of the Market Intelligence Research Division of the Bureau of Market Research, presented the UASA South African Employment Report (Incorporating the UASA/BMR Employment Index) at the Radisson Hotel & Convention Centre in Johannesburg, O.R Tambo.
Van Aardt elaborated on various matters influencing economic and labour market performance in South Africa, focussing on the labour market issues underlying the current low job creation levels and high unemployment levels.
He said the average real annual GDP growth rate is expected to show very little growth in 2023. Given the many downside risks to economic activities, the anticipated low average annual economic growth for South Africa does not come as a surprise. Among other determining factors such as education and skills, Van Aardt presented practical solutions based on wide-scale international research and experience that may assist government, stakeholders and unions in moving towards economic growth and sustainability, including:
• Ensuring labour market flexibility to encourage employers to choose labour above capital in terms of job creation. Labour market flexibility in this regard does not imply removing labour market regulation, but rather striking a better balance between labour market regulation and business imperatives in order to ensure higher levels of job creation.
• Improving labour market absorption: human capital formation specifically emphasising the required labour market skills and entrepreneurial skills enabling people to create their own employment. The emphasis in this regard should be to make job seekers less dependent on potential employers by ensuring that they are empowered to create their own jobs/businesses.
• Addressing poverty and inequality: free quality education focusing on personal finance, occupational, technical and entrepreneurial skills from pre-primary to tertiary levels based on terms and conditions. The focus in this regard should be to address the current large-scale fiscal requirements needed to maintain the massive social welfare system. This can be done by progressively weaning people from the said system by ensuring that they have the right skills up to a tertiary level (where required) to do so.
• Ensuring social equity: social capital formation specifically emphasising shared values and personal empowerment. Millions of poor and unemployed people feel incapable of improving their own livelihoods due to a strong inculcated external locus of control. People need to develop a strong internal locus of control.
• Labour protection: personal responsibility, social insurance and strong civil society (including media). Research worldwide has shown that as people become more empowered to improve their own livelihoods, this requires different forms of labour protection. The new forms of labour protection focus predominantly on strategic action instead of predominantly industrial action.
• Active labour market policies: because active labour market policies tend to distort equilibrium in the labour market, they should be kept at a minimum. Some active labour market policies are vital to address past and present inequities and inequalities, but when such policies become too pervasive and draconian it has the potential to have the opposite to the intended effect.
According to Van Aardt, a new labour market policy paradigm is required to address the various burning labour market issues identified in South Africa.
He explained that the new paradigm, which has been implemented with great success in other developing countries and in many highly successful developed economies, focuses on absorbing the unemployed, reducing poverty and distributing income and wealth more equally.
This is achieved by ensuring that the working-age population becomes increasingly able to create their own employment by increasing their educational level and entrepreneurial skills. This will also increase personal empowerment, with more people becoming self-employed instead of being dependent on an employer or government for their incomes.
“However, government cannot be allowed to shirk its responsibility to create an enabling environment for the economy to grow, making South Africa an attractive destination for foreign direct investment, creating opportunities for private capital to invest with an expectation to generate profits, thereby creating jobs,” said Van Aardt.
“Infrastructure development and maintenance, together with efficient provision of quality services, cannot be over-emphasised in the role government ultimately plays in sustainable economic growth and job creation.”
Concluding his presentation, Van Aardt stressed that each stakeholder and individual have a role to play in achieving this new labour market paradigm. “Government must fulfil its responsibility towards its citizens as an enabler, citizens must acquire higher levels of human and social capital, and the labour market must evolve to be more flexible to support start-up businesses in a less rigid environment.”
With South Africa’s unemployment rate at an all-time high, UASA is pleased to participate in strategies to overcome the country’s economic and employment challenges. We highly respect the inputs of economists, business, labour, government and civil society as we work hard to ensure that our industries and sectors remain relevant and sustainable for the livelihood of our members.
UASA encourages its members and fellow South Africans to work towards scarce skills development and innovation to ensure sustainability and economic growth for the future.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162.