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CONTENTS
Getting
South Africa working Employment trends and figures paint a dismal picture. With the exception of the wholesale/retail trade and financial services, all sectors of the formal economy showed job losses between June 1996 and June 1997. In the first six months of 1997, 62 000 jobs were lost. This flies in the face of GEAR targets. The longer term trends are cause for equal concern: between 1990 and 1996 the manufacturing sector suffered a 9,1% loss in jobs, construction 21,3% and mining 27,5%. The public service is also facing retrenchments, reversing its previous record of job creation.
Policy interventions Framework
The aim of such a framework must be to seriously address poverty elimination and, connected to this, inequality and unemployment. The main way of achieving this aim is a comprehensive strategy involving:
It must also be borne in mind, however, that the South African economy is a contested terrain. Economic policy will be subject to conflicting interests. A substantial fight will have to be waged to determine policy choices and to ensure implementation. What are the perspectives which need to inform an alternative growth and employment path? Key
perspectives A job creation strategy must address the quality of jobs created, not simply the quantity. It must recognise that human beings are not commodities whose living conditions are subject to the whims of the market! Unpaid household labour, performed mainly by women, must also be recognised and taken into account. The nature of the relationship between employer and employee also needs to be addressed. Present ownership patterns and economic power relationships must be changed. Redistribution of productive assets has the potential to redefine the nature of employment in South Africa.
Time frames
An integrated employment strategy must:
The labour market The dependence of the South African economy on unpaid labour, primarily performed by women, must be taken into account. Job creation for marginalised groups and rural communities in particular must be made a priority. Finally, the public sector must be seen as a critical employer and engine for job creation. Jeremy Daphne is a senior researcher, Labour Markets, at NALEDI.
Job creation is the theme of this issue of the Policy Bulletin. In our cover story, Jeremy Daphne presents the job creation framework prepared by NALEDI. The framework, which is explicitly pro-labour, stresses the need to both create jobs and ensure job security. Labour, government and business are currently preparing their inputs for the jobs summit. A key issue is the economy's ability to create good, quality jobs and to stop the rapid destruction of existing jobs. While South Africa's labour force is growing rapidly, employment has fallen to 1981 levels. The balance of the workforce is unemployed or involved in informal activities, including crime. The failure of GEAR to deliver jobs is now widely recognised. With the job crisis growing, government will need to adopt a new and interventionist strategy for job creation. A successful jobs summit will require government flexibility in terms of developing macroeconomic and industrial strategies that support the creation of 'more and better jobs'.
Ravi Naidoo
Job
loss
The only sectors which have created jobs are private services (this includes financial services and tourism)and the public service. Due to budget cuts, the public service is facing job losses. The Department of Public Works, for example, plans to reduce its workforce from 9 000 to 3 500.
Unemployment
The following table shows the unemployment trap in South Africa. It shows that the large majority of those who are unemployed have never had a job:
Investment
Economic policies in general are gender-biased and are often blind to the roles that women perform in the economy. The concept of Gross Domestic Product (GDP) reflects this bias: unpaid labour is excluded from the figures and thus made invisible. The role of the informal sector where many women scratch out a living is also not adequately reflected. GEAR relies heavily on the GDP as an indicator of economic growth. This further hampers its ability to deal with women's issues. Reproductive labour Reproductive labour (responsibility for child rearing, domestic duties etc) is most often unpaid, invisible and unrewarded. In South Africa, women perform most reproductive work. The underlying logic behind GEAR is "rolling back" the state through decreasing the size of the public sector, including privatisation. Cuts in social services are the inevitable result of this process. It is women who will bear the main cost of these cuts. The success of GEAR depends on an increase in the unpaid labour women presently perform. Although reproductive labour is largely unpaid,it is actually very costly. The costs fall largely on women. There are several aspects of GEAR which will increase these costs. For example, high interest rates raise the cost of credit-financed purchases, particularly housing. Household resources are squeezed, leaving less money over for the costs of reproductive labour. The
informal sector The informal sector is a critical source of income for women. Yet GEAR has very little to say about it. Highly technical exercises are engaged in to model the formal sector of the economy, but there is no attempt to rigorously analyse the impact of GEAR prescriptions on the informal sector. By contributing to the invisibility of this sector, GEAR contributes to the economic oppression of women. Job creation is one of GEAR's main pillars. The welfare of women would improve if those who work in the informal sector could find well-paying jobs in the formal economy. GEAR's job creation record has, however, been a disaster. Instead of creating jobs, jobs are being lost at an alarming rate. This will push more and more women into the informal sector and exert downward pressure on the already low standards in that sector. The
formal sector GEAR argues for labour market flexibility, which will hit women workers, who already occupy a vulnerable position in the labour market, hardest. The unemployment rate for women is much higher than that for men. While the overall rate currently stands at 29%, 38% of women are without a job. More than 50% of African women are unemployed. GEAR could make this situation even worse. Its export-oriented focus and trade policies will lead to an emphasis on sectors where men predominate, while the sectors where women are employed, such as clothing and textiles, are run out of the market. Retrenchments in the public sector will also affect women particularly badly. The overall effect of GEAR will be to perpetuate and entrench the gender division of labour and women's disadvantaged position in the economy. The challenge is to develop a gendered economic analysis and gender-sensitive economic policies which make women visible, value their contribution to the economy and ensure that they receive services which address their needs. Liesl Orr is the co-ordinator of the Women and Work project at NALEDI.
In November 1997 the Department of Finance released a policy statement which will change how the national and provincial governments produce their budgets. The policy statement called for a medium-term expenditure framework (MTEF). The idea behind the MTEF is very simple. Instead of announcing a budget for one year only, in future the Department of Finance will table a set of projected revenues and expenditures for the following three years. Parliament will, however, only approve a budget for one year at a time. Presumably, the projected expenditures for the other two years will be subject to public debate and revision before parliament approves them. Reform
The MTEF, however, should be approached with caution. All the revenue and expenditure estimates have been calculated to match GEAR policies. Accepting the actual MTEF, as opposed to the concept of medium-term planning in general, means a de facto acceptance of the GEAR approach to macroeconomic policy. James Heinz is a senior researcher, Economics, at NALEDI
Source: Reserve Ban of South Africa Volume
of Production Manufacturing
Food price increases, which are higher on average than the rate of inflation, therefore hurt poorer households substantially more than wealthier households.
The centralisation of economic power, driven by the World Trade Organisation (WTO) and structures such as the World Economic Forum (WEF), is at an advanced stage. The Multilateral Agreement on Investment (MAI) currently under negotiation will result in even greater autonomy and freedom of movement for transnational corporations (TNCs). New international movements and initiatives are emerging in opposition to globalisation. Declaration On 29 January 1998 the annual meeting of the WEF started in Davos,Switzerland. The WEF includes the foremost 1 000 TNCs. At the same time, 192 organisations from 54 countries, with an aggregate membership of 20-million, released the Declaration against the Globalisers of Misery. The Declaration begins: "we oppose the accelerating centralisation of political and economic power caused by globalisation, and its gradual shift to unaccountable and undemocratic institutions, such as the World Trade Organisation". This statement was the first co-ordinated activity of the People's Global Action against 'free' trade and the WTO (PGA). In February 1998, 600 representatives of peoples' movements met in Geneva to establish a platform for world-wide action against trade liberalisation. This was the founding conference of the PGA. A statement released ahead of the conference read: "The PGA will work as a tool for co-ordination, exchange of information and mutual support for the struggles of all those hit by neoliberal globalisation." The PGA will organise a wave of decentralised mobilisations and protests all over the world parallel to the Second Ministerial Conference of the WTO which will take place on 18-20 May. MAI
In November 1997 the Western Hemisphere Workers Conference Against NAFTA drew together 412 representatives of labour and citizen organisations from 20 countries in North and South America. They have a stated common goal of "building a united front against unfair and unjust 'free trade' processes, the MAI, Structural Adjustment Programmes, and the Free Trade Area of Americas (FTAA)".
Beginnings While such initiatives can be seen as small-scale, relative to the immense power wielded by the WTO, G7 governments and TNCs, they could well be the beginnings of significant grassroots resistance to neoliberal economic policies. With unemployment rising in most societies, the recent crisis in the East Asian 'wonder' economies, and numerous country examples of spontaneous uprisings against economic liberalisation, might the conditions not be right for a new global social movement?
The
public service NALEDI held a workshop of public sector unions on 20 January 1998. The workshop brought together a wide spectrum of unions with different perspectives. The findings of the NALEDI Public Sector Labour Relations project were presented. The papers covered the public service labour market, new trends in collective bargaining, a study of the new grading system, global trends, labour relations in police and health services and a study of the development of public service unions under apartheid. The debate generated by the workshop will be incorporated into the forthcoming NALEDI book on the public service. Co-determination
On 26 and 27 March NALEDI held a workshop to present the findings of its Co-determination and Tripartism project. The papers forming part of this project include a case study of NEDLAC, a survey of co-determination in South African enterprises, a study of employers' thinking on co-determination and a study on co-determination and the LRA.
Job creation Some hold the view that job creation can only be achieved through a low-wage/ low-labour standards model. Any model that promotes lower wages than those that already exist will worsen the problem of the 'working poor' those who have jobs but still live below the poverty line and thus increase poverty. An alternative view is that 'more and better jobs' is the route to take. This will mean examining the relationship between productivity increases and job creation. NALEDI's Job Creation project is developing an employment strategy framework. This research will feed in to labour's submissions to the job summit.
Socio-economic rights The hearings will provide an opportunity to:
NALEDI undertakes labour and economic research. Its main focus is policy research which will build the capacity of the labour movement to engage effectively with the challenges of our new society.NALEDI is an initiative of COSATU, but is controlled by an independent board. NALEDI's main focus areas are labour markets, economic, trade and industrial policy, union organisation and women and work. Our activities include the production of research reports and policy memos, facilitating workshops and training and library facilities and resources.
Contact NALEDI at: |
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