During last year’s budget speech, finance minister Tito Mboweni introduced an important point: supporting existing jobs. It was salient then, as it is now, because SA is not only dealing with the challenge of job creation, given the increase in new entrants to the job market; it also faces alarming numbers of job losses, speaking to the need to support existing jobs.
This could not have been more evident in the latest employment numbers from Stats SA. The statistics authority, earlier this month, told us that while the unemployment rate has remained unchanged at 29.1%, unemployment itself is increasing. Though the number of people who are employed increased by 45,000 between the third and the fourth quarters of 2019, this was down 108,000 against the fourth quarter of 2018.
On a trend basis (looking at numbers over a period of time) we see a concerning pattern. Between the last quarter of 2018 and the last quarter of 2019, the number of unemployed people increased by 587,000 — 478,000 were new entrants to the labour force, and 108,000 lost their jobs.
Concerningly, when considered over five years, unemployment has risen by about 1.2-million.
What this means is that our jobs strategy needs to become more robust, and it needs to be properly funded if it is to deliver employment — especially considering the changing structure of our economy and of the global jobs market.
This is also clear if you consider the changes we face. The "Future of Jobs Report", released by the World Economic Forum (WEF) in 2018, found that "as workforce transformations accelerate, the window of opportunity for proactive management of this change is closing fast, and business, government and workers must proactively plan and implement a new vision for the global labour market".
When considered over five years, unemployment in SA has risen by about 1.2-million
The report talks of a number of shifts that are expected in the workplace. These include the large-scale adoption of technology, a growing trend towards robotisation, the changing geography of production (including value and distribution chains), and the type of workforce (a move towards part-time rather than full-time employment).
Though these changes are generally expected to lead to positive net outcomes, we should expect them to bring some labour instability, including the displacement of workers, and changes in income dynamics and trends. Our jobs strategies therefore need to manage both this instability and the displacement of workers and skills.
So it was concerning, recently, to hear former budget office head Michael Sachs speak about discord between the plans and commitments made by the government and the administration’s fiscal policy.
More than just talk
An important example exists in how government has talked up the importance of supporting the agricultural sector, especially through the drought and the losses arising therefrom, as well as funding new opportunities, including land reform.
Mboweni, in his budget speech last year, proudly announced that SA was "supporting private sector investments in agriculture by emerging farmers".
But he went on to allocate only R5.5bn — over a three-year period — towards land acquisition and the support of smallholder farmers.
We know that the support of agriculture is crucial if SA is to make any employment gains, given the skills we have. Yet the funding allocated to this sector has not so far matched the plans and aspirations the government keeps announcing.
For his part, President Cyril Ramaphosa, in his state of the nation address this month, announced that the government would release about 700,000ha of state land for agricultural production, and that SA would look to agro-processing as an area of job creation.
This means we have to bring fiscal policy closer to such plans and announcements.
Are we doing that?
We know that about 409,000 pupils matriculated in 2019, and a significant number of them will be looking for work in this first quarter of 2020.
We have also heard numerous announcements of retrenchments since the year began. This all signals that the gap between job seekers and the jobs available in SA is set to widen even further.
Given the findings of the WEF, and in the context of workforce transformations, we have to ask: are SA’s businesses, government and workers being proactive about planning and implementing a new vision for the global labour market? Are we funding our efforts to support jobs appropriately, including in the area of policy development?
• Payi is the founder of Nascence Advisory & Research
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