“In November and December employment ticked up by about 24,000 jobs, but the overwhelming majority of those jobs were in the informal sector. The formal sector continues to struggle for the year as a whole [in] 2013. Permanent and temporary jobs declined by over 240,000 for the year,” Sharp, Adcorp Labour economist, told CNBC Africa.
“The indications are that we’re going to see similar difficulties in 2014. Many of the issues in the labour market – the emergence of rival trade unions, strike-related violence and intimidation, a potential breakup of Cosatu – none of these things were resolved in 2013 and they’re going to play out this year.”
Sharpe added that he expected increased strike activity this year, as well as increased production disruptions and possible a more difficult year than the last.
He additionally explained that the country’s Further Education and Training (FET) colleges were in shambles, and that government is wrong in putting money into their development. FET colleges provide vocational or occupational courses towards a specific range of jobs.
“Certainly the economy needs to grow at least four per cent per annum, just to absorb the school leavers leaving the secondary education system each year. We’re not looking at anything like that economic growth, it’s not going to happen. You could call it a target of six million jobs, call it a wish,” said Sharp.
“I really think it’s just a wish, because there’s no concrete action around the labour market. The issues in the labour market relate to regulation, and there’s almost no chance of deregulation.”
Sharp explained that the country’s university systems were much more functional than the FET colleges. He however mentioned that the universities had begun directing students more towards the arts, humanities and social sciences.
Sharp explained that these fields were not as relevant to the workplace as others fields were.
“The universities, in a cartel-like arrangement with the professional bodies, are not producing sufficient engineers, doctors, lawyers, accountants and so on. The growth rate of professionals leaving university is just between 0.1 and two per cent,” said Sharp.
“The university system is a much more beneficial platform to [then] divert government resources to the FET colleges. The colleges do not improve their graduates’ chances of finding a job. You’ve got no better chance of finding a job graduating from an FET college than simply with a matric.”
Matriculation, or matric, is the final year of high school in South Africa. Learners planning to enrol into university are required to have completed the year.
Job creation will be a pertinent promise as South Africa prepares for its presidential elections this year. Many however argue that job creation will not be beneficial if the necessary conditions in order to create jobs are provided. Education is one such necessary condition.
“I think government is unnecessarily afraid of the idea of labour market deregulation, which is really the true source of job creation for South Africa. There are really two labour laws that are problematic: the first one relates to dismissal protections it’s very hard to dismiss a poor performing worker because of the threat of the Commission for Conciliation, Mediation and Arbitration (CCMA) action,” said Sharp.
“We’ve got to eliminate dismissal protections, but we’ve also got to revise our collective bargaining system, which drives wages way above labour productivity. Those are the two things that need to be handled, and they’re not as politically explosive as they seem. That would go a lot further in creating jobs in South Africa than these wishes that we see.”