No job creation plan by govt can save SA now – economist

South Africa is in the midst of the worst bout of mass retrenchments since the 2008 global economic crisis, but this time the problems are completely self-inflicted, said economist Dawie Roodt.

The South African Federation of Trade Unions (Saftu) has launched an onslaught on austerity, which it blames for the jobs purge.

According to Roodt, culminations of nearly a decade of bad decisions by government and a series of unfortunate events have created a hostile environment for businesses to operate in.

He believed businesses were packing it in and retrenching in droves, affecting about 10,000 workers so far – and no amount of job creation plans by government could save the country now.

South Africa’s economy was suffering a slow puncture and there were multiple holes to plug before one could stimulate economic growth again. One such fix, which was glaringly obvious to Roodt, was for President Cyril Ramaphosa to replace his job creation plan with one that stimulated business growth.

“We need to fix the environment businesses are operating in. We need to create an atmosphere that makes people want to open for business – and that is why I am very sceptical of politicians talking about job creation,” he said.

Generally, retrenchments were cyclical in a healthy economic system and could even be a good thing, Roodt said, because they were usually followed by the opening of new businesses.

But in the case of South Africa, these mass job cuts were a sign of a broken system.

Businesses’ operating costs were skyrocketing, confidence was at an all-time low and shareholders were protecting their wealth.

Another dynamic to this, he added, was that the timing of these retrenchments was very likely no coincidence.

It was common practice for companies to choose a time when other companies were also retrenching, so as not to appear to be the only ones making cuts. This was not to say that there were not valid reasons to retrench, but it was likely that businesses had been delaying the inevitable and were simply taking the opportunity to make cuts.

Austerity, capitalism and the greedy “one percenters” were behind the job cuts, argued Saftu general secretary Zwelinzima Vavi.

Joining forces with the Association of Mineworkers and Construction Union (Amcu), the federation launched the “Cry of the Xcluded”, a campaign which they hoped would become a movement mobilised by working unions and civil society against anti-poor policies, retrenchments and a myriad of ways the government and private sector had failed South Africa’s workforce.

“We are not a socialist movement. We are an anti-austerity movement,” said Vavi.

“The forthcoming programme of austerity, liberalisation and privatisation will see new waves of job losses,” their manifesto reads. “The majority of school leavers, even those that have passed their matric, will swell SA’s mass unemployment levels.

“Even Stats SA’s conservative figures for unemployment – the country’s national statistical service counts even survivalist activity as gainful employment – registers unemployment at almost 40% when discouraged workers are counted. This is one of the highest in the world.

“And as unemployment rises, poverty worsens and inequality gets intolerably dire.”

On Tuesday, Stats SA’s quarterly labour report showed that unemployment in the fourth quarter of 2019 remained unchanged from the previous figure of 29.1%.

But with the current retrenchment drive and several large employers in business rescue, liquidation, or downsizing, unemployment could reach 43% by the middle of 2020, according to capital markets analyst Peter Montalto.

Also joining the “Cry of the Xcluded” campaign was community activist Nonhle Mbuthuma, founder of the Amadiba Crisis Committee, an NGO fighting against mining multinationals attempting to extract titanium off the dunes of the Wild Coast.

She said she supported the movement because, in her view, South Africa’s mining industry was not only exploitative of its workers, but of the environment and the communities its activities affected.

“We decided to join Amcu and Sadtu [the South African Democratic Teachers Union] because we can see this crisis that the country is faced with and we know that the upcoming budget speech is not going to address them,” said Mbuthuma.

“[Finance Minister Tito] Mboweni’s budget, rather than doing something about climate change, will all be about creating the climate so loved by the businesspeople where they pay less, but profit more.”

– simnikiweh@citizen.co.za

For more news your way, download The Citizen’s app for iOS and Android.