What can be done to stop rising job losses?

While two of the country’s leading analysts yesterday conceded that the 28,000 formal sector jobs loss figure in the third quarter was bound to put more pressure on President Cyril Ramaphosa, they were split on whether austerity measures were the answer to South Africa’s economic woes.

Statistics SA (SSA) noted the formal sector employment decreased by 28,000 in September 2019, with 11,000 full-time and 17,000 part-time jobs shed during the quarter.

In its latest report released this week, SSA said SA’s unemployment stood at around 29.1%.

Stats SA said losses were seen in construction and manufacturing, which lost about 12,000 jobs each, while community services lost 11,000; business services 9,000 and transport 1,000.

Independent economist Thabi Leoka – a proponent of austerity measures – and political analyst Ralph Mathekga, an ardent critic, were miles apart on solutions Ramaphosa should adopt to address the economic meltdown.

While warning that unemployment was set to soar, Leoka argued that austerity measures which included staff complement downsizing in the public service was the way to go “especially if one looks at the huge wage bill”.

“There is likely to be more job losses because the economy is not doing well,” said Leoka. “The government wage bill is too high and we have to cut jobs in the public sector.

“We have to put austerity measures in place to restructure and shrink the deficit.

“What needs to be done may have political implications, but it is not about politics. It is about saving the country’s economy from more floundering.

“While reform is not easy as it may lead to more job losses – putting more pressure on President [Cyril] Ramaphosa – there is no alternative.

“What is needed is a stronger partnership between business, government and labour. Labour has to understand that there should be downsizing and be more accommodating.

“Corporate South Africa has to come to the party by employing more people.”

In countering Leoka, Mathekga said: “Losing jobs and implementing austerity measures is irreconcilable.

“Global trends indicate that no one recovers from an economic slump by implementing austerity measures – a policy direction which is currently a source of tensions within the ANC and its alliance partners.

“There is no doubt the economic situation will lead to tensions within the governing ANC.

“Undoubtedly, Ramaphosa is going to have a difficult presidency and the theory that former president Jacob Zuma messed up the economy is now no longer holding up.

“You cannot threaten to cut jobs at Eskom amid such huge job losses as reported by Stats SA this week.”

Mathekga maintained that presidential job summits “yielded nothing because they are third-party initiatives, with companies showing no sense of urgency in creating jobs”.

He added: “Any president who is in charge and the economy is performing the way it does should be very worried.

“If you keep on making reference to undoing damage done during the Zuma presidency, then you should have postponed your inauguration until such time things became normal.”

The Congress of South African Trade Unions (Cosatu) also waded in on the economic debate.

“This is very alarming considering that 10 million people of working age are officially unemployed,” said Cosatu spokesperson Sizwe Pamla.

“This high unemployment rate means that many South Africans do not have the purchasing power to drive the economy and create much-needed domestic demand.”

– brians@citizen.co.za

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