Will the Jobs Summit deliver?

The Jobs Summit kicks off on Thursday, and I hope its prominent themes include the negative cross-sectional connection between the lack of jobs and rising social unrest. As the International Labour Organisation’s annual World of Work report notes: “job instability is, above all, a human tragedy for workers and their families.”

Given this context, pressure is mounting on the Jobs Summit to come out with policies that are realistic, implementable and achievable. The newly elected leadership of the Congress of South African Trade Unions (Cosatu) is already cautioning against the hype, saying it might be “just another” talkshop.

In reality, it is still very hard for the average Joe and Jane to find or retain a job in this economy. August and September battered the economy in what social media calls being ‘shown flames”. The graph below shows that the South African economy was moered (‘hit hard’) in the first and second quarters of the year.

Source: Stats SA

The deepening recession and weak performance in key sectors means the economy shed jobs instead of creating them. It’s been estimated that in just two quarters more than 100 000 South Africans became unemployed. When considered against the share of the unemployed who have been looking for work for years and are now discouraged, a picture of an economy that is unable to cope emerges.

Against this backdrop, the country’s long-term unemployment crisis and substantial policy interventions should be the focus of the Jobs Summit. If the ongoing labour market weakness isn’t addressed, the inability of our young graduates to find jobs will continue to add to the increasing unemployed. More alarming is how the unemployed overshadow any job opening in the economy, with the private sector claiming it is unable to find suitable candidates because of the mismatch of skills to job needs.

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This shouldn’t come as a surprise, the country’s economic performance and growth remains remarkably weak compared to other emerging economies. Even among our Brics partners (Brazil, Russia, India, and China, plus South Africa), from an economic performance perspective, South Africa is the weakest link. No wonder some in Africa (Nigeria) question our legitimacy as the voice speaking for Africa at principal events such as African Growth and Opportunity Act (AGOA) gatherings.

It’s understandable. Africa’s supposed biggest economy is in a perpetual period of economic and policy inferiority that appears not to be coming to an end, not even with the ANC’s ‘Thuma Mina’ campaign (‘reconnecting with the people’) and an administration that is on one of the most aggressive investment drives contemporary South Africa has seen.

For the ordinary citizen, and more so for the unemployed, the motives for – and the political and economic consequences of – the Jobs Summit must be about creating jobs and stopping the current haemorrhage. If it does not address these issues, it will be about empty words that came at an expensive price.

That we even need a Jobs Summit is an indication of policymakers who are cornered and have been reluctantly persuaded by the irrefutable numbers from Stats SA regarding the almost collapsing state of the economy – an economy that is carrying the unemployed and those lifted by the social grants net.

Well, the net will not withstand that weight for long.

What is critical for the Jobs Summit is that, politically, anything but the boldest reforms on the labour market have to consider two aspects – firstly, will organised labour agree to it, and secondly, if it favours the flexibility the private sector has been clamouring for, it cannot have loopholes that will allow exploitation or misuse.

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Furthermore, any central outcome that does not incorporate mechanisms to safeguard present jobs and create good new jobs will fail: it takes quality employment to provide the economic security needed to reduce dependency on grants and give families the means to move out of the lower-bound poverty line where they no longer have to sacrifice food to cover non-food items such as transport. We have learned through Stats SA’s Poverty Trends report that although ‘social wages’ have had a positive impact with regards to reducing poverty, they are not sufficient and can never replace the value of quality jobs.

The common-sense view to come out of this Jobs Summit must include but not be limited to a nationwide job creation initiative that does not focus on economic hubs only. It is a truism that we have provinces that are oversaturated while others are almost ignored when it comes to creating jobs. Policymakers are going to have to push back against the impact of capitalism that swoops in, creates jobs, and leaves once it has extracted enough profits, leaving the area desolate.

Finally, and possibly critically, this Jobs Summit must stay away from promises of government-created jobs. This is unsustainable, given the already overstuffed public sector, government debt, and rising wages. That approach is not working and will not work.


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