Monday, June 29, 2009

State religion does not have all the answers to jobs crisis

OUR state religion appears to be the worship of the state. Heaven knows, to sustain the analogy, there now appear to be no shortage of new and unlikely adherents to this belief. Barack Obama’s administration is now effectively the controlling shareholder of General Motors and Gordon Brown’s government owns 70% of the Royal Bank of Scotland. The deep global recession has created some unlikely converts from unfettered market capitalism to more state directed economic leadership.
But, back home in SA, as I surveyed the jobs massacre contained in the figures for the first quarter released this week, which show that 179000 jobs were lost and that the “distressed labour market” could yet shed another 200000 jobs before year-end, it occurred to me that what we need now is a healthy dose of local agnosticism in order to innovate and create new work. In other words, less ideology and more realism.
Last Friday, Economic Development Minister Ebrahim Patel appeared to make an important concession: he said that government’s policy of promoting “decent work” would not exclude “the creation of temporary, low-paid jobs in the short term”. He made the further concession that the 500000 jobs to be created under the expanded public works programme “would not, in themselves, be proper, permanent, well-paid jobs”, but they could create a bridge into the labour market.
This dose of realism seemed to be in line with the candour of Trevor Manuel , who in his previous incarnation as finance minister said, after presenting his last budget in Parliament, that the problem with “decent work” in a time of crisis was that “all jobs are hard to come by, and the more adjectives you add, the harder they will be”. Or, as the old adage expressed it, the only thing worse than being exploited is not being exploited at all.
Whether these statements represent shafts of light or a false dawn on the gloomy debate around job creation is difficult to assess. This becomes even more apparent when the assault launched by Labour Minister Membathisi Mdladlana on labour brokers and the casualisation of work is taken into account. Last month, he told the congress of the National Union of Mineworkers , “the reality is labour broking is a form of human trafficking. These companies sell the labour of workers to the highest bidder and then pay them the lowest wage ... it allows workers to be traded for profit just as if they were meat and vegetables.”
When I visited the headquarters of the largest private employment agency in SA, Adcorp , this week, I expected after the minister’s pronouncement to find a Dickensian pit of human misery. Instead, the ultramodern office block in Bryanston houses a go-ahead company where I had an interesting discussion with the splendidly named Loane Sharp, who serves as the company’s labour market analyst.
He made the point that the much-maligned labour brokers represent a R23bn industry, which since 2000 has introduced about 3,5- million temporary, part-time and contract employees into the labour force, approximately 2- million of whom are first-time jobseekers, 92% of whom are African, and 85% of whom are aged 18-35. Of even more significance was his analysis that a third of these employees secured traditional permanent jobs within a year and 47% did so within three years.
In other words, far from being reprehensible and “human traffickers”, the brokers are, in fact, SA’s principal entry point into the labour market for unemployed African youth.
Sharp’s analysis runs counter to the Congress of South African Trade Unions’ (Cosatu’s) blunt instrument: they are calling for a ban on labour broking, which could lead to the loss of, perhaps, a million jobs. The labour minister is advocating the quasi or de facto nationalisation of private employment agencies. But the agenda behind this agenda is, simply, that the bulk of these temporary or casual workers are nonunionised. They, therefore, compound Cosatu’s crisis of relevance and its shrinking membership and revenue base.
Another voice, which deserves to be heard is the estimably sensible one provided by Ann Bernstein and the Centre for Development and Enterprise/Business Leadership SA’s “5- million jobs initiative”. They offer a welter of practical initiatives to resolve the exquisite Catch 22 in which the vast pool of young, unskilled jobseekers find themselves. As Bernstein put it: “They can’t get a job because they have no work experience and they can’t get work experience because they can’t get a job”.
The most persuasive statistic the centre provides to bolster this assertion is the fact that more than 70% of 15-30 year olds who want a job have never been able to find one.
To quote the vanquished Thabo Mbeki , the crisis on the job front calls for a “business unusual” approach. And that means that adherents to the old gospel of the state religion need to listen to a few agnostic voices.

*Published 26 June 2009 in Business Day

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