Such a fascinating question.  Please contribute to our understanding.

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5 thoughts on “HOW ARE JOBS CREATED?

  • Brian Moores-Pitt Post author

    Hi Sylvia,

    Thanks again for your thoughts.  I guess the definition of “jobs” is relevant even if they are classified as “temporary” and “permanent” or short term and longer term.  Both, however, are surely better than no job.

    As one might expect, the unions focus on defending their position as not causing job losses but fail to clarify how they contribute to job creation.  Of course, one asks the same question of all major role players who purport to be so busy trying to address the problem. 

  • Sylvia F. Hammond

    In my research on emerging contractors in the construction sector, one paper suggested that when rates are low, skilled people simply choose not to be in employment and work for themselves.  That way, there’s a fair chance that they avoid paying tax and therefore manage on less.  When the economy picks up or there are big projects on the go, extra skills are required, there’s a shortage of skills, rates rise, and they come back into employment because there is a cost benefit. So statistics that state that there are jobs lost in the construction sector – especially after the world cup infrastructure projects, really isn’t realistic.  Those weren’t “jobs” – they were short-term project jobs. Maybe we should start to define the concepts of “jobs” more closely.  Like retailers who raise prices, then reduce them back to where they were before stating that they’re on sale and a bargain! 

  • Sylvia F. Hammond

    Hi Brian,

    Well, I have the Cosatu response to the Adcorp report – published in Cosatu Today 13 September 2011.  I’ve just copied in full. So we can continue to discuss.

    “COSATU strongly believes that the Adcorp Holdings report being punted in the media is part of the company’s ideological warfare against organized workers in this country.

     The report is part of a political agenda to bash unions under the pretext of maximizing opportunities for business to create jobs.  

    Whilst we agree with the finding that the South African labour market continues to shed jobs at a shocking rate, we nonetheless find many of their postulations problematic.  

    The Report contains four “findings” which we find highly questionable.  

    The first claim is that South Africa’s unemployment rate is actually lower than the official figure which is approximately 25% and 36% when using the more accurate expanded definition. 

     Cosatu has consistently raised concerns about the distortion caused by the exclusion of discouraged work seekers from the official definition of the unemployed.

    As a result, we have argued that unemployment rate in south Africa is well near 40%, when we combine the official unemployment statistics as well as the numbers of discouraged work seekers.        

    We thus find it ridiculous that Adcorp can allege that our unemployment rate may be as low as 8% when considering workers in the informal sector.  

    This is particularly problematic considering the fact that informal sector workers are amongst the most vulnerable workers who do not have any access to social security and work benefits. These workers lack a stable and reliable source of income and are constantly harassed by the state and its repressive apparatus in the form of the police under the guise of creating “world class cities.” 

    Informal workers such as car guards, parking attendants, street vendors, those who push trolleys for customers in shopping malls in South Africa struggle to meet their basic needs and remain economically marginalized. The mere suggestion that these workers who form the poorest strata of the working class must pay some form of taxes is simply uncanny.  

    The report also undermines the extent to which the bourgeoning informal sector in South Africa is as a result of the jobs that are shed in the formal economy and the failure of the economy to absorb new entrants into the labour market.  

    The second problematic area in the report is the suggestion that strikes are the major causes of job losses in South Africa. This suggestion is outrageous  for a number of reasons.  Black workers were not recognized as workers under apartheid until the late 1970s. The recognition of the right to collective bargaining and strike only came as a result of fierce workers’ struggles, notably the 1973 strikes.  

    Additionally, strikes are ultimately the only power that workers have over greedy capitalist vultures that refuse to give workers a fair share. The right to strike is enshrined in our constitution and it was earned through blood and suffering. The suggestion that workers should cease this right is despicable to say the least.  

    Thirdly, the report argues that high unemployment is not a legacy of apartheid but rather a creation of the democratic government. This argument is maliciously oblivious to the deliberate denial of education and skills to the black majority by the apartheid regime for the better part of its reign. It is also insensible to the fact that the apartheid state guaranteed industry a cheap pool of black labour both through inhumane laws and severe repression. The fact that black unions were not recognized until 1979 meant that many black workers could not freely bargain for wage increments and negotiate their conditions of work.  

    Lastly, the report also discounts the impacts of neoliberal practices such as privatization, exchange control relaxation and outsourcing, which were already evident in the last years of apartheid rule, on job losses and unemployment.

     The same policies that companies such as Adcorp advocate for are responsible for the job-loss bloodbath and the flight of domestic industries to international markets, leaving many people unemployed and robbing government of revenue.

    If there is any positive aspect of the report it is that it debunks the myth about the rigidity of our labour laws. How is it that our labour laws are too rigid and yet as many as  50 000  people can lose jobs in a month? How rigid is the labour market when according to the same report a shocking 30% of workers are employed in temporary jobs.

    Adcorp employs largely dubious and statistically questionable methods of gathering data. Despite our reservations with Statistics South Africa (Statssa), especially the exclusion of discouraged work seekers in the official definition of unemployment, we have more faith in the latter than the unscrupulous reports released by Adcorp.

     COSATU is convinced that all the misleading arguments contained in the Adcorp report are nothing but an onslaught on the working class aimed at undermining labour rights and clearing the field for labour brokers. Adcorp hopes that by bashing trade unions and eroding labour rights, they can manage to return the country back to the terrible times of apartheid where black workers were mere instruments of production without any rights.

     Workers in this country paid a huge price for our freedom and we will not allow a propaganda institute such as Adcorp to succeed in its attempts to divide the working class and erode our gains.  COSATU is unshaken in its demand for the banning of labour brokers and the struggle for a Living Wage.

  • Brian Moores-Pitt Post author

    Thanks for your input Sylvia.  Strange that others are so reluctant to put their toes in the water.  I wonder how many politicians and union folk have an holistic answer to this?  Still insist on chucking money at it though as if that is the requisite state contribution!

  • Sylvia F. Hammond

    Hi Brian,

    Interesting question.  This is a direct quote from today’s Business Day Business Report – 12/09/11.

    “Another 49,306 jobs were lost in August, the fourth consecutive monthly decline, while only government created jobs, according to the latest Adcorp Employment Index released on Monday.

    “… While overall employment declined by 2.1 percent in August – the fourth consecutive monthly decline – employment by government continued to rise, by a notable 6.2 percent,” Adcorp said in a statement.

    “Adcorp considers that one of the prime reasons for the nation’s dismal employment picture is that government is crowding out private sector participation in the economy.

    “The public sector now accounts for all the job creation in the economy for 2011 as a whole,” said Loane Sharp, Adcorp labour market analyst.

    August employment declined most sharply in the manufacturing (19.9 percent), mining (19.3 percent) and construction (16 percent) sectors.

    “The unofficial sector continued to create jobs, employing 16,917 additional people in August, enhancing the ‘informalisation’ of the country’s workforce.” “

    So my understanding is that the jobs currently being created are being funded from tax payers’ money.  From a left wing perspective, that is a re-distribution of wealth exercise.  From a capitalist point of view, that’s not how jobs should be created.  So it literally depends on the “point of view”.  Look forward to members’ comments.