Unemployment figures not surprising – COSATU

Federation says govt has no coherent plan to create jobs

COSATU statement on the latest unemployment figures

31 October 2017

The Congress of South African Trade Unions has noted the latest unemployment statistics according to the quarterly labour force survey that shows that the unemployment rate remains at 27.7% in the third quarter.

This is not surprising when considering the fact that currently there is no coherent plan to address unemployment and create jobs by the South African government.  Government has no plan to resolve South Africa’s structural unemployment. Our jobs are disappearing as a result of changes in the structure of the economy and also because the available labour does not have skills or education to occupy existing posts.

This cannot be resolved through wishful thinking but needs deliberate planning and imaginative policy formulation by government. Traditionally, the SA economy has been based on export of raw materials in the agricultural and mineral sector underpinned by cheap labour and slave wages and not on technology. The majority of the population was discouraged and prevented from occupying skilled jobs through the colour bar act.  

The results of discriminatory labour market policies have resulted in huge skills deficit and lack of competitiveness that is caused by lack of investment in education and skills and technology by SA companies.  The legacy of discrimination has continued to exist with mainly black and coloured workers being restricted to manual labour because of lack of training and education.

Since the adoption of the NDP by the ANC led government in 2013, the country’s fifth administration continues to preside over economic contraction and job-losses, despite the fact that the mandate from the ANC 53rd Mangaung Conference was for urgency and determination in turning around this trajectory in pursuance of the radical second phase of our transition.

As COSATU , we still continue to argue that the advent of the NDP represented an end to the attempt to forge an alignment of the macroeconomic policies, in particular the monetary policy, with the industrial policy and job-creation as proposed in the New Growth Path. The NDP chapters on macroeconomic and labour market policies continue to represent a return to the same old failed conservative policies inherited from GEAR.

One of the major policy failures was to allow free movement of capital which entailed allowing SA companies to take profits produced by SA labour from the Republic to other countries and taking away the government’s power to regulate export of capital and to limit imports. This gave space to SA companies to deprive SA of the much needed capital.

We fully agree with Stats South Africa that black Africans and coloureds require more intervention from the state to help them move out of poverty compared to white and Indians/Asians. This means that we must urgently revisit our employment equity laws and BEE laws to re-define and establish a hierarchy of historically disadvantaged persons and economically marginalised to ensure that the beneficiaries are firstly blacks and coloured and then others.  Current policies have clearly benefited white women and Indians /Asians and have entrenched the apartheid colour bar rule in the workplace whereby firstly white women are given training and promotion opportunities followed by Indians.       

This unemployment situation is likely to get worse because there is currently no sense of urgency in discussing and developing responses to automation and mechanisation in the country. The technological advancement in robotics, automation and artificial intelligence is only welcomed if it makes the life of the workers better. Replacing workers with machines will indeed make the plight of workers worse and we therefore need a government led intervention to cushion the workers from the effects of this so-called fourth industrial revolution.

Currently, the South African Labour law allows firms to dismiss workers because of adoption of technology; section 189’s definition of operational requirements includes adoption of technology. Already the law favours the replacement of labour with capital/machines.  

It is for this reason that we have called for changes in the law which must make it difficult for employers to use technology to replace labour. Currently employers are incentivised to use technology to get rid of labour with impunity and the CCMA has little role to play other than committing parties to consult.

We are calling for the Department of Labour to amend the law in order to require all retrenchments to be referred to CCMA for approval than merely notification and consultation. The tax laws must be changed to ensure that those firm that use machines to replace labour are denied tax deductions.

The current law is very generous to firms or capital because for example re-skilling of workers is optional. Despite firms receiving tax credits for training they are not interested in re-skilling workers. The so called fourth industrial revolution is used to scare government from regulating firms and control how they introduce technologies.

The auto sector is a recipient of government assistance yet it continues to increase its use of robotics. According to UNCTAD the automotive sector is one of the biggest buyers of robots. We need to change our labour and tax laws in order to address negative effects of technology on labour and on consumers.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 31 October 2017