Hope for job creation

While the latest Quarterly Labour Force Survey paints a dire picture with regards to the unemployment crisis in the country, Employment and Labour Minister Thulas Nxesi believes that the basket of interventions will eventually lead to an improved situation.

“It would be foolhardy to paint a rosy picture, given the figures presented by Statistics South Africa, but the situation is not hopeless.

“In fact, the second quarter figures relate to the time when the lockdown was at the extreme and since then, the economy has opened somewhat, and more industries have since opened,” Nxesi said on Monday.

The latest figures show the second quarter devastation of the pandemic lockdown, which severely affected economic activity, and led to real gross domestic product contraction of 51%; a 47.9% contraction of manufacturing industry output; a 67.6 % drop in trade industry activity; a 76.6% decrease in building of both residential and non-residential buildings, and the halt of construction works.

Nxesi said in the face of all the negative figures, it is pleasing to note the role played by the Department of Employment and Labour, through the Unemployment Insurance Fund (UIF), which gave impetus to the economy through cash injections to workers.

In April and May alone, the department injected R32 billion into the economy to enable workers to survive the worst of the economic meltdown.

However, Nxesi acknowledged that a much more comprehensive government response is critical to lift the economy.

“That is why government has, with the support of social partners at the National Economic Development and Labour Council (NEDLAC) developed an economic reconstruction and recovery plan.

“This should place the country at the threshold of an important opportunity to turn the economy around and unlock the employment creating potential that we seek,” Nxesi said.

The Minister also noted that the most devastating impact has been on youth employment, which has seen the largest increase of 928 000 jobs shed in the 25-34 years age group; with the second largest (562 000) in the 35-44 years age group, and the third largest (416 000) in the 15-24 years age group.

“We are encouraged by the direct and positive intervention by the President, who has announced a Presidential Employment Stimulus designed to support a spectrum of opportunities focused on youth, people with disabilities, and women.

“In the first phase of this programme, government has budgeted R19.6 billion for the 2020/2021 financial year.  This is in addition to the existing employment programmes of government.

“More importantly, it will bring young people into the economic sphere, which is critical at the moment,” the Minister said.

Other entities of the department, who are also involved in the effort to mitigate the worst effects of the economic contraction, include:

• Productivity SA, which is involved in supporting companies in distress through the funds injection of R140 million from the UIF;
• The normal Temporary Employer/Employee Relief Scheme, which continues to provide support to companies in distress so that they can apply for funding to be able to pay part of wages and salaries, which is also funded by the UIF;
• The Commission for Conciliation, Mediation and Arbitration (CCMA), which has been working closely with companies and has helped save 20 434 jobs this year to date, from a possible 53 702 retrenchments, especially in the mining and transport industry; and
• The Compensation Fund, which has to date received 11 233 claims and has overseen a process of disbursing over R13 million for sickness, injury or fatalities on duty during the pandemic.

Nxesi said one of the critical pillars of government’s economic recovery plan, which has the potential for creating employment, is in the area of infrastructure development, whose focus will be on investment, delivery and maintenance.

To achieve this, the Minister said government is soliciting and attracting private sector investment in the delivery of infrastructure, as part of building broad-based public-private partnerships, as well as through the South Africa Investment Conference (to be held from 17 – 18 November 2020).

“The criticism has in the past been that government is good at drawing up plans, but not so good at implementing.

“That is what makes the current recovery plan different: the attention to process, coordination, monitoring and evaluation, and implementation – what the President refers to as ‘joined up government’, so that we no longer work in silos, but combine our efforts and resources to maximise outcomes and service delivery to our people,” Nxesi said.