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Send  Share  RSS  Twitter  14 Jun 2011

LABOUR: Market Competitiveness Decline


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This month’s Adcorp Employment Index, released by human capital management group Adcorp Holdings yesterday, shows that employment in South Africa declined in May, while over the past year its labour market competitiveness fell by 8,1%.

Loane Sharp, Adcorp labour market analyst says: “Employment dropped last month at an annual rate of 2,5% and we ascribe this decline – the first in five months – to a significant drop in employment in the construction (-20,1%) and manufacturing (-11,0%) sectors, as well as a small drop in government employment following the local government elections (-2,7%) last month.”

Adcorp highlights that a sharp division occurred between high-skilled employment (which increased by 4,5%) and low-skilled employment (which declined by 3,7%). Employment of machine operators and elementary workers dropped sharply, by 14,9% and 12,9% respectively.

In this month’s Adcorp Employment Index, which reports on employment in South Africa for the month of May, Adcorp draws attention to recent World Economic Forum (WEF) data revealing the reduction of South Africa’s labour market competitiveness.

Says Sharp: “The WEF has revealed that South Africa’s international ranking fell from 123rd (an effective score of 11,5%) in 2008 to 133rd (4,6%) in 2011 in terms of the competitiveness of the country’s employment market.

South Africa’s labour laws and regulations are now the 7th most restrictive out of 139 countries in the world. According to a survey of the world’s 1 000 largest multinationals, restrictive labour regulations are the 4th most problematic factor for doing business in South Africa.”

Referring to the National Planning Commission’s recent report, Sharp says the NPC maintained that there was widespread agreement – including such authorities as the International Labour Organisation (ILO), the Organisation for Economic Cooperation and Development (OECD), and the International Monetary Fund (IMF) – that South Africa’s labour laws “are not the principal cause of high unemployment. […] These laws are not overly rigid relative to either developed or developing countries.”

They were conclusions that led organisations such as the Congress of South African Trade Unions (COSATU) to argue that “[labour market] deregulation will neither enhance overall flexibility nor lead to a substantial improvement in employment”.

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