Western Cape Business News

Send  Share  RSS  Twitter  09 Dec 2011

LABOUR: Job Growth Tempered by Uncertainty


Recent Western Cape Business News

Total employment grew at an annual rate of 3.41% last month, the fastest rate of growth in eight months, according to the Adcorp Employment Index for November.

The index, released yesterday, showed growth across all employment categories, the fastest being the informal sector which saw 4 percent growth. Temporary work grew 3.8% while permanent jobs increased by 2.8%.

Agency work experienced the slowest growth rising by just 2%, which Adcorp labour market analyst Loane Sharp said could be a reflection of legislative and regulatory uncertainties regarding labour broking.

We saw significant job gains in distribution and logistics (+18.1%) as well as in the retail and financial services sectors at +8.7% and +8.2% respectively, partly reflecting seasonal patterns. By contrast, steep declines in employment were observed in mining (-15.7%) and manufacturing (-5.4%),” said Sharp.

The latest index also revealed an escalation in the demand for skilled workers, notably managers and professionals, reflecting the South African economy’s ongoing re-orientation toward high value-added services sectors. Even clerk and service worker jobs increased.

Said Sharp: “While our index for November certainly showed steady growth, unemployment in South Africa remains extremely high.”

Sharp also expressed concern over South African productivity levels: “This year labour productivity in South Africa fell to the lowest level in 40 years and labour’s share of national income is at a 50-year low.

Government should attempt to address legislation which places an unnecessary burden on productivity. Two laws in particular needed to be addressed,” he said.

The first involves protections for workers against performance-related dismissals and the Commission for Conciliation, Mediation and Arbitration (CCMA) Codes of Good Practice.

Said Sharp: “Employers are finding it increasingly difficult to dismiss inept employees, yet these same employees continue to enjoy protection.”

Sharp said that many of the one million-odd jobs lost during the 2009 recession “for operational requirements” were, in fact, dismissals for poor performance which had cumulated and for which the recession provided a helpful guise.

The second law involves collective bargaining which forces wages to rise at an agreed rate for an entire sector irrespective of labour productivity. Included here is the statutory extension of bargaining council agreements to non-parties, effectively preventing non-party employees from offering their labour to employers at market- or productivity-related wages.”

The index reports that in the 15 years since the Labour Relations Act was introduced, after-inflation wages increased by 28.8%. Sharp said that this represents nearly treble the increase in the preceding 25 years and, that per unit of productivity, real wages have increased by 200% since the Labour Relations Act (LRA) was introduced.

As long as business struggles to employ labour in a profitable way employment in South Africa will remain a major concern,” he said.

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