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There is a jobs catastrophe in the pipeline – Hart

NGO launches jobs pledge for all to prioritise unemployment in SA. Targets 14.1 million jobs by 2030.

According to Investment Solutions’ chief strategist, Chris Hart, unemployment needs to be the top priority for every sphere of society. Otherwise, South Africa will continue on its path towards a recession, which he suggest is real possibility within the next year, if things don’t change. Hart was speaking at the launch of a jobs pledge, which looks to place job creation as the first and foremost concern for business, labour, government, political parties, NGOs, and all their supporting bodies and institutions.

Said Hart: “The economy is barely growing at this stage. Consumer demand is 70% of GDP, and so far we haven’t lost jobs, but there is a jobs holocaust in the pipeline…. Mining, manufacturing, tourism – all of these industries are struggling (to even retain jobs)… job creation over the next year is going to be extremely difficult.”

The jobs pledge was launched by newly formed non-profit organisation the Collaborative Stakeholder Movement (CSM) on Tuesday and can be signed on www.jobspledge.net. It challenges organisations to join hands in growing an inclusive economy through the ‘expansion, enhancement and preservation of jobs’, calling for 14 191 200 jobs to be created in South Africa over the next 15 years. That is, one job for every minute that Nelson Mandela spent in Jail.

Martin Humphries, the founder of CSM, said the aim was to ignite a nationwide commitment to reducing unemployment in the same spirit that every citizen seemed unified in the country’s hosting of the 2010 World Cup. The jobs pledge site seeks, among other things, to list all job creation projects currently running, and put corporates in touch with initiatives that may require funding, while also tracking the progress of jobs targets and giving awards for excellence in the fight against unemployment. Humphries said the jobs pledge was an effort to go beyond the ‘talk shop’ culture in South Africa where nothing is implemented.

“It’s a rallying call for South Africa,” said Humphries. “We are asking for positive intervention from all aspects of society, both at the individual level and the organisational level. We are targeting employers, and that is anybody that employs people. If you have a domestic worker, you are an employer”.

Hart said unemployment is a national emergency, explaining that the 26.4% unemployment level quoted in statistics excludes people that have given up looking for work, which is likely to be a significant portion. What is most alarming, however, is that 48% of people between ages 24 and 35 are unemployed. Again, this figure only includes those who are actively looking for work.

“It is at that age group where people are building careers. They are building families etc and there you’ve got about half of the population not participating in the economy. A normal figure would be closer to 18% or 19%,” said Hart.

Three mistakes

Hart attributes this concern to three mistakes South Africa is making. One is the incidence of labour unrest, which is not unique to this country, but is unusually excessive and invariably leads to job losses. For this he suggested secret strike ballots that would allow workers to vote on whether to go on strike without fear of violent union members. This, he said, would also make company leadership more accountable because shareholders would know that the last resort of going on strike would be a majority view – reflecting poorly on management – and not simply the result of intimidation.

He also said regulation seems to stifle job creation rather than promote it.

“There seems to be an over-prioritising of other problems…. Regulations are crafted in such a way that they require economies of scale to be compliant and that means you’re shoving small and medium businesses out of the economy,” said Hart, citing the Department of Home Affairs’ new visa requirements as one of the many instances of regulations (quite literally) increasing barriers to entry as opposed to reducing them as they would if job creation were the priority.

The third concern for Hart is taxation. Particularly that South Africa’s tax regime targets capital formation and investment viability. He said incomes are already heavily taxed, and this makes it difficult for households to save.

 “South Africa’s capital deficiency is due to its poor saving culture. First of all, people have less money to begin with, but then when they do try to put that money to use in terms of investments, they are taxed in terms of capital gains tax,” said Hart.

“There is no other way to bring economic activity into existence other than investment, and there’s no way of funding investment other than through saving.”

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wasting your time and breath! until the govt takes firm action against illegal immigrants taking jobs away from locals (at very low rates), until govt considers srapping the minimum wage, until govt discovers that business is the way to generate jobs, and until govt accepts massive infrastructure (not eye boggling headlines for a nuclear station which the country can”t afford) is the only way to produce meaningful change. BUT all the govt is capable of doing is more jobs for the boys and girls, fancy pay outs, massive increase in public service employees. until this happens there will be more of the same with a slow rush to the bottom – with the EFF picking up lots of votes along the way

The private sector’s business is not to create jobs. Its business is to make a profit by providing a service or producing something. The jobs created is as a result of a profitable business which is result of a sound business environment for businesses to operate. Sound business ( Investment) environment is low taxes, limited regulation, private property laws, low crime, essential services such as water , electricity and roads and resources ( labour of appropriate skill). To simply call on the private sector to create 14 million jobs illustrates the real problem in south africa. There is a good number of people that does not use logic , do not understand economics. These people is in key and high positions. Their logic states that the minutes spend by Mandela in jail should be the number of jobs created. Should we laugh or cry?

“Otherwise, South Africa will continue on its path towards a recession…”. Are you kidding? Please, the time for such fluffy, PC language is over. You should have continued using the word “holocaust” to describe what is coming. You mention that “48% of people between ages 24 and 35 are unemployed”. What about the 49% of the population who are under the age of 24? Where will they ever get jobs. Call the situation what it is please. At least pay us that courtesy!

End of comments.

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