Two ways to curb South Africa's jobs crisis

By Zukiswa Mqolomba

South Africa is currently facing a job crisis of epic proportions. The change in unemployment numbers masks even sharper deterioration in the labour market. Firstly, it masks the increase in the number of “discouraged work seekers” as individuals have given up hope of finding work. Secondly it masks the exponential increase in non-standard employment since the 1990s, which has eroded the quality of labour protection, denying workers and unemployed of the basic human right to a sustainable livelihood.

Informality, casualisation and externalisation of labour have undoubtedly worsened our job crisis. Employment has increasingly become insecure, poorly paid and largely unregulated, with few benefits and limited prospects for sustainable livelihoods. Not only have these weakened enterprise development, but these have made minimum wages less effective, as well as created a mismatch between skills and jobs available (especially for new entrants). The majority of the unemployed are low skilled or poorly educated workers, mostly women and youth in rural areas, for which demand has been shrinking due to changes in the domestic structure of production of the economy. The shift towards greater demand for skilled labour has been insufficient to absorb existing labour.

To address South Africa’s job crisis we need to, firstly, move towards labour-intensive approaches to production and, secondly, to promote local enterprise development.

Solution 1: Labour-intensive work
Bearing in mind that South Africa’s main assets are her natural endowments and surplus labour, South Africa’s new policy approach should emphasise the need for a policy shift towards labour-intensive production. The problem with past growth strategies is that they have, often than not, been too advanced and therefore unable to respond to South Africa’s pressing realities. For instance, South Africa has long faced a shortage of capital and an abundance of labour. However, past growth strategies have often favoured capital- rather than labour-intensive investment. Agricultural policies, for example, have often favoured production by capital- and land-intensive larger farmers and trading companies rather than targeting the needs of small farmers and landless labourers. The models pursued have, by consequence, been unable to meet the social needs of our populace.

This is not to say that South Africa should not make use of technological advancement or pursue aggressive skills-development regimes to meet the demands of changing domestic structure of production. Undoubtedly, building skills is an essential component to improve productivity, incomes and access to employment opportunities. However, this should be seen as the long-term strategy, as changing the skills profile of an entire generation of low-skilled people is not an overnight exercise and should therefore be pursued with the long term in mind.

Considering pressing constraints, South Africa’s employment strategies must recognise the necessity to re-orient growth strategies so that these become more employment-intensive. Where possible and desirable, the different sectors of the economy (modern, agricultural, and informal) should explore priorities and strategies for optimising development within productive and labour-intensive sectors (ie green jobs industry, infrastructure, agriculture, cultural industries, environment conservation, transportation, ICT, fisheries, forestry, trade and tourism development and maintenance) for the creation of jobs and poverty alleviation.

This proposal must, however, be examined in the context of optimal utilisation of local resources, technological developments, local planning, and community participation, as well as small-scale contracting and systems for maintaining rural infrastructure. A strategy to achieve this objective lies in allocating more investible resources into employment-intensive sectors, particularly in agriculture and the rural sectors, and the urban informal sectors.

Solution 2: Local enterprise development
Secondly, the promotion of community-based enterprises (cooperatives) and micro- and small- enterprise development remains central in pursuits to emancipate the rural poor. These can be used as tools to provide opportunities for the rural poor to generate their own income, particularly targeted at women, rural youth, unemployed youth and immigrants.

Cooperatives and small business enterprises have proved to be key organisational forms in building new models to combat social exclusion and poverty, for example through local development initiatives. Similar to political decentralisation, strengthening local economic enterprise is also particularly important as a function of the democratisation processes, allow broadened participation of citizens in the design and control of economic processes that determine their livelihoods.

Undoubtedly, meeting the challenges of globalisation require innovate thinking on inclusion strategies, which require strong local communities, strong local leadership and strong local solutions. South Africa should therefore prioritise local enterprise development (LED) approaches that stimulate local commercial and to strengthen local economic cycles, as well as build up the capacity of local economies.

Government should make a concerted effort to remove biases against the rural sector and other marginalised local economies, build comparative skills of regional actors: enabling them to tap into the comparative and competitive advantages of regions, the potentials of natural resources as well as the leadership of private-sector enterprise.

LED ventures should aim to empower local participants to utilise business enterprise ventures, labour, capital and other local resources to establish competitive advantage (ie production of agricultural and cultural artefacts, tourism, infrastructural development and/or maintenance) in order to create the necessary linkages between economic growth and employment creation in rural economies.

New cycles
At the end of the day, breaking the cycle of poverty in South Africa ultimately means creating new cycles of employment opportunities, as well as creating opportunities for local citizens to create wealth.

Zukiswa Mqolomba is a Mandela Rhodes Scholar, senior researcher, policy analyst and scholar activist working for government, and previously the World Bank in Washington DC. She has master degrees from the Universities of Cape Town and Sussex. Her ideological inclination is pan-Africanist. She believes in the African renaissance and that her generation of peers can make meaningful strides towards achieving it. She writes in her personal capacity.