Jobs up, but numbers not high enough-economists

More than half-a-million jobs were created in South Africa in the past year, a new survey said this week, but economists and labour warn it is not enough to make a serious dent in unemployment.

The 2006 Labour Force Survey conducted by the government's Statistics South Africa showed 544,000 jobs had been created in the 12 months ending March 2006, resulting in a modest decline in the unemployment rate by 0.9 percent to 25.6 percent.

The South African government's goal is to halve poverty and unemployment by 2014.

It's Accelerated and Shared Growth Initiative, launched earlier this year, aims to deliver economic growth of six percent. The Bureau for Economic Research at the University of Stellenbosch forecasts growth at 4.5 percent in 2006/07, slightly down on last year's 4.9 percent.

"At a glance there seems to have been a very big increase in employment, but if it is put into perspective it is not so dramatic" said Azar Jammine, an economist at Econometrix, a South African economics consultancy. He pointed out that most of the new jobs were created in the first half of 2005 in the agricultural sector and were seasonal.

"While there has been an improvement in the employment rate, but the rate at which jobs are being created is not sufficient to keep up with the number of students leaving school every year," commented Johan Botha, an economist with the Standard Bank of South Africa.

He noted that at least 500,000 students wrote the school-leaving exam last year.

A recent survey by the South African Graduate Development Association found that graduates were the fastest growing group swelling the numbers of the unemployed. It's findings were backed by statistics from a marketing company this week, which showed that up to 30 percent of university students in South Africa were unable to find jobs after they graduated.

The problem, Jammine pointed out, was that the economy's direction was towards creating businesses that were service, knowledge and skills intensive, while the "profile of the South African workforce is largely unskilled at the moment".

Recognising the need, the government has launched the Joint Initiative for Priority Skills Acquisition to address the shortage of skilled labour.

It has set skills acquisition targets in various sectors, for example, increasing the number of engineers by 2,400 a year and the number of skilled artisans by 50,000 over the next four to five years.

However, the Congress of South African Trade Unions (COSATU) is demanding more action on job creation. "If we are to meet the government's modest target of halving unemployment by 2014, we need to reverse the loss of jobs in the sectors that are shedding jobs and create far more new, sustainable and quality jobs, particularly in manufacturing, at a far faster rate," the labour federation has warned.

The International Monetary Fund projects a required annual growth of at least seven percent to meet the UN's Millennium Development goals of halving poverty by 2015.

Mozambique and Angola are the only two Southern African economies to have achieved the target.

Economists have blamed South Africa's stringent labour legislation, which makes hiring an expensive proposition for small-scale companies, and have suggested that government relax legislation to enable small firms to easily hire and fire.

Labour Minister Membathisi Mdladlana has been holding meetings with business and labour to review legislation, said his spokesman Mokgadi Pela. Mdladlana has also expressed concern at the quality of jobs being generated and has described unemployment as a "ticking time bomb."