South Africa’s Economic Growth Rate Too Low to Create Jobs

Workers’ Day started as a commemoration of the struggles that workers had to overcome during their campaigns to improve working conditions. These struggles often ended in bloodshed and death of workers as they demanded better treatment. It is often also associated with the trade union movement that organised workers and fought for their rights since the late 1800’s.

Unions started out to improve the working conditions of workers especially those who worked in dirty and unsafe factories. It also started to bargain on behalf of workers for a fair wage and later started entering politics.

Although the initial purpose that brought about labour unions was noble, one could argue that unions have morphed into organisations reaching beyond its core function in society.

However, we cannot talk about Workers’ day in South Africa without looking at employment. It is difficult to celebrate this day when a quarter of our population do not have employment opportunities available to them. In fact, this number is growing more working South Africans are joining the ranks of the unemployed.

A clear indication of this is the drop in labour union membership in the country. We have seen in the last year that large unions like NUM and SAMWU reported major drops in membership figures. This cannot be attributed to increased competition among labour unions alone, but is mainly associated with job losses.

These losses are a direct consequence of a lack of economic growth in South Africa. According to Mineweb/ Bloomberg:

“Even without labour upheaval, the growth prospects in Africa’s most industrialised economy are looking dire. The National Treasury expects the economy to expand less than 1% this year, undermining efforts to cut a 25% unemployment rate, while the nation’s credit rating is on the brink of being downgraded to junk. The risk of political turmoil is also rising

NUM has also been weakened by the firing of tens of thousands of its members in response to the commodity price slump. The mining industry employed 462,000 people in the final quarter of last year, 5.9% less than in the same period the year before, and down from a peak of more than 800,000 in the 1980s, according to the national statistics agency. Mining production fell for a sixth straight month in February, contracting an annual 8.7%, the agency’s data shows.”

In short, South Africa’s economic growth rate is too low to create jobs, in fact jobs are being cut as a result of this low growth.

However, this situation can be turned around. The DA launched its vision for South Africa in 2015 known as Vision 2029. As part of this plan the DA recently launched its five point job creation plan that aims to generate employment through the following focus areas.

  • Invest in integrated energy, transport and ICT infrastructure for job creation;
  • Give more people the education and skills they need to get a job;
  • Radically reform the labour regime to support job creation;
  • Provide direct incentives for job creation; and,
  • Create a nation of entrepreneurs by making it easier for South Africans to start and grow their own small businesses.

There is no freedom in poverty. There is no fairness in being kept poor. There are no opportunities for the poor.

We need to turn this around by establishing a society where individuals and business are free to access and participate in the economy instead of being restricted by unnecessary government regulation and red tape.

We must promote fair labour practices but not draconian labour laws. We need to provide proper education and training in order to provide equal access to employment opportunities for South Africans.

If we do this we can employ the 25% unemployed South Africans. Moreover, we could in future truly celebrate workers day rather than ignoring unemployment issues.


Media enquiries:

Fred Nel MPL

DA Gauteng MEC on Cooperative Governance, Traditional Affairs and Human Settlements

083 263 2427