2005-11-22,+Poor+see+different+side+of+boom,+Makgetla,+Bday


 * Business Day, Johannesburg, 21 October 2005**

= Poor see a different side of economic boom =


 * Neva Makgetla**

EVERY Monday this month, the Congress of South African Trade Unions (Cosatu) has organised provincial demonstrations and stayaways to protest against high unemployment, mass poverty, and racism in the workplace. These actions reflect rising frustration with the persistence of these ills more than 10 years after liberation.

But they also give ordinary people a voice in policy processes, which otherwise remain the preserve of the powerful, the rich and the highly educated.

If you read only the business press, the substantial support for Cosatu’s actions may seem odd. After all, we hear regularly that the economy is booming and that job creation is picking up.

But standard economic statistics underplay three fundamental problems. First, the poor still do not benefit adequately from economic growth. Second, only an extraordinary expansion in the job market can dent unemployment levels. Finally, the permanent positions that form the core of the black working class seem to be continually under threat.

Historically, deep inequalities in income, assets and opportunities have meant that most South Africans get relatively little benefit from economic growth. As of 2000, government surveys suggested that the poorest 80% of households got a third of the national income. In contrast, the richest 10% got more than half.

These findings make SA one of the most inequitable countries. True, compared with other developing countries, government has created a strong system of social grants. But its welfare efforts are more than offset by high unemployment or low pay.

We hear repeatedly that SA is not doing so poorly on the job-creation front. In particular, the Labourforce Survey shows overall formal employment growth of almost 2% a year in the two years to September last year.

But the survey appears only twice a year, so it does not reflect the reversal in these trends early this year. In contrast, the employer-based Quarterly Employment Statistics shows serious job shedding by the formal sector in the first quarter of this year, and only a partial recovery in the second. Overall, 20000 jobs were lost in the first six months of this year.

A much faster and more sustained rate of job creation is needed to make a dent in unemployment. In the five years since the Labourforce Survey started, total employment actually dropped, with most of the fall resulting from shrinking informal employment.

The formal sector reportedly created jobs in the four years to March this year. Still, it grew only about 1,5% faster than the total labour force. Extrapolating population and employment trends, at this rate the target of halving unemployment will be met only in about 2050, rather than in 2014 as agreed on at the Growth and Development Summit.

These projections use the latest figures for population growth, which have been cut to below 1% to take into account deaths from AIDS. If the antiretroviral roll-out succeeds, the death rate will fall dramatically, and the target of halving unemployment would become even harder to reach unless job creation speeds up.

Underlying the data are the harsh realities faced by working-class families. Most young people are unemployed, and older people who have decent jobs in manufacturing and services feel perpetually threatened by retrenchment. In these circumstances, government’s provision of services for poor communities improves the quality of life, but cannot fully offset rising numbers living off a few incomes.

Mass action is not only about frustration and fear, however. It is also about empowering groups that do not as individuals have economic or political power. That is why the constitution calls for participatory democracy, so that even the poor, jobless and less skilled can influence national decision-making. Businesses can pay for lobbyists, golf games and cigars. Workers and the poor have only their feet, their voices and their solidarity.

In these circumstances, government’s commitment to an accelerated, shared growth strategy can only be welcomed. Certainly far more can be done across the state to speed up job creation — in restructuring the economy, in the provision of services and welfare, and in local economic development programmes.

Until new strategies make real changes in the lives of working-class communities, however, Cosatu’s members will continue to rely on their solidarity and activism to make their voices heard in national policy debates.

‖Makgetla is a Cosatu economist.

From: http://www.businessday.co.za/articles/opinion.aspx?ID=BD4A104479