False+hope+on+jobs+data+,+Kevin+OGrady,+Business+Day+Weekender

Business Day Weekender, Johannesburg, 30 September 2006
=False hope on jobs data=


 * //The contribution of agriculture to South African GDP has dropped below 3% for the first time in the country’s history, yet employment statistics reveal that it is this very sector that accounts for the recently-publicised dip in joblessness, from 26,5% to 25,6%, writes//** //KEVIN O’GRADY**.**//

CLAIMS of major headway in the fight against unemployment appear to be grossly overblown. New figures obtained from Statistics SA after this week’s release of the biannual Labour Force Survey present a markedly different picture. They show that more than a quarter of the new jobs created in the year to March were the result of a state-funded agrarian reform programme in one province, Eastern Cape.

All these new jobs were in the informal sector, most likely subsistence farming, which holds few benefits for the economy, and does little to lift people out of poverty. The survey showed that 544000 new jobs were created in the year to March, bringing the official unemployment rate down to 25,6%, from 26,5% a year earlier.

Particularly startling was the claim that of these new jobs, 147000 (or 27% of the total) were in the agricultural sector, which is in recession, having contracted by 33% over the past two quarters.

In the second quarter, its contribution to gross domestic product sank below 3% for the first time in history.

“How is it possible for such a sector to create jobs at such a rate?” asked Kobus Kleynhans, director of labour affairs at Agri SA, on Friday. “I really take these statistics with my tongue very deep in my cheek.”

“It simply makes no economic sense that a sector that shows no growth can create jobs on such a massive scale,” says Agri SA’s president, Lourie Bosman.

In line with its economic contribution, agriculture shed 138000 jobs in the year to September last year, when the previous survey was released.

Although it is no fault of Stats SA, which compiles its labour force data in compliance with guidelines set down by the International Labour Organisation, the nature of the jobs being included raises serious questions about claimed progress in achieving government’s goal of halving unemployment and poverty by 2014.

Analysts believe about 500000 jobs need to be created every year to achieve this goal so, on the face of it, there was headway in the year to March. But if the 147000 mainly subsistence farming “jobs” are stripped out, this number drops to 397000 and the unemployment rate rises to 26,4%.

That falls well short of the number of new entrants to the labour market every year — there are more than 500000 school-leavers alone. And SA has a notoriously low labour absorption rate of about 40%, which means less than half of new entrants to the job market are finding jobs.

Additional data requested from Stats SA this week, after the release of the survey, show employment gains in agriculture in five provinces: Eastern Cape (152000), KwaZulu-Natal (33000), Gauteng (13000), Northern Cape (7000) and Limpopo (2000).

The farming sector lost jobs in the other four provinces, ranging from 12000 in Mpumalanga to 17000 in Western Cape.

The net result was an overall increase of 147000.

Stats SA also said, subsequent to the survey release, that 190000 new jobs were recorded in the informal farming sector in the year to March, while 41000 jobs were lost in the formal farming sector.

Data included in the survey shows that of the 1,32-million jobs in farming, only 607000 are formal and 704000 are informal.

The massive spike in farm jobs in Eastern Cape is the result of a provincial government agrarian reform programme known as Green Revolution. It was launched in July last year and is based on similar successful projects in India and China, according to Fikile Black, spokesman for the Eastern Cape agriculture department.

Black was unable to say how many jobs had been created in the programme, but confirmed that many of the beneficiaries were subsistence farmers.

Green Revolution was made up of two main parts: the Siyazondla homestead food production programme; and the Siyakhula small-scale and massive food production programme.

Under the Green Revolution, prospective farms were supplied with fencing, stock water dams and boreholes, dipping tanks, tractors and other implements, irrigation schemes and human resource development. These are paid for mainly with grants from national government, says Black.

T-Sec economist and labour specialist Mike Schussler said on Friday that the figures showing 37% growth in informal farming jobs were “a little unbelievable”.

“It indicates a lot more people are living off subsistence in agriculture, but the growth is not in line with GDP growth in agriculture,” says Schussler.

Taking a longer-term view, data showed a 35% drop in informal farming jobs since 2000, while formal jobs have declined 21% in the same period, he said.

“A lot more people are helping themselves,” he said. About 25% of all white men have started their own businesses — the biggest such group, followed by 19,6% of all black women. Many of the latter group will be found in subsistence farming, said Schussler.

The political implications of the failure to make a significant dent in unemployment could be far-reaching. The Congress of South African Trade Unions (Cosatu) has long maintained, and did so again after this week’s labour survey release, that the jobs being created are so meaningless as to merely increase the number of “working poor”.

As President Thabo Mbeki’s final term winds down and African National Congress deputy president Jacob Zuma positions himself as a successor, with Cosatu’s backing, the nature of the drive to reduce unemployment will likely be a major policy battleground.

At the same time, Standard Bank economist Elna Moolman said, many businesses argue that SA’s low absorption rate is the result of rigid labour regulations, reducing their willingness to take on new staff.

The lack of progress in bringing joblessness down should strengthen calls for a relaxation of labour laws, something Cosatu will not countenance.

Reacting to the survey this week, Cosatu spokesman Patrick Craven said many of the informal jobs were in “low-paid and insecure forms of employment … this means that the number of working poor is a growing proportion of the workforce, while the proportion with quality jobs is declining”. With Sapa.


 * From: http://www.businessday.co.za/articles/weekender.aspx?ID=BD4A280988**

1053 words