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Media Centre | COSATU Press Statements
The Decline in Employment
June 28 -2005
It is obviously ironic that one day after COSATU's massive strike against unemployment, job losses and poverty, Statistics SA has released data showing a substantial decline in employment in the first quarter of 2005. Falling employment gives renewed weigh t to the call by millions of workers yesterday for far more urgent action to address the unemployment crisis and restructure the economy toward sustainable, job-creating growth.
The new figures show that formal non-farm employment fell by about 136 000 - almost 2%. The fastest drop was in business services and finance, which declined by 8%; retail, which fell 2%; and mining and manufacturing, which contracted by under 1%.
COSATU has long warned that the expansion in employment in the past two years was not sustainable, since it was due largely to growth in construction and retail jobs while the productive core of the economy stagnated. The latest data reinforce these concer ns.
The data come from the new, more comprehensive employer survey, which means they cannot yet take seasonal factors into account. Nonetheless, they are grim news for the millions of South African families who already suffer from the effects of mass unemploym ent and poverty.
The Minister for Trade and Industry has correctly stressed that only sectoral and enterprise strategies can ensure long-term development and competitiveness. Indeed, COSATU has long argued that development requires much more coherent industrial policies.
But that does not mean that we can simply ignore all other impediments to economic development. Calling on companies to compete while the currency remains overvalued is like asking our Olympic swimmers to participate with their hands tied together. Moreove r, it is a fallacy to argue that the market led to the current overvaluation of the rand, given the strong role of the Reserve Bank in the past two years in talking up the rand and maintaining high real interest rates.