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Media Centre | COSATU Press Statements
Stop Retrenchments! Save Jobs
The Congress of South African Trade Unions is deeply worried at the findings of the survey by KPMG, reported in Business Day on 5 December 2008, that more than a third of SA`s top 120 companies are likely to retrench staff in the next six months. If true t his news confirms the federation`s worst fears that the global economic meltdown will soon lead to mass retrenchments and an economic downturn.
No less alarming was that the survey also found that as many as 65% of companies were likely to offer staff voluntary packages, rather than forcing them out of work. Unemployment is still unemployment even if it is voluntary`.
With jobless levels already far too high, such a big increase in retrenchments would be devastating both for the individual workers and their families but also for the country`s economic growth prospects.
The report predicts that the worst-affected sectors will be construction, mining, industrials, financial services, forestry, paper and pulp, vehicles and logistics, which means that virtually the whole economy will be hit.
KPMG also reported that about 90% of companies across all sectors had already dramatically cut costs, but said this related not to the recent sub-prime crisis, but to local economic factors such as high interest rates, inflation and the volatile exchange r ate.
That confirms COSATU`s prediction that conservative economic policies, including rigid inflation-targeting which has resulted in the constant rise in interest rates would lead to cutbacks and ultimately retrenchments even before the effects of the global c risis began to bite.
The report revealed agreement on the need to reduce interest rates and direct taxes, combined with increased government expenditure in the energy sector to stimulate the economy. The views on both cutting interest rates and increasing government investment in energy are in line with policies that COSATU has long been campaigning for.
All this gloomy news confirms COSATU`s view that for the majority of South Africans the 2008 festive` season will be a Black Christmas`. Even most employed workers will not have enough money to spend on their families after months of hard toil. They will not have enough to pay for their children's education at the beginning of 2009. For the unemployed it will be a miserable Christmas.
This news makes COSATU`s Buy Local!` campaign even more relevant and necessary. (See separate statement for details.) Over the next two weekends our members and the wider community will be picketing at shopping malls throughout the country to persuade sho ppers to buy locally produced products.
Buying local is one of the best ways to turn the tide, save and create jobs and reduce the cost of living. It will help to boost the domestic economy by increasing demand for locally produced goods and thus save and create jobs in the firms that manufactur e them.
This will be helped by falling value of the rand which makes local goods cheaper than imports here, and more competitive overseas, which will enable SA firms to offset the worldwide decline in demand. It will help to stimulate the growth of manufacturing i ndustry and reduce our dependence on exporting raw materials, which make the economy especially vulnerable to fluctuations in world market prices for those commodities.
If we succeed in persuading consumers to buy South African and support our local economy, both workers and consumers will benefit. More workers will be employed and prices will come down - but only if local firms seize the opportunity. They must not just r aise their prices to the same level as imported goods so they can make a quick profit, while consumers still have to pay high prices. They need to take advantage of the falling rand to expand production and keep prices down, to make themselves more competi tive on both the world and domestic markets, expand production and employ more workers.
COSATU welcomes yesterday`s declaration of the Presidential Joint Economic Working Group urging all sectors to do everything in their power to avoid retrenchment. The federation supports their decision to set up a special task team - from business, labou r and the government - to look at how best to cope with the knock-on effect of job losses in SA, and to minimise job losses and other negative consequences brought by the crisis.
The meeting indicates that the ANC Polokwane Conference decision to make decent job creation the nation`s top priority is being taken seriously. Words must now be turned into deeds and action taken to save and create jobs.
Patrick Craven (National Spokesperson)
Congress of South African Trade Unions