OUTLOOK FOR JOB CREATION IN SOUTH AFRICA DETERIORATING, SAYS ECONOMIST

JOHANNESBURG, The outlook for job creation in South Africa is deteriorating, according to a leading local economist, Mike Schussler.

Shussler, founder of the private economic research house, Economists.co.za, says sectors which have previously driven the country’s economy are unlikely to see a recovery until around 2021.

Until then, the economy will continue to bleed jobs unless things are done differently, he adds.

He notes that South Africa’s population is growing by 1.75 per cent annually and the number entering the labour market is growing at 1.8 per cent a year. This will be the case for the next five years or more.

Releasing the firm’s UASA Employment Report, Schussler says this means at least 150,000 people could be out of work annually. “Ultimately, that means that 150,000 will be unemployed assuming that the level of unemployment remains at 25 per cent.”

Schussler says there is a link between commodity cycles and employment in the country. The fall in commodity prices has translated to major declines in employment in key and traditional sectors of the economy such as mining, manufacturing, construction, transport and electricity.

He says employment in mining has dropped nearly 30 percent since 1987, while manufacturing has lost over a million jobs over the years.

“We have to look at that and say to ourselves, ‘Where do we find newer sectors’.”

He says the value that employees add to companies as a percentage of income has dwindled hence, instead of creating jobs, those that are in the private sector choose to keep their money in the bank where they will get a better interest and return on investment.

Thus far, it has been left up to government to create jobs. However, Schussler says government will not be able to create as many jobs as it did in the past.

“This time around, the public sector will not be able to grow those jobs, they grew 600,000 jobs over a period of seven years.”

Source: NAM NEWS NETWORK