Jobs the litmus test for Patel’s success

2010-11-28 12:03

The only prism through which to view this week’s release of the New Growth Path is the one that will highlight ­employment. With unemployment at ­almost 44% of the working-age population, and with an unemployable generation of young black men ticking like a time-bomb, it should be the clear focus of any new economic policy plank.

While its intentions are good, the jury is out on whether this is the right path to get South Africa working. Economic Development Minister ­Ebrahim Patel says the state’s jobs drive will be achieved through the massive investment in infrastructure.

Research presented by the University of Cape Town shows that government has failed ­dismally to replace machines with human beings on its ­existing programmes.

Labour intensity on the public works ­programmes is only at 11.3%, down from 26% when they started. This is the opposite of capital intensity and measures the extent to which ­workers are used.

Government set out to build roads, stormwater drains, trenches and cycle paths in the first phase of the infrastructure boom. But researchers have shown that less was spent on labour than in countries such as Botswana and Kenya with ­similar programmes.

As Patel harnesses the spending spree, he would do well to pay attention to other ways in which infrastructure-generated employment can be frustrated.

Researchers found that contractors labelled as labour-intensive methods that were not; that ­others ignored the obligation to use more workers than machines; that small contractors were not trained in labour-intensive methods. “In some cases, extra people were hired to sit under a tree alongside the site where the equipment was ­working in order to raise the numbers.”

The other major employment push in the New Growth Path is to encourage social solidarity. Those lucky enough to earn sufficiently to catch the attention of the taxman (about five million South Africans) are being asked to moderate their increases and bonuses in order to temper ­inflation, improve productivity and enhance ­labour absorption.

By Friday, it was pretty clear that the proposal for a social pact was going nowhere slowly. For one, it doesn’t take account of the fact that each working South African supports many ­dependants, especially if you are black and ­working class.

And the private sector, already starved of skills, is not going to give up the right to throw money and bonuses at talent. There is nothing in the plan to encourage business, black business or ­entrepreneurship, sadly. Besides, with ­consumption now more conspicuous than ever ­before, it’s a dead-end plan better suited to the 1980s when we knew what sacrifice meant.

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