How not to create jobs

2011-03-03 00:00

SOME would view Jimmy Manyi's recent comments that have raised such a storm as a gaffe. I am not inclined to this view. Not only is the man too smart to have made a mistake, but he, as the former director-general in the Department of Labour, is likely to have been the architect of the amendment to the Employment Equity Act that requires companies to do their equity plans on the basis of national, as opposed to regional, demographic distribution.

This particular amendment, among a number of others, has occasioned a good deal of comment, and some widespread anger, in recent days. Some critics have gone so far as to suggest that people will lose their jobs if the amendment is accepted. This is a sensational view of the implication. Rather, some people will lose job opportunities because they will be members of a group that is overrepresented, relative to the national picture, in a particular region. This will be substantial in some parts of the country. For example, in the Western Cape, 54,2% of the population is coloured, while just less than 21% is black. (Provincial distribution percentages are available in the 2001 census figures.)

KwaZulu-Natal has the largest Indian/Asian population. This constitutes 9,4% of the provincial total. By contrast, this population group makes up only some 0,1% of the Free State population. Thus, simplistically, one job in every 1 000 should be reserved in the Free State for this population group, while 844 positions should be occupied by black people. In the Western Cape, coloured people should fill 54 in every 100 jobs.

As estimated in 2010, however, the national demographic distribution reflects a ratio in 100 jobs of 79,4 to blacks, 8,8 to coloureds, 2,6 to Indians/Asians and 9,2 to whites. This means that coloured people living in the Western Cape would have to relocate in order to share equal employment opportunities with other people, and Indian/Asian people would have to rush into the Free State where employers would have to leave positions vacant until they did so. This is a kind of social engineering that seriously compromises the underlying principle of employment equity and introduces a dominance of dogma which loses sight of human rights.

It is hard to believe that this is the consensus position of the government. Together with many of the amendments that have been proposed, it flies in the face of commitments to job creation. It is surprising that it seems to be in the private sector alone that the contradiction is clear — vast sums allocated to job creation in support of the theme for the year on the one hand, and a range of impediments and disincentives on the other.

It is an election year, however, and in our state of political immaturity, some of the contradiction might be explained. There is a desperate need on the part of the ruling party to offer extra appeal to the working classes and the poor, this to mitigate the damage of service-delivery protests. But what the strategy, if indeed it is an election strategy, has done to the African National Congress's chances of recapturing the lost municipalities in the Western Cape, remains to be seen. I suspect that Manyi has few supporters in Luthuli House at present.

It should be remembered that he is also the chairperson of the Employment Equity Commission, a position from which he has been liberal in his criticisms of business. Some of this has been justified, perhaps, but it is anathema to those companies that have made sincere attempts to comply. I suggest that there are more of these companies, especially in the larger brackets, than many think. In the case of smaller companies, compliance is costly and difficult. Rather than making it easier by encouragement, it is now proposed that reports need to be submitted every year, not every second year as is the case currently. I call this bureaucratic clutter and can see no positive outcome. What I can see, however, is an enlarged bureaucracy to deal with extra reports that will be received. It is unlikely that the amount of enforcement will increase commensurately, because so much more time will have to be devoted to receiving and reading the reports.

• Andrew Layman is the CEO of the Durban Chamber of Commerce and Industry.

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