Herman Mashaba

Unemployment skyrockets but zero political will from national government

2019-05-16 17:58
Photo: Getty Images

Photo: Getty Images

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It's frightening to consider that, young people – especially black youth – stand a greater chance of going to prison than qualifying to become doctors or engineers or acquiring other skills desperately needed in our economy, writes Herman Mashaba.

To say I am shocked at the recent unemployment statistics is an understatement. I am disgusted!

How many more of our fellow South Africans should we watch lose their jobs, and more importantly, their ability to provide for their families before we realise that our economy is broken and that we need to go back to the basics while also trying out new things?

This week, Stats SA revealed that 237 000 more people lost their jobs in the first quarter of 2019 – the overall number of unemployed people stands at 6.2 million and there doesn't seem to be any reason on the horizon to be hopeful that this picture will improve. The overall picture of unemployment in South Africa is made worse when considering that almost 3 million people have simply given up looking for work.

These are discouraged work seekers who are ready, willing and able to work but have thrown in the towel because of the scarcity of employment opportunities. Therefore, while the unemployment rate is said to be 27.6%, the expanded definition actually puts unemployment at 38%.

Even more devastating about these figures is the fact that youth unemployment has risen to 55.2%. Basically, half of this country's future has absolutely no future to look forward to. With such a high rate of youth unemployment, I have to once again question the wisdom of leaving our borders wide open, allowing an unnecessary competition for scarce, low paying jobs.

While the figures don't say so, we can say with near certainty that the highest percentage of unemployed youth are black.

It's really frightening to have to consider that, at this rate, young people – especially black youth – stand a greater chance of going to prison than qualifying to become doctors, engineers or acquiring any of the other skills sets so desperately needed in our economy. 

No surprise young people didn't vote

Looking at this reality, I am not at all surprised that millions of young people did not bother to register to vote on May 8. And the outcome of the election does not bode well for any prospects that those who are presently without jobs will see a change in fortunes in the coming months and years. After all, the incoming government has promised to create 1.3 million jobs over the next five years.

Really?

Should jobless South Africans be excited at the prospect of an economy that is likely to create only around 260 000 jobs a year, when all indications are that more people will continue to fall into the unemployment trap?

It is really unfortunate that a country like ours, blessed with boundless natural, financial and human resources, has a youth unemployment rate so abnormally high. It goes to show how much they have been failed by our democracy, and especially by our national government.

And in case they did not know this, the job of a government is to create a conducive environment which allows businesses to thrive. If the incoming administration holds this to be true, its leaders will ensure that SMMEs, not big businesses, are given support and allowed space to create the many millions of jobs we need.

Unholy relationship between government and labour

However, South Africa has been held back by an unhealthy, cosy relationship between government and labour on one hand as well as government and big business on the other. Small businesses and the unemployed have simply been ignored.

Arising out of this unholy alliance is a situation in which big business keeps capable SMMEs at bay – thus preventing competition and the creation of new jobs while government is able to count on organised labour for votes and unions protect their members at the expense of new entrants into the job market.

Added to this toxic mix of patronage, massive job losses and unemployment is the breakdown of the rule of law. The Zondo commission of inquiry into state capture has heard some heartbreaking testimony of how the government – through our once prosperous state-owned enterprises – was repurposed to serve the whims of the Gupta family, the Zumas and the Magashules of this world as well as their sycophants in the Cabinet and everywhere else.

All the while, South Africa's poor public education system continues to create a huge skills mismatch by churning out learners who can't read and write, and who will likely be untrainable and frustrated. The intransigence of Sadtu – the largest teachers' union in the country and with whom the national government enjoys too cosy a relationship – disables the basic education department from making much needed interventions in the sector.

But where there is political will, there is a way.

 

Joburg bringing economy back to life

The City of Johannesburg operates in a highly regulated space, with absolutely no support from provincial and national government, but we have shown that is possible to revive an underperforming economy. Our Inner City Rejuvenation Programme is a prime example of how the multi-party government is bringing Johannesburg's economy back to life.

The backdrop of this ambitious undertaking is a city riddled with hijacked and abandoned buildings - more than 500 of them have been identified since 2016. These buildings will be offered to the private sector to be refurbished and turned into low cost housing and desperately needed student accommodation for the estimated 160 000 people on the City's housing list.

Considering the high inward migration experienced by the City, the need for housing, is substantially higher. Indeed, through this program, we hope to give many of our residents the dignity of a roof over their heads. Stories of students having to sleep on the streets or in libraries because of the scarcity of accommodation will hopefully also become less pronounced.

So far, 84 buildings have been offered to private developers – mostly small players in the property development industry – and we expect to yield 6500 housing units while realising R20bn in investment.

From this first phase of the project, 11 000 direct jobs will be created. And there's more.

A further 70 buildings will be released through open tender by September, yielding about 5000 housing units and realising an additional R15bn to R20bn in investment. Of course, thousands more jobs will be created during and after construction. These figures prove that we are creating sustained confidence in Johannesburg's economy and enticing investors to bring in huge sums of money again.

In the 2016/17 financial year the City achieved R4.5bn in facilitated investment. By the end of the 2017/18 financial year, the City had facilitated investment worth R8.7bn. This year, we are targeting R16 bn. As of February, our level of facilitated investment stands at a record-breaking R12bn, very much on track to achieve R16bn by June 2019.

What is most exciting about our Inner City Rejuvenation Programme is the ripple effect it will have on the construction sector, which has seen some of the biggest and reputable companies going under and losing jobs.

According to the latest jobs statistics, this sector lost 142 000 jobs in the first quarter of 2019. As we expand our Inner City programme, this will lend itself to realising much needed expansion in the sector and many more jobs.

I often wonder how many jobs this sector would create if only every major city around the country used Johannesburg's blueprint for getting South Africans working again.

Unfortunately, unlike in Johannesburg, there simply is no political will from those who govern the country.

-          Mashaba is the executive mayor of the City of Johannesburg

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