No job seems to be safe, but what can South Africans do? An expert weighs in

Farm workers walking down a field (PHOTO: Klaus Vedfelt/Getty Images)
Farm workers walking down a field (PHOTO: Klaus Vedfelt/Getty Images)
Klaus Vedfelt

These are unsettling times and with people the globe over in a race to save lives, the last thing citizens need added to their list of concerns is the security of their jobs. Yet the reality is many jobs are on the line due to how long it will take to get the coronavirus outbreak under control.

Addressing the media last week Thursday, Gauteng premier David Makhura said that while the lockdown has helped slow the rate of infection, a recession is inevitable. Presenting best- and worst-case scenarios for the country’s economic hub, Makhura noted that between 250 000 to 500 000 jobs could be lost in Gauteng. This is the worst-case scenario.

No sector will be spared from the wrath of the virus, says Professor Steven Koch, head of the department of economics at the University of Pretoria.

“Agriculture is currently being hurt because the restaurant industry is nowhere near the capacity it used to be. Also, the wine industry – part of agriculture – is not helped given the ban on alcohol sales. Of course, that follows on to SAB (South African Breweries) and any agriculture related to brewing. A similar comment can be made for tobacco, which is also an important agricultural crop,” he says.

Everything has a knock-on effect and it’s still unclear what businesses can do to avoid shedding jobs. Mined minerals is a hot commodity South Africa trades with its biggest trade partner, China, but “because there is minimal international demand for ore, the mining industry is being hurt, while the costs of social distancing with respect to accessing the ore is going to further hurt the industry”.

Other bleeding sectors are recreation and tourism; textiles, including fashion; and transportation. “There is likely going to be a fairly painful knock to real-estate values as well,” Professor Koch adds.

However, this is a worldwide problem and a disruption to the globe’s supply chain model can lead to certain opportunities. The possible backlash China faces, at least from the United States, could be a window for South Africa to become more involved in the global supply chain, Professor Koch says.

“It is also possible that trade will drop precipitously, which would require SA to develop on its own, like before 1994. If either of those things happen, everything in South Africa will be more expensive.

“The biggest worry is that firms will accelerate their move towards machines in the workplace and, unless South Africans become much more skilled and more able to adjust to different work expectations, there will be even larger employment issues in the future than there were before the pandemic.”

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