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Jobs, Jobs, Jobs Everywhere but None to be Found Prof Hoosen Rasool 3 rd Research Paper March 2011 Centre for Applied Social & Economic Research

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Page 1: Jobs, Jobs, Jobs Everywhere but None to be Found · The SA labour market is characterised by the following (SAIRR Fast Facts No. 1, ... A Gini co-efficient (a measure of inequality)

Jobs, Jobs, Jobs Everywhere but None

to be Found

Prof Hoosen Rasool

3rd

Research Paper March 2011

Centre for Applied Social & Economic

Research

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Management College of Southern Africa Page 2

TABLE OF CONTENTS

PAGE

1. Introduction 3-4

2. Making the Right Bets 4-6

3. Features of the Labour Market 7-12

4. Shifting Structural Patterns 13-14

5. Employment and Occupational Trends 15-16

6. Occupational Trends 17-21

7. Occupational Information Dilemmas 22

8. Online Recruitment Index 22-25

9. Annual Trend Analysis 26-28

10. What are the Scarce Skills? 29-36

11. What creates jobs? 37-38

12. Conclusion 38-39

References 40

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1. INTRODUCTION

This paper is part of a trilogy produced under its National Skills Planning and Development Series by the Management College of South Africa. The first paper produced in 2009, Rethinking SETA Sector Skills Plans: some thoughts for policy makers, proposes more appropriate and effective ways to research Sector Skills Plans as part of a continuous improvement cycle. The second paper published in 2010, Creating a National Skills Development Strategy (NSDS) that Works: learning lessons from mistakes of NSDS I and NSDS II, advocated that NSDS III should be informed by evidenced-based decision-making and empirical analysis of conditions in our economy and society – dynamism of the economy, industrial and labour market policies, investment climate, industry growth trajectories, human development priorities, and so on. This is necessary to address chronic skills shortages and support the broader millennium goals of halving unemployment, poverty and reducing inequality by 2014. The third paper, Jobs, jobs, jobs everywhere but none to be found, takes a candid look at the jobs market and attempts to relate occupations to employment opportunities.

The paradox of South Africa is that thousands of job vacancies are advertised weekly in the media. Job vacancies are abundant in the private and public sectors. Many posts remain unfilled in public entities despite massive budget allocations. Arguably there is a matching problem in the labour market which warrants a separate discussion. High levels of concentration in the economy is also a problem as, indeed, is uncompetitive behavioural tendencies by some firms. The effectiveness and efficiency of the education and training system is yet another issue. But the fact remains that job openings exist in their thousands in our economy. This paper will not deal with the root causes of joblessness, but simply investigate where and what kinds of jobs are available in the labour market. It asks the questions: where are the jobs and who is most likely to secure employment? A major impediment with conducting labour market research in South Africa is the lack of a national labour market information system (LMIS). Without this facility, determining labour supply and demand is a serious challenge. There is thus a tendency to rely on macro analysis of labour market indicators. Statistics are computed in the form of broad occupational categories (4 digit codes) such as senior managers, professionals, technicians, clerks, labourers and elementary workers. Whilst such data are based on sound economic principles, it is necessary to „drill‟ down to specific occupations (5 and 6 digit codes) to find out what is actually available on the ground. This paper uses micro-labour market intelligence with macro-level data to build a picture of where are the jobs and in what industries and occupational clusters these exists. Without a LMIS, there is a heavy reliance on the labour market analyst to conduct diagnostic analysis, predict trends, identify patterns, make inferences, extrapolate data and formulate judgments on the basis of the weight of market evidence.

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This paper analyses the SA labour market; tracks employment and occupational changes; traces industry growth, identifies occupational clusters and specific occupations in demand; and make recommendations to improve employability. In doing this, we identify key forces shaping employment and changes in the labour market. While this paper is intended to spur discussion rather than a source of policy recommendations. We encourage constructive debate and discussion on this subject.

2. MAKING THE RIGHT BETS

In his recent State of the Nation Address, President Zuma (10 February 2011), “declared 2011 a year of job creation through meaningful economic transformation and inclusive growth.” He cited the New Growth Path (NGP), recently issued by the Development of Economic Development, for “achieving these goals, working within the premise that the creation of decent work is at the centre of our economic policies.”

Ministers will announce jobs targets for their sectors in their forthcoming Budget Vote Speeches. All government departments will align their programmes with the job creation imperative. The provincial and local government spheres have also been requested to do the same. The programmes of state owned enterprises and development finance institutions should also be more strongly aligned to the job creation agenda.

Six priority areas have been earmarked for job creation. These are infrastructure development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism.

In addition, President Zuma announced the establishment of a jobs fund of R9 billion over the next three years to finance new job-creation initiatives. The Industrial Development Corporation has set aside R10 billion over the next five years for investment in such economic activities with a high jobs potential.

A further R20 billion would be made available in tax allowances or tax breaks to promote investments, expansions and upgrades in the manufacturing sector. For a project to qualify, the minimum investment must be R200 million for new projects, and R30 million for expansion and upgrades. The programme will provide an allowance of up to R900 million in tax deductible allowances rand for new investors and R550 million for upgrades and expansions.

Government will continue to provide financial and non-financial support to small, medium, and micro enterprises (SMMEs), small scale agriculture as well as cooperatives. This will take the form of cutting administrative costs, avoiding duplication and directing more resources to small business.

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Minister of Finance, Pravin Gordhan (23 February 2011), has also made job creation the central theme of his R979.3 billion budget speech earmarking billions for job creation schemes, skills development and infrastructure spending. He announced direct government spending of R100 billion on plans for employment and skills training and R800 for infrastructure. These are designed to create 5 million jobs in the decade ahead.

A youth wage subsidy will be launched at a cost of R5 billion with a target of 178 000 jobs over the next 3 years. The Minister stated, “We cannot view the fact that 42% of young people between the ages of 18 and 29 are unemployed as merely a statistic.”

Spending on education, skills development and state-sponsored job schemes is aimed at complimenting the jobs drive:

FET Colleges get R14 billion SETAs get more than R20 billion and the National Skills Fund R5 billion. R73 billion goes to the expanded public works programme

These announcements are underpinned by two very important policy initiatives of government.

The New Growth Path, a blueprint to take the country on a high growth trajectory, is committed to creating 5 million new jobs over the next 10 years. The thinking is that “if we can grow employment by 5 million jobs by 2020 (around 3 million more than the anticipated growth if we extrapolated from 2002 to 2009), over half of all working-age South Africans would have paid employment and narrow unemployment would drop by 10 percentage points from 25% currently to around 15%” (DED, 2011). The Industrial Policy Action Plan (IPAP 2) released in February 2010 by the Department of Trade and Industry is also part of a new growth path initiative of government. Broadly, it aims to restructure the economy through productive sectors such as manufacturing and infrastructure investment, rather than consumption sectors, whose growth fuelled the last economic boom (DTI, 2010). Can manufacturing in South Africa take-off and reach former employment levels witnessed in the 1970s and 1980s? Should our government be placing heavy bets on manufacturing through special treatment vehicles? Is a manufacturing revival possible at all in the first place? How do we overcome deep structural problems to revive our industrial base? Can we compete with highly skilled and cheaper labour manufacturing platforms in South East Asia? Where are the growth points in manufacturing? These issues are not unique to South Africa. After the collapse of a debt-fuelled boom, renewed attention is being paid to manufacturing and exports as a source of growth in many countries. Policy-makers around the world are talking about rebalancing their national economies. In the developed world, this mostly involves reducing debt. But it also involves reassessing the mix between the services sector, which represents about 70% of the US economy, and manufacturing, which makes up just 11% (Financial Times, 07 January 2011).

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Mainstream thinking, particularly in debt-riddled countries of the North, is that over-reliance on financial services tends to “crowd out” productive sectors and is not a solution to create decent work and build a stable economy. In France and Germany, influential voices are calling for a return to the business of producing real goods, although the latter already has a vibrant high-end manufacturing sector. These issues have direct implications for job creation, public training investments, poverty alleviation and broader economic and social development. Let‟s set the scene by analysing our labour market.

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3. FEATURES OF THE LABOUR MARKET

The SA labour market is characterised by the following (SAIRR Fast Facts No. 1, January 2011):

The economy needs to grow by at least 7% per year to halve unemployment. GDP growth forecasts for the period 2010-2015, which is expected to be

fewer than 4%, means that unemployment will continue to bedevil society and put a brake on growth.

SA‟s has a poor history of GDP growth per head relative to a number of developed and developing countries.

A Gini co-efficient (a measure of inequality) rating of 0 would mean that all people in a country had the same income, while a Gini co-efficient of 1 would mean that one person had all the income.

The Gini co-efficient is 0.62 in 1996 and 0.65 in 2009. Whites have the lowest Gini co-efficient (0.45) and Africans the highest (0.60). GDP growth per head is unimpressive.

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The official unemployment rate was in excess of 20% for most of the period between 1994 and 2010. After reaching a high of 31.2% in 2003, it has slid to 25.2% in 2010. Although about a million jobs were lost in 2008 and 2009, the unemployment rate remained lower than preceding years.

The unemployment rate according to the wide definition (includes discouraged workers) has remained in excess of 30% for most of the period. Although unemployment has declined since 2007 (33.2%), it has done so marginally (32.4%).

The very high unemployment rate in terms of the wider definition indicates to the inability of the economy to absorb labour despite steady growth.

It is evident that policy measures to arrest unemployment have not worked. This raises an important question: what must be done to reduce unemployment?

It is often stated that youth jobless is a „ticking time bomb.‟ Polarisation is

evident in terms of race with African youth unemployment in excess of 50% and White youth unemployment at around 20%.

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36.5% of the unemployed have remained unemployed for more than a year and 63.5% for less than a year.

Unemployment in excess of a year has the adverse effect of further reducing the chances of gaining employment due to obsolescence.

A staggering 41.4% of new entrants to the labour market are unemployed. The inability to absorb youth into the labour market creates social and

economic problems.

The labour market participation rate is the proportion of the working-age population that is economically active (employed, or unemployed and actively seeking work), whereas the labour absorption rate is the proportion of the working-age population that is actually employed.

The labour market participation rate dropped from 60.8% in 2001 to 54.6% in 2010.

The labour absorption rate fell from 45.8% to 40.8%.

Year Labour Participation Rate (%)

2001 60.8

2002 59.7

2003 58.3

2004 55.7

2005 56.3

2006 57.8

2007 57.7

2008 58.1

2009 57.5

2010 54.6

Year Labour Absorption Rate (%)

2001 45.8

2002 43.1

2003 41.2

2004 41.0

2005 42.6

2006 44.4

2007 44.1

2008 44.5

2009 44.0

2010 40.8

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Wage/productivity uncoupling

Adcorp January 2011

Rising capital intensity after 1995 indicates a polarising trend. This is in part due to technology and globalisation.

Labour productivity was healthy up to 2000, but from 2002 the labour market was characterised by strong remuneration increases and concomitant productivity declines.

Wages in SA trended upwards sharply from 1994 onwards thus increasing the cost of doing business.

Despite a decade of average growth in the 1990s, employment has since 2005.

The economic recovery in 2010 is not correlated with employment uptake.

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Adcorp January 2011

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Unemployment is polarised by race. White (6.1%) and Indian (4.6%) unemployment in 2010 is relatively low

compared to African (29.7%) and Coloured (21.8%). Overall unemployment (25.2%) is very high.

Average public sector monthly earning has grown by +134% between 2000 and 2010, whilst the private sector saw an increase of 83%.

The staggering increase in public sector earnings is not supported by productivity gains in that sector.

Trade union membership as a percentage of the workforce is in decline from 1998.

Such a decline in membership is problematic because it exposes workers, particularly vulnerable workers, to the inevitable risks of exploitation. It also increases casualisation, informalisation and other forms of „disguised unemployment.‟

Trade unions are challenged with new forms of work and work organisation.

Unemployment Rate by Race (Official Definition)

Year African Coloured Indian White Total

2001 31.1% 21.2% 16.7% 6.9% 26.4%

2002 35.2% 24.1% 20.1% 6.5% 29.7%

2003 37.3% 22.4% 22.4% 6.5% 31.2%

2004 34.2% 18.0% 16.5% 4.9% 27.9%

2005 31.6% 19.8% 18.0% 5.1% 26.5%

2006 30.7% 18.9% 11.2% 4.7% 25.6%

2007 30.2% 19.8% 13.8% 4.3% 25.5%

2008 27.7% 19.1% 11.8% 5.3% 23.5%

2009 27.7% 19.5% 12.7% 9.2% 23.5%

2010 29.7% 21.8% 4.6% 6.1% 25.2%

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Public investments in tertiary education have not been able to address supply-side needs for scarce skills.

From the 160 000 that enrolled just over 42 000 complete their degrees within 5 years.

Dropout rates around 70 000 are very high. Throughput rates for maths and matric passes are very low pointing to

inefficiencies in the education and training system. SA is facing a bifurcated employment future. At the high end is a highly educated, technically skilled workforce attuned to the demands of the global marketplace. At the bottom end is a willing but unskilled group that is seeing its prospects of employment undermined by workers in countries like China in manufacturing. Let‟s look at structural shifts in the economy and its effects on employment.

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4. SHIFTING STRUCTURAL PATTERNS The graphs illustrate the relative contributions of the various sectors to gross domestic product (GDP) since the middle of the last century (SAIRR 2010).

Construction3.1%

Electricity1.7%

Manufacturing18.1%

Mining12.1%

Agriculture16.6%

Personal Services

8.0%

Government7.4%

Finance9.3%

Transport9.3%

Trade13.2%

GDP1951

Construction3.9% Electricity

2.4%Manufacturing

15.1%

Mining9.7%

Agriculture3.0%

Personal Services

5.9%

Government15.4%

Finance21.7%

Transport9.5%

Trade13.3%

GDP2009

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An analysis of sector contribution to GDP since 1951 indicates the economy is in a structural shift from primary and secondary sectors to the tertiary sector. This shift poses huge challenges to job creation, employability and education and training.

The evolution of sector contribution to value added as economies develop is a consistently observable pattern. Essentially, the share of agriculture tends to decline in the early stages of development. Then, in the middle-income stage, an inverted U shape is typical as industrial sectors peak and then decline. Services grow continuously as a share of GDP as countries move along the development curve.

In 2009, service-related sectors (including government) contributed 57.25% to GDP. The figure in 1951 was 47.2%. This is in line with international trends for middle-income countries.

The reality is that most jobs with good prospects in the future will be located in industries requiring more service-related skills.

The most striking feature is the declining proportion accounted for by agriculture in the South African economy. This sector has gone from contributing 16.6% of GDP in 1951 to 3% in 2009. The relative contributions of mining and manufacturing have also declined but by a less significant margin. Manufacturing share of GDP shrunk from 18.1% in 1951 to 15.1%. Whilst mining declined from 12.1% to 9.7%.

The contribution of general government increased from 7.4% in 1951 to 15.4% in 2009.

The greatest growth has been in the financial sector, which has risen from 9.3% of GDP to 21.7%.

Industrial policy in SA has a tendency to concentrate on the „mix‟ of industries for growth and jobs. But research finds that countries that outperform others do not have a more favourable sector mix that propels them to higher growth. Instead, their individual sectors are more competitive. There is a need to reach a better understanding of the underlying drivers of competitiveness and the policies that have been successful in promoting it.

In a middle-income country, the performance of manufacturing is critical. There is no historical example of any emerging economy that had sustained rapid growth without a substantial contribution from manufacturing. The rise of Germany, South Korea and Japan after the Second World War to a developed nation status has been built on a strong manufacturing base. This also holds true for India, Singapore, Malaysia, Vietnam and Thailand. The emergence of China as a global manufacturing giant is alleviating poverty on a scale unseen in human history.

Research shows that services sectors will continue to be critical for job creation. Productivity improvements are a key in all economic sectors but most job growth comes from services. In high-income economies, the services sector accounted for all net job growth between 1995 and 2005. Even in middle income economies, 85% of all net jobs came from the services sectors (Newsweek 2010).

Let‟s examine how employment patterns have changed as a result of sectoral shifts.

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5. EMPLOYMENT AND OCCUPATIONAL TRENDS

The table below provides overall formal employment by economic sector and industry between 2001 and 2010. Stats SA defines those who are employed as persons aged 15–64 years who, during the reference week: did any work for at least one hour; or had a job or business but were not at work (temporarily absent).

OVERALL EMPLOYMENT BY ECONOMIC SECTOR AND INDUSTRY IN 2001 AND 2010

2001 2010

Sector and Industry Number Proportion Number Proportion

Number

Change

Formal (Non Agricultural)

Mining 485000 3.9% 294000 2.3% -191000 -39.4

Manufacturing 1462000 11.7% 1514000 11.8% 52000 3.6

Utilities 77000 0.6% 68000 0.5% -9000 -11.7

Construction 342000 2.7% 764000 6.0% 422000 123.4

Trade 1365000 10.9% 1881000 14.7% 516000 37.8

Transport 493000 3.9% 573000 4.5% 80000 16.2

Finance 988000 7.9% 1486000 11.6% 498000 50.4

Community & social services 1772000 14.2% 2388000

18.7% 616000 34.8

Total 6984000 55.9% 8974000 70.1% 1984000 28.4

Source: Stats SA, Labour Force Survey Historical revision March series 2001 to 2007.

Statistical release P0210, p16; Quarterly Labour Force Survey Quarter 1 2010, Statistical release P0211, 4 May 2010,p9

Mining has shown significant job losses, a decline of 191 000 over the period. Manufacturing employment figures are stagnant, an additional 52 000 jobs

over a 10 year period translating into a net 3.6% increase in the workforce. The star performers have been construction (123.4%), finance (50.4%), trade

(37.8%) and community and social services (34.8%). These employment patterns represent a shift from primary and secondary

sectors of the economy to the tertiary sector which is service-oriented. The decline in jobs in certain sectors is a result of megatrends such as

technology and globalisation. Over the decade, technology has been the primary agent that has changed

the demand and supply equilibrium across the labour market. The tertiary sector tends to be skills biased favouring employees with

cognitive, technical or collaborative skills over others with transactional or repetitive manual skills that can easily be substituted or replaced.

Increasing skills intensities reshape the labour market by changing the occupational mix (which will be discussed later).

In the face of these growth trends, educational attainment and achievement is an essential enabler to formal employment as well as higher income. The worker needs a higher level of formal education. Rising demand for higher skilled workers also applies to stagnant and declining sectors.

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The figure below forecasts growth in manufacturing to 2025 illustrating the difference in the expected growth rates of output and employment (BMR 2006):

Manufacturing is expected to show capital productivity and labour productivity growth to 2025 compared to a reduction in employment growth. Policymakers seeking to expand employment opportunities need to differentiate between those sectors or occupation clusters where growth is largely a result of productivity improvements with a flat or declining employment trend and sectors or occupation clusters where new job creation largely fuels growth. In the case of manufacturing, employment growth is expected to come from the high skilled occupations where the value-add offsets costs. A good example is engineering occupations. Overall employment in manufacturing is expected to decline. Technology and globalisation are working together to produce massive efficiencies. China and India have literally added hundreds of millions of new workers to the global labour pool producing the same goods and services at reduced prices. Workers who get paid a decent wage for skilled but routine work in manufacturing are getting squeezed out by technology and globalisation. Let‟s drill down to occupational categories.

BMR, 2006

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6. OCCUPATIONAL PATTERNS

Four digit codes are used in South Africa to record occupational categories in national accounts. These occupations neatly divide into 3 skills groups.

High Level Skills

Managers: People who plan, direct and coordinate the activities of an organisation (private or public sector), for example, CEO.

Professionals: People who possess a high level of professional knowledge and experience in a field, for example, accountant.

Technicians and associate professionals: People who possess professional knowledge and experience in a field in the physical and life sciences or the social sciences or humanities, for example: nursing assistant, laboratory technician.

Medium Level Skills (Semi-skilled)

Clerks: People who organise, store, compute and retrieve information, for example, secretary, and administrator.

Skilled agricultural workers: People who grow crops, breed or hunt animals, breed or catch fish or cultivate or harvest forests, for example, farmer.

Craft and related trade workers: People who apply the knowledge and experience of skilled trades and handicrafts to extract raw materials, construct buildings and other structures or make various products including handcrafted goods, for example, miner; carpenter; plumber; electrician; welder.

Sales and service workers: People who market and sell goods and services, for example, salesman.

Plant and machine operators and assemblers: People who operate and monitor large-scale and often highly automated industrial machinery and equipment, for example, clothing machinist or assembly line worker.

Low Skills (Unskilled)

Elementary worker: People who perform mostly simple and routine tasks involving the use of hand-tools and in some cases physical effort, for example, garbage collector; caretaker; security guards; construction worker.

Domestic worker: People who work in cleaning function in a home, for example, maid.

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The following figure illustrates comparative employment numbers and proportion for occupational categories between 2001 and 2010.

Stats SA, Labour Force Survey Historical revision March series 2001 to 2007.

The above figure provides information on occupational changes over a decade:

The proportion of the total workforce and employment numbers for managers, professionals, technicians, clerks and sales and services increased between 2001 and 2010.

In contrast the proportion of the total workforce and employment numbers for skilled agriculture, craft and related trade, plant and machine operator, elementary worker and domestic workers decreased in the period.

Employment growth is uneven favouring skilled and, in some cases, semi-skilled workers with formal educational qualifications and higher skills intensities.

The proportion of semi-skilled and unskilled workers is in decline as a result of technological advances and globalisation. Routine, manual occupations are particularly vulnerable to off-shoring, mechanisation and computerisation.

In the 1950s to 1970s agriculture and manufacturing could absorb millions of semi-skilled and unskilled workers. Today these industries are a smaller part of the economy. The only good jobs in manufacturing are associated with knowledge, innovation and research and development.

The decline in craft and related trade and plant and machine operator categories is a result of a declining industrial base and poor supply-side training infrastructures. If the manufacturing skills base is allowed to shrink further, opportunities for decent jobs will dwindle.

In a survey of 400 multi-national CEOs (Newsweek, July, 2010), it was found that innovation, not cheap labour, determines whether a country will be successful in manufacturing. Contrary to conventional wisdom, manufacturing has not become a race to the bottom. The US, Germany, Sweden, Japan, South Korea and Singapore hold top 10 positions in manufacturing because the skills levels of workers offset their costs.

Skills are particularly lucrative in advanced manufacturing which accounts for half of all innovation within a developed economy.

Manager Professional Technician ClerkSales and Services

Skilled Agriculture

Craft and Related Trade

Plant and Machine Operator

ElementaryDomestic Worker

2001 5.3% 3.1% 11.1% 9.6% 14.4% 1.7% 13.9% 8.9% 24.3% 7.6%

2010 7.6% 5.3% 11.6% 11.3% 14.1% 0.7% 12.3% 8.2% 21.9% 6.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Proportion of employment by occupation, 2001 and 2010

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The following table indicates employment by educational level.

Employment by highest level of education, 2010

Number employed

Proportion of total

No schooling 420000 3.3%

Less than primary completed 1106000 8.6%

Primary completed 608000 4.7%

Secondary not completed 4186000 32.7%

Secondary completed 3916000 30.6%

Tertiary 239000 18.7%

Other 168000 1.3%

Total 12803000 100.0%

Source: Stats SA, Quarterly Labour Force Survey Quarter 1 2010, Statistical release P0211, 4 May 2010, p17

The majority of employed people have tertiary, secondary or not completed secondary education.

Collectively, these employees make up a staggering 82% of the total workforce.

The table indicates that employment in a modern economy is qualifications biased.

The following table provides composite occupational data (4 digit code) from 23 SETAs on scarce skills within their designated sectors for 2011-2012 (DHET 2011).

Scarce skills refers to deficiencies at an occupational level where there are

insufficient skilled people to meet current or future labour market demands, either because such skilled people are (a) not available or (b) they are available but do not meet the employment criteria.

MANAGERS PROFESSIONALTECHNICIANS

& TRADE WORKERS

COMMUNITY & PERSONAL

SERVICE WORKERS

CLERICAL & ADMIN

WORKERS

SALES WORKERS

MACHINERY OPERATORS &

DRIVERS

ELEMENTARY WORKERS

Skills Sectors 22% 24% 17% 5% 4% 10% 13% 5%

0%

5%

10%

15%

20%

25%

30%Scarce Skills List 2011-2012

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Scarce skills could be as a result of (1) Absolute Scarcity, which means that

suitably qualified people are not available in the labour market. This may be due to the fact that the occupation is newly emerging or that there are no people enrolled to acquire those skills. (2) Relative Scarcity, which means that skilled people are available in the market but they do not satisfy the required employment criteria such as willingness to relocate, equity considerations and a high level of work experience.

SETAs collectively identified 63% of their scarce skills needs in high skills categories such as managers (22%), professional (24%) and technicians (17%);

Intermediate skills consist of 32% of skills needs: community & personnel service (5%), clerical & admin workers (4%), sales workers (10%) and machinery operators and drivers (13%); and

Elementary workers (unskilled) make up 5% of total scarce skills needs. It is evident that scarce skills needs identified by SETAs are skills-biased with

63% of occupations falling in the high skills category. It is widely accepted that adoption of new technology and related process

innovations in the workplace favours employees with cognitive, technical and collaborative skills that allow their work to be leveraged by these innovations over others with transactional and repetitive manual skills that can easily be substituted.

Skilling people to undertake non-routine work with higher skills intensities is more likely to support employment and income growth.

In this instance, acquiring formal qualifications, particularly at post-school level, is the key to employability.

The table below indicates unemployment in 2010 by occupation.

Stats SA, Labour Force Survey Historical revision March series 2001 to 2007.

Comparatively lower levels of unemployment are recorded for managers,

professional and technicians which involve high skills work. High unemployment, with the exception of skilled agriculture workers, is

recorded for semi- skilled and unskilled occupations. This is further evidence of skills bias in the labour market with higher skilled

workers showing lower levels of unemployment.

Manager Professional Technician ClerkSales and Services

Skilled Agriculture

Craft and Related Trade

Plant and Machine Operator

ElementaryDomestic Worker

Other

Unemployed 43000 34000 106000 218000 281000 6000 401000 167000 513000 134000 1000

0

100

200

300

400

500

600

Tho

usa

nd

s

Unemployment by Occupation, 2010

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The table below provides information on the proportion of adult income by education level.

Adults by income group and highest level of education, 2009 (numbers)

No Schooling

Primary Education

Secondary Education

Tertiary Education Total

R0-R50000 3037096 6830651 12911068 724696 23503512

R50000- R100000 279534 710960 1868282 293462 3152239

R100000-R300000 135113 326467 1929156 949615 3340350

R300000-R500000 9838 21839 311362 386724 729763

R500000-R750000 6903 3727 97520 159941 268091

R750000+ 4060 4657 53791 129110 191618

Total 3472544 7898301 17171179 2643548 31185573

Source: BMR 2010

The table reveals the following:

There are significant disparities between education groups at various income levels.

For example, 67.4% of working adults earn in excess of R750 000 per annum compared to 2.1% of no schooling and 28.1% of secondary education.

High income that accompanies tertiary education offers a high wage return. Occupational growth with job opportunities is concentrated in high skill, high wage jobs and declines are associated with low skill, low wage jobs progressively. The key drivers of this trend are the automation of routine work, technology, international trade and atypical forms of employment. The decline of semi-skilled and unskilled workers is detrimental to earnings and labour force participation rates of such workers. We looked at issues in terms of broad occupational categories (4 digit codes). But the reality is that employers advertise in 6 digit codes. They may require, for example, a management accountant, secondary mathematics teacher, fitter or fork-lift driver. It‟s not helpful to advertise for a clerk, technician, professional or manager. So let‟s work our way down to occupational clusters and occupations according to 6 digit codes.

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7. OCCUPATIONAL INFORMATION DILEMMAS

Although there is considerable effort to improve the efficiency of the labour market through active labour market policies and programmes, very little attention is given to improving the state of labour market intelligence among users of labour market information. This problem, laboured throughout the discourse, is exacerbated by the country‟s lacks of a viable Labour Market Information System (LMIS) which is an essential instrument to guide evidence-based policy-making in economies. There is a need to take lessons from countries such as USA, New Zealand, Australia, Malaysia, United Kingdom, Singapore and Canada about the necessity of aligning policy-making to proper information systems. When policy-making is not evidenced-based, other criteria such as power and influence of sectional interests, corruption, political ideology, arbitrariness and anecdote dominates the process. This exposes public spending to the inevitable risk of over and under investments. In summary, a number of problems persist in South Africa concerning the analysis of labour market information and subsequent policy action. These include:

Occupational statistics (5 and 6 digit codes)are hardly recorded and analysed, except in the case of statutory professions such as health care professionals, engineers, construction professionals, charted accountants, teachers, nurses and lawyers;

Limited integration of labour market analysis, on the one hand, and policy development, on the other, due mostly to capacity constraints in the public sector;

Low awareness of basic international concepts, classifications and definitions among public officials, policy-makers, social partners and other stakeholders;

Poor analytical skills among planners, public officials and employees of labour market institutions to make sense of statistics;

Weak diagnostic capacity to research, analysis, monitoring, evaluation and impact assessment;

Lack of policy and programmatic co-ordination across state departments; and No sustainable programme to build research capacity of staff.

8. ONLINE RECRUITMENT INDEX Presently, CareerJunction, a listed South African online recruitment company is tracking occupational trends according to occupational clusters and specific occupations. Although online recruitment information should not be used exclusively to determine where jobs exist and in what quantities, it does give some idea of jobs demand.

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The CJI has been developed due to a lack of updated and accurate online labour market information in South Africa. The data is sourced from the CareerJunction website where over 1 000 top Recruiters (both Agencies and Corporate companies) advertise over 45,000 jobs per month to more than 1 million registered Career seekers. CJI captures an average of 20 000 new registered career seekers and 11 000 new completed resumes every month. The CJI provides insights into online labour market dynamics including; the current online labour market trends, rising and shrinking industries, identifying skills shortages and identifying strategies to alleviate the effect of a decreasing supply of candidates. The table below is a 3-year analysis of the number of potential career seekers per job advert placed on CareersJunction.

INDUSTRY POTENTIAL CAREER SEEKERS PER JOB ADVERT

2009 2010 2011 AVERAGE

Engineering 7.07 6.47 6.73 6.76 Less than 10 potential Career seekers per job

advert Information Technology 7.23 10.55 4.7 7.49

Finance 10.45 7.67 9.74 9.29

FMCG, Retail & Wholesale 13.57 13.87 8.08 11.84

Between 10 and 30 Potential career seekers

Per job advert

Beauty 13.96 9.12 15.98 13.02

Medical 14.29 8.38 18.75 13.81

Distribution, Warehousing & Freight

18.79 9.37 14.85 14.34

Motor 17.41 13.53 12.86 14.60

Mining 19.2 12.27 12.79 14.75

Human Resources & Recruitment

23.64 10.48 13.14 15.75

Design 21.15 15.08 11.79 16.01

Petrochemical 18.4 14.41 16.83 16.55

Building & Construction 10.87 14.1 24.8 16.59

Sales 22.51 14.58 15.13 17.41

Marketing 26.09 13.76 13.56 17.80

Manufacturing, Production & Trades

21.3 12.91 20.85 18.35

Agriculture 24.78 19.25 14.74 19.59

Media 30.47 14.44 16 20.30

Legal 33.82 16.61 22.29 24.24

Maritime 30.84 15.93 26.91 24.56

Telecommunication 27.04 19.43 31.87 26.11

Hospitality & Restaurant 27.97 21.2 32.63 27.27

Transport & Aviation 29.25 21.79 36.31 29.12

Travel & Tourism 33.99 18.79 39.89 30.89

More than 30 potential Career seekers per job

advert

Science & Technology 52.28 19.19 29.29 33.59

Property 38.78 24.92 38.27 33.99

Business & Management 47.99 34.07 36.32 39.46

Safety, Security & Defence 47.66 21.56 52.64 40.62

Botanical 14.45 79.02 33.05 42.17

Social & Community 99.43 34.75 40.91 58.36

Arts & Entertainment 83 37.97 61.76 60.91

Admin, Office & Support 83.85 60.19 44.16 62.73

Sport & Fitness 73.17 50.9 114.25 79.44

Government & Local Government

73.75 87.75 88.87 83.46

Education 88.96 100.26 140.45 109.89

CareerJunction Index, Executive Summary, 2009; 2010a;2011

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Recruitment is difficult in the engineering, information technology and finance industries with less than 10 career seekers per job advert;

Recruitment is moderate for a range of industries shaded yellow with 10 to 30 career seekers per job advert;

Recruitment is easy for a range of industries shaded green with more than 30 career seekers per job advert;

Investments in education and training should be weighted heavily in favour of Engineering, Information Technology, Finance, FMCG and Retail & Wholesale.

An analysis reveals the following specific occupational clusters within engineering, finance and FMCG and Retail & Wholesale:

Recruitment conditions experienced by each Finance occupational field measured by the number of potential career seekers available for every job advert posted (CJI 2010b):

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Recruitment conditions experienced by each Engineering occupational field measured by the number of potential career seekers available for every job advert posted (CJI 2010c):

Recruitment conditions experienced by each FMCG and Retail & Wholesale

FMCG and Retail & Wholesale occupational field measured by the number of potential career seekers available for every job advert posted (CJI 2010d):

Let‟s look at recruitment trends by industry.

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9. ANNUAL TRENDS ANALYSIS CJI takes an in-depth look at the demand trends experienced by the top 10 industry sectors in the South African online labour market in the previous 12 months. Below are visual illustrations of the volume trends of job adverts published on the CareerJunction website in the previous 12 months (CJI 2010a).

The Building & Construction industry continues to lag behind in terms of recovery as recruitment activity reveals an ongoing decreasing trend. The Engineering industry, on the other hand, has experienced an increase in demand for labour, providing evidence that businesses are actively recruiting for these skills.

Recruitment activity seems to have picked up steadily within the Mining industry since January last year. The Mining industry is currently suffering from a critical shortage of certain skills. Increasing demand for labour in this industry could aggravate the situation. Therefore, businesses are encouraged to plan ahead and implement the necessary recruitment strategies in order to secure talent.

The Information Technology is on a very slow path to improvement, however, signs of increasing recruitment activity are observed for the previous 3-month period. An annual analysis of online employment activity reflects a decreasing trend of 2%. The CJI‟s latest quarterly CJI Information Technology job report reveals a shortage of Software Developers and Software Testers as well as Business Analysts within the South African Information Technology sector. Businesses are advised to implement the necessary recruitment strategies in order to secure talent.

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The Finance industry displays a positive trend in demand for the previous 12 months. According to the CJI findings, demand for labour has increased by 22% during the course of 2010. The latest quarterly CJI Finance Report reveals skills shortages within the following occupations: Chartered Accounting; Cost Accounting; Taxation and Risk Management. Despite an increase in employment activity from the first to second quarter of 2010, overall levels of labour demand has decreased significantly since the beginning of 2010. The Telecommunication sector currently boasts a large supply pool and therefore easy overall online recruitment.

The Motor industry is suffering from critical skills shortages. Long-term labour planning is essential within this sector. Both the Motor and Human Resources & Recruitment industries reveal overall increases in labour demand. Both industries are performing well in terms of recovery as demand for labour is on the rise.

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The Manufacturing, Production & Trades and FMCG, Retail & Wholesale industries display negative trends in recruitment activity for the previous 12-month period. Businesses seem reluctant to expand their labour force. The Manufacturing, Production & Trades industry is particularly lagging behind in terms of recovery, as demand for labour has decreased by 36% since January 2010. The shortage of Artisans is an unremitting problem in South Africa.

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10. WHAT ARE THE SCARCE SKILLS? The following section provides an illustration of scarce skills according to 6-digit codes by occupational category extracted from the Scarce Skills List 2011-2012 (DHET 2011).

740

778

800

804

852

880

1032

1042

1150

1285

1750

1762

2002

2355

2842

3150

5000

5165

5551

8117

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

PRODUCTION/OPERATIONS MANAGER(MANUFACTURING) …

OPERATIONS MANAGER (PRODUCTION)(133502)

CONTACT CENTRE MANAGER: WORKFORCE SCHEDULER …

CALL OR CONTACT CENTRE MANAGER (149201)

CORPORATE GENERAL MANAGER (111201)

HORTICULTURAL FARM PRODUCTION MANAGER (122204)

MANAGING DIRECTOR( ENTERPRISE/ ORGANIZATION (111101)

FINANCE MANAGER (132201)

CORPORATE SERVICE MANAGER (132101)

AGRONOMY FARMER (121201)

MIXED CROP AND LIVESTOCK FARMER (121401)

LIVESTOCK FARMER/FARM MANAGER (131301)

ADVERTISING & PUBLIC RELATIONS (131101)

SALES & MARKETING (131102)

SUPPLY & DISTRIBUTION (133601)

STORAGE &WAREHOUSING MANAGER (133601)

CLEANING SERVICES MANAGER (149904)

RETAIL MANAGER (GENERAL) (142101)

SUPPLY CHAIN MANAGER (133601)

SMALL BUSINESS MANAGER(139907)

Scarce Skills 2011-2012

MANAGERS

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1024

1024

1028

1061

1201

1211

1284

1345

1386

1620

1825

1947

2000

2742

3983

4307

4405

4785

5364

10147

0 2000 4000 6000 8000 10000 12000

MECHANICAL ENGINEER (233502)

AUDIOLOGIST (252701)

MIDWIFE (254101)

MATHEMATICAL LITERACY TEACHER (GRADE 10-12) (241422)

HOSPITAL PHARMACIST (251501)

RETAIL PHARMACIST (251503)

MATHS TEACHER (GRADE 4-9) (241301

SKILLS DEVELOPMENT FACILITATOR (224703)

INDUSTRIAL PHARMACIST (251502)

LEARNERSHIP MANAGER (223301)

VETERINARIAN (234701)

UNIVERSITY LECTURER (242101)

SKILLS DEVELOPMENT PRACTITIONER (223301)

ELECTRICAL ENGINEER(233301)

SOCIAL WORKER (272501)

PAEDIATRICS NURSE (254413)

REGISTERED NURSE (MEDICAL AND SURGICAL) (254408)

ACCOUNTANT (GENERAL) (221101)

REGISTERED NURSE (MEDICAL PRACTICE) (254409)

WELFARE WORKER (272603)

Scarce Skills 2011-2012

PROFESSIONALS

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1000

1095

1120

1210

1298

1469

1736

1805

1845

2000

2109

2197

2534

3246

4000

4392

4634

6701

8018

8228

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

ELECTRICAL ENGINEERING TECHNICAL OFFICER (312302)

MECHANICAL ENGINEERING TECHNICIAN (312502)

CHEMISTRY TECHNICIAN (311401)

BOILERMAKER (3220301)

ANIMAL ATTENDANT/ GROOMER (361101)

FITTER AND TURNER (323202)

TOOLMAKER (323402)

CHEF (351301)

BUTCHER OR SMALL GOODS MAKER (351201)

MOTORCYCLE (AND SCOOTER) MECHANIC (321203)

CHEMICAL PLANT CONTROLLER (399201)

MILLWRIGHT (323501)

WELDER/ WELDER (FIRST CLASS) (322303)

BAKER (351101)

METAL MANUFACTURING MACHINE SETTER AND MINDER (399704)

PANEL BEATER (342101)

ELECTRICIAN (341101)

AUTOMOTIVE MOTOR MECHANIC (321201)

FITTER(GENERAL) (323201)

DIESEL MOTOR VEHICLE MECHANIC (321202)

Scarce Skills 2011-2012

TECHNICIANS

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500

500

500

500

500

500

750

750

750

750

750

867

1000

1000

1000

1250

1358

1736

2036

4000

7840

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

CASINO/GAMING DEALER (431301)

RESCUE FIRE FIGHTER (441202)

FACIAL THERAPIST (451101)

SLIMING THERAPIST (451101)

EYELASH AND BROW (451907)

GYM INSTRUCTOR/TRAINER (452101)

AROMA THERAPIST (451501)

REFLEXOLOGIST (451501)

MANICURIST (451907)

SOMATOLOGIST (451907)

SPA THERAPIST (451907)

DENTAL ASSISTANT (423201)

BEAUTY THERAPIST (451101)

NAIL TECHNICIAN (451907)

WAXING TECHNICIAN (451907)

MASSAGE THERAPIST (411601)

INTENSIVE CARE AMBULANCE PARAMEDIC (411102)

YOUTH WORKER (411706)

FIRE FIGHTER (441202)

PRISON OFFICER (442101)

ENROLLED NURSE (411401)

Scarce Skills 2011-2012

COMMUNITY WORKERS

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202

250

254

302

350

350

450

500

500

500

518

646

1000

1000

1436

1800

3000

10000

10000

20012

20537

0 5000 10000 15000 20000 25000

CONTACT CENTRE FORECAST ANALYST (541303)

IMPORT-EXPORT ADMINISTRATOR (591202)

PROGRAM OR PROJECTS ADMINISTRATORS (511102)

WAREHOUSE ADMINISTRATOR/CLERK (591106)

ACCOUNTING CLERK (551101)

PRODUCTION COORDINATOR (591102)

DEBT COLLECTOR (599301)

CONTACT CENTRE RESOURCE PLANNER (541302)

BOOKKEEPING CLERK (551201)

NOXIOUS WEEDS AND PEST INSPECTOR (599504)

DISPATCHING AND RECEIVING CLERK/OFFICER (591201)

BOOKKEEPER (551201)

LEGAL SECRETARY (521202)

CONTACT CENTRE REAL TIME ADVISOR (541301)

GENERAL CLERK (531101)

CREDIT CLERK (552201)

SKILLS DEVELOPMENT ADMINISTRATOR ( 599402)

OUTBOUND CONTACT CENTRE CONSULTANT (541102)

BACK OFFICE PROCESS CONSULTANT (561907)

INBOUND CONTACT CENTRE CONSULTANT (541101)

CALL OR CONTACT CENTRE AGENT (541401)

Scarce Skills 2011-2012

CLERKS

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262

540

900

1016

1500

1890

3480

3600

4376

5400

0 1000 2000 3000 4000 5000 6000

OFFICE CASHIER (631102)

MERCHANDISE PLANNER (639201)

CHECKOUT OPERATOR (631101)

MOTOR VEHICLE OR CARAVAN SALESPERSON (621301)

COSMETIC SALES ASSISTANT (621101)

SALES DEPARTMENT SUPERVISOR (621501)

RETAIL SUPERVISOR ( 621501)

SALES ASSISTANT (GENERAL) (621101)

RETAIL BUYER (639201)

SALES DEMONSTRATOR (639102)

Scarce Skills 2011-2012

SALES WORKERS

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280

333

474

488

600

603

700

1525

1660

1672

1710

1800

2200

3373

7018

0 1000 2000 3000 4000 5000 6000 7000 8000

PLASTIC FABRICATOR OR WELDER (711503)

SEWING MACHINIST (711601)

RUBBER MOULDING MACHINE OPERATOR (711506)

WATER PLANT OPERATOR (712909)

EARTHMOVING PLANT OPERATOR (721201)

BULK MATERIALS HANDLING PLANT OPERATOR (712902)

CNC (COMPUTER NUMERIC CONTROL) MACHINE OPERATOR)

ENGINEERING PRODUCTION SYSTEMS WORKER (712301)

CAB DRIVER( 731102)

TRAIN DRIVER (731301)

STOREPERSON/PACKER/SHELVER (741101)

PLASTICS PRODUCTION MACHINE OPERATOR (711504)

CHEMICAL PRODUCTION MACHINE OPERATOR (711901)

TRUCK DRIVER (GENERAL) ( 733101)

CRANE, HOIST OR LIFT OPERATOR (712101)

Scarce Skills 2011-2012

MACHINERY OPERATORS

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Let‟s look at what creates jobs.

200

230

250

250

300

300

310

400

400

500

848

1020

1142

1508

1610

0 200 400 600 800 1000 1200 1400 1600 1800

TRUCK DRIVER'S OFFSIDER (891102)

ABLE SEAMAN (899201)

ALUMINIUM INSTALLER/ JOINER (832201)

AUTOGLAZIER (899402)

STEEL FIXER (821703)

PLASTICS AND COMPOSITES FACTORY WORKER (839201)

WOOD FINISHER (839402)

DRYCLEANER (811502)

EVENT SUPPORT ASSISTANT (899802)

TAKEAWAY COOK (851101)

PRODUCT EXAMINER (839301)

PEST OR WEED CONTROOLER (841902)

FORESTRY WORKER (841301)

METAL ENGINEERING PROCESS WORKER (839101)

SEAFOOD PROCESS WORKER (831303)

Scarce Skills 2011-2012

ELEMENTARY WORKERS

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11. WHAT CREATES JOBS? This section will focus on what creates jobs for South Africa. I offer briefly a few considerations. # Education Premium: The education premium, the payoff for earning a tertiary qualification, is likely to grow into the future. People with university degrees are likely to get an increasing share of the jobs created. Tertiary unemployment is in the region of 5.9% compared to the national average of 25.3%. Heavy investments should be made in this sector. The quality of learnerships should be improved. Industry should be assured that graduates from the learnership system are technically competent. Funding should be skewed towards higher level learnerships. # Industry Attraction: Research shows that job generating industries are likely to be in the services sector in information technology, finance, wholesale & retail, health care and logistics. In middle-income countries, the services sector contributes overall almost half of GDP growth, 85% of net jobs is likely to come from services. Government simply cannot ignore this sector in favour of others. As the economy upgrades it makes a natural progression to a knowledge and service economy. Jobs will continue to be created in manufacturing but mainly in the high skilled categories. Manufacturing is unlikely to show net job growth in the future. #Green Jobs: The New Growth Path (2010) is pinning its hopes on creating new

jobs through greening the economy. Yet the clean-tech sector is too small at this stage to address economy-wide unemployment. However, low tech green jobs such as improving building installations and replacing obsolete heating and cooling equipment have a greater potential to generate jobs than the development of renewable energy solutions. For policy-makers concerned with reducing carbon emissions in the short-term pushing the adoption and diffusion of low carbon technologies is likely to make a bigger impact than technology production alone. #Start Ups: The debate over whether small or big firms create more jobs is misleading. The real distinction is between old and new firms. Net job increases are likely to occur with start-ups. In a given year, employment reflects the ups and downs of the business cycle. But over longer periods, almost all jobs growth comes from new firms. Even successful firms succumb to threats: new competition and technologies; mature markets; shifting consumer tastes; poor management and unprofitability. A firm founded today has an 80% chance of disappearing over the next 25 years.

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#National Competitiveness: According to the Global Competitiveness Index rankings SA was ranked 45 in 2009/2010 and 54 in 2010/2011 (WEF 2010). We are also ranked 67 in the World Competitiveness Yearbook for starting a business (World Bank 2010). South Africa‟s record of the ease of doing business should be improved because without it, there will be no strong job growth. In the area of labour market efficiency, SA was ranked 97. #Higher Value Addition: The surge of imported Chinese goods in SA has sparked

alarm in the manufacturing sector in recent years. Over the last decade, I worked with the clothing and textiles industries and witnessed its demise as a result of poor policy choices. Preserving existing jobs through protectionist measures and subsidies slowed productivity growth and weakened the competitiveness of clothing and textiles. Whenever these industries restructured, it came with a “bloodbath” of job losses. These industries would have been better-off if it focused on productivity improvements instead of lobbying government. Instead of trying to defend low-wage, low-skill manufacturing jobs, SA should focus on creating jobs that add higher value. For example, many services jobs offer higher wage than manufacturing and services is increasingly tradable internationally. Only if more productive companies with higher-value-added activities replace less productive ones can middle-income economies continue down the development path. South Africa should encourage the transition to higher-value-added activities, invest progressively in formal education and training, identify and exploit comparative advantages and push forward with reforms that create more competition, entrepreneurship and flexibility. #Infrastructural Investment: Government is committed to spend heavily on infrastructural investments. The improvement transportation networks, power grids, local public facilities and telecommunications are likely to create more lasting employment.

12. CONCLUSION

The SA labour market has been slow to respond to structural shifts in the economy. As the economy shifts from manufacturing to services, the productivity of human rather than physical capital becomes the key driver for growth and development. Increasingly, firms are using technology to exploit business opportunities. To compete in the global marketplace, these businesses need a highly skilled, productive and capable workforce. This is the essence of job growth. Only a small number of workers in the country possess these skills today. There are no “silver bullets.” Government initiatives are unlikely to wield results if not tempered by a sense of realism. My research shows that the most significant factor to reduce unemployment would come from upgrading the skills and qualifications of workers and new entrants to the labour market.

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Retooling the schooling system to create a high employment economy is as crucial as the transition from manufacturing to services. Tertiary education is a sure path to employment. Therefore I return to the title of the paper: job, jobs, jobs everywhere but none to be found. Why are there so many job vacancies and so much unemployment in SA?

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Comments on this paper can be sent to: [email protected] Or alternatively, Attention: Prof Hoosen Rasool

MANCOSA PO Box 49494 East End, Durban 4018 Tel: +27 31 3007200 Fax: +27 31 3007254

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