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Jobless stats are wrong and red tape stalls growth - NGO head
July 28, 2009
Peter Kratz is the national director of Men On The Side Of The Road, an NGO that connects unemployed low- and semi-skilled job seekers with potential employers through 15 worker collection points around South Africa. He spoke to Ingi Salgado about the unemployment crisis.
Are first-quarter job losses being reflected in Men On The Side Of The Road's database?
Interestingly our performance statistics have gone up significantly over the past year, by more than 50 percent - that's measured by the number of days we have placed people into work. I would expect that's partly because employers tap into the casual labour market to compensate for the jobs that have been lost. We also saw some increase in the presence of men looking for work.
Is Statistics SA's official unemployment rate of 23.5 percent, as measured by the Quarterly Labour Force Survey, a realistic point of departure from which to develop a long-term strategy to create jobs?
We don't believe it's a true reflection of the situation that people find themselves in. A lot of people who are really unemployed are either not included in the stats at all because they're regarded as no longer looking for work, or they're included as being temporarily employed when in fact they are standing on the side of the road looking for work. As far as we're concerned, the number is approximately half of what the true problem is.
So we're sitting with an unemployment rate above 40 percent?
We wouldn't be afraid of justifying numbers of 40 percent to 43 percent.
How do uncertainties around the statistics actually impact on the jobless?
If the whole of South Africa was talking about the 10 million people who are excluded from earning a decent living - people who have no certainty about how they're going to live for the next couple of weeks - then our society would take it a lot more seriously.
You have accused the government, particularly the Department of Labour, of being so tied up in red tape as to be ineffective. What is it doing wrong?
The Department of Labour has a lot of rules and regulations (employers have) to comply with, which are predominantly put in place to protect formal sector workers. They are implemented without consideration for the informal sector, and the consequence is that informal sector jobs are never going to be created in a way that they could be with a different approach.
For example, they have a big database available for unemployed people to register on, and they attempt to link those unemployed people to potential employers. But only employers that are fully registered and compliant are allowed to get information from that database.
Now I don't have a problem with the Department of Labour seeking compliance. What I have a problem with is the way they're leveraging unemployed people to ensure compliance. Their compliance officers should do their jobs, and let other people work.
What role does the expanded public works programme play in solving unemployment?
It's a social intervention to solve dire poverty, and it's a training programme. I don't think it's a job creation programme. It's aimed at letting people have an opportunity to work for a short period of time, and imparting skills to people who participate.
One of the biggest problems with the expanded public works programme is once they've trained a person and given them four or five weeks' working experience, they don't make that information available to potential employers.
That links back to problems with the Department of Labour's database?
In a sense. I don't want to become too critical of the Department of Labour because they've got rules to apply to the formal sector. What they are lacking is the capacity to see that the informal sector needs to have a different set of rules.
In a sense, they're constrained by the strong formal labour market and labour union influence.
Is there a discernible sentiment around organised labour among the people on your database?
I'm not aware of anybody having a beef with organised labour.
Is South Africa investing enough money in solving the unemployment crisis?
No. In the long term we need not fragmented public works programmes but a commitment so that people trapped in dire poverty can work their way through the process. We've got to fix investment in human resources and education. It's a generational problem that has to be taken on as opposed to a "500 000 jobs before Christmas" political statement.
How much should we invest?
I'm not an economist. We don't have the capacity to design models around this. But if South Africa invests billions in arms, and education, we should invest in our human capital at all levels.
In what way should business come to the party?
At the end of the day they're here to make money and drive their businesses appropriately, but they are also part of our society and their success will depend to a certain extent on the success of our society.
Instead of trying to minimise labour costs and interaction with people, we should be looking the other way around. But that requires flexible labour legislation, particularly with regard to labour-intensive programmes.
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