Tuesday, January 26, 2010

South African Workers Stuck in Catastrophic Recession

SA workers 'stuck in catastrophic recession'


Workers have yet to see any proof of a recovery from the recession, despite what academics and the media are saying, according to Zwelinzima Vavi, general secretary of the Congress of South African Trade Unions (Cosatu).

"On the contrary," Vavi told a training workshop for the National Economic Development and Labour Council (Nedlac) Labour Sector School, "they are still stuck in a catastrophic recession, marked by rising unemployment, poverty and inequality. If there is any growth, it is certainly jobless growth."

He said that when Cosatu predicted that a million jobs would be lost during the course of 2009, it was accused of exaggerating. "But, tragically, our forecast was, if anything, modest, as there were nearly a million retrenchments in the first three-quarters of the year alone. When the 2009 final quarter's figures are released, it could be well over a million lost jobs."

He added that unemployment has shot up, from 23,6% of the labour force in the second quarter, to 24,5% in the third quarter of 2009. "The more realistic expanded definition of unemployment, which includes those who have given up looking for work, climbed from 32,5% to 34,4% in the same period," Vavi said. "This means that a staggering 4,7-million South Africans are now without work, way above the levels in any comparable country."

The general secretary said that the capitalists now say that the effects of the global crisis on South Africa have been muted. He observed that they may have been muted for the capitalist class, whose profits have been rising more than the economy throughout the lifespan of our democracy.

"But for the workers it is a different story. The previous administration's 'sound and prudent' policies -- their name for anti-worker, free-market, neoliberal policies -- were celebrated by bourgeois ideologues precisely because they boosted profits while cutting the working class's share in the revenue from economic growth.

"Because the purchasing power of the working class is shrinking, it will be harder for the economy to create new jobs. Despite rising profits, the incentive to invest is blunted by falling sales, due to the fall in working-class incomes.

"So production shrinks and jobs continue to be lost. This process assumes a life of its own, and becomes self-reinforcing unless measures are put in place to arrest the decline in workers' incomes and to pave a way for a recovery through stimulation of aggregate demand.

Vavi acknowledged that the current slowdown in the South African economy is partly a result of the global slowdown, but he insisted it was also a result of mismanagement of the economy by the previous administration and the monetary authorities, particularly the South African Reserve Bank, with its overriding concern over inflation to the detriment of growth and employment.

"By the fourth quarter of 2007, it was obvious that the economy's growth rate was declining," he said. "By then it was official that there was a global financial crisis, which is how every crisis of capitalism first appears. Yet the Reserve Bank continued to increase interest rates, putting further strain on the growth rate."

He added that the trade unions are increasingly nervous at the slow implementation of the ambitious framework plan for tackling the recession.

"We need action," he said, "and Nedlac has a central role to play in getting all the stakeholders, but especially government, to turn fine words into deeds and start to create quality jobs."

The same applies to the government's promise to create 500 000 employment opportunities, which is faltering. "Much more needs to be done to make sure we achieve and preferably surpass this target," Vavi said. "The fact that 73% of those currently unemployed are under 35, and the recent entry of over a million school leavers without any matric or other qualifications and virtually no possibility of a proper job, make it absolutely imperative that we take them off the streets and give them opportunities to work and train.

"Another key issue facing Nedlac and the country in 2010 is the continuing decline in the quality of employment, with the persistent casualisation of labour, driven particularly by the labour brokers. More and more permanent, secure and at least relatively well-paid jobs are being replaced by temporary, insecure and generally low-paid jobs, where workers' rights are flouted.

"This super-exploitation of workers through casualisation must stop." -- I-Net Bridge

Source: Mail & Guardian Online
Web Address: http://www.mg.co.za/article/2010-01-25-cosatu-workers-stuck-in-a-catastrophic-recession

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