Wednesday, January 25, 2017

COSATU is Alarmed by the Ongoing Job Losses
The Congress of South African Trade Unions {COSATU} is alarmed and deeply concerned by the ongoing jobs losses in a number of economic sectors. We are troubled by the reports that AB InBev has offered voluntary severance packages to some of its middle managers, despite its commitments on post-merger employment. This follows Anglogold Ashanti's announcement that it plans to retrench 849 workers in all its operations in South Africa; and the jobs carnage currently taking place in the poultry industry.

We are calling on government to do something about unemployment and put measures in place to stem the tide of the ongoing retrenchments. COSATU has been warning that while investment in South Africa through mergers and acquisitions has increased, these investments have resulted in the loss of jobs over time in the acquired companies. The AB Inbev merger has resulted in retrenchments by a company that has been solidly growing and that has not undertaken any retrenchment exercise in decades. The same workers, who have carried South African Breweries on their backs are now being put to pasture because the company is chasing profits.

Whilst foreign direct investment is to be welcomed it has negative impact on the economy in particular through repatriation of profits, for instance the payment of dividends. These payments have caused the current account to be in a deficit as payments to the outside world tend to exceed the inflows.

Instead of increasing their investment in SA, companies such as SASOL and Steinhoff have decided to invest more developed economies outside the country. The outward foreign investment has not resulted in high increases in a number of jobs created or improved wages for the workers. This is because in this country we do not discourage companies from using foreign inputs, goods and services like other Western countries do.

This jobs crisis calls for an activist government that will deliver on the promise of making sure that every cent spent by government creates jobs ,and that will also have a hands on approach in the economy.

Government needs to find ways of dismantling the legacy of concentration and domination of the South African economy by a few firms, and that has left very little space for SA small firms to succeed and create jobs for the 9 million unemployed workers. COSATU wants to see government addressing the issue of high administered prices such as electricity and transport costs and the non- availability of cheap finance for small businesses.

We cannot obsess over Foreign Investment and treat it as a panacea to all our unemployment and economic problems ,because despite an increase in investment both local and foreign, we have not seen an increase in the rate of job creation.

Despite the loss of over 1 million jobs since the 2008 crisis, companies have continued to increase their profits. This is the time for government to do something about the economy and do it fast.

Issued by COSATU

Sizwe Pamla (National Spokesperson)
Tel: +27 11 339-4911 Direct 010 219-1339
Mobile: 060 975 6794

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