It's Raining Jobs !

Jobs, jobs, jobs.


"People want to be told ‘How are you going to help me right now’".

US President Barack Obama, at the start of his 2012 re-election campaign.



We urgently need sustainable, permanent jobs in South Africa – people need them now, not by 2015 or 2020. But to achieve this we need to be pragmatic about the world as it is now, not plan for the world as we would like it to be. Economists use the term the "real economy" to emphasise this distinction. For now, put aside the "knowledge economy" and focus on the real economy.

We have nearly one million vacancies for people with skills, against 30% of the population unemployed and with few or no skills. We do not have the luxury of waiting for longer term interventions to bear fruit, such as fundamental reforms to our education system, as urgently needed as those are.

The second reality is that the state does not have the human and financial resources to solve our economic problems on its own. That's why we only spent 68% of our infrastructure budget in 2011. Government's main role should be to create the opportunities for economic growth with jobs. It struggles to achieve just this. As President Zuma said in his recent State of the Nation address: "Government alone can't solve the country's challenges, but working together, solutions are possible".

What are those solutions in the very short term? Some of the answers lie in the nexus between the economic policy documents South Africa has seen in the past twelve months, from Ebrahim Patel's New Growth Path to Trevor Manuel's New Development Plan, and to the DA's 8% Growth project (still a work in progress), and even in the depths of the convoluted Industrial Policy Action Plan (IPAP 2). There is common ground to be found here about jobs on the scale and of the type we need now.

By delving through these documents and applying some practical thinking, here are some suggestions, from A-Z, on how to create lots of new jobs, fast, over the next two to three years (the list is not comprehensive):

AFRICA: Start refurbishing every South African border post now to ease the flow of traffic in trade and tourism.

APPRENTICESHIPS: The SETAs have destroyed apprenticeships. Abolish the National Youth Development Agency, use the funds to promote blue collar jobs and offer full free FET education to all comers. Link properly capacitated FETS, and the few SETAs that work, directly to individual businesses offering internships, so that graduates do not emerge with worthless scraps of paper. They have been lied to enough. Offer tax rebates, funded by underutilised SETA levies, for private sector training linked directly to jobs.

BROADBAND: Roll out universal access at affordable prices to every citizen across South Africa, using PPPs, as the Western Cape is currently doing, and Gauteng is contemplating doing. It has a direct and proven link to GDP growth.

CORRUPTION: Save R30 billion a year (at least) by putting more big men in jail. Give the money back to the taxpayers – or pay off the Gauteng Freeway Improvement Plan in cash.

CRIME: Crime has now become (in Gauteng at least) one of the single biggest obstacles to small business growth. A 6% decline is hardly skimming the tip of the iceberg.

ENERGY: Energy is the lifeblood of the industrial revolution, whether in the form of coal and water, petrol or gas, or nuclear energy. Provide it at affordable prices, encourage private sector and SADC provision, and remove one of our two major limits to growth above 5% per annum.

ENTREPRENEURSHIP: Introduce courses on it at every public school in South Africa, along with basic economics (like Maths "literacy").

EPZs: While we dither about IDZs, declare every local airport an export processing zone. For instance, by linking Rand Airport with the Johannesburg Fresh Produce Market you support local emerging farmers and others with export opportunities to the sub continent.

FRANCHISING: Look at the McDonald University type of training from zero (to name but one example).

GREEN ECONOMICS: Establish recycling depots and payment systems in every village and township in South Africa.

HOUSING: Design new housing projects around local economic development, not adding LED as an afterthought.

INFORMAL SECTOR: There are about 3 million South Africans working in the informal sector, providing goods and services of every imaginable kind to their fellow citizens. Support them AFTER CONSULTING THEM FIRST ON THEIR NEEDS with, for instance shared equipment (compressors, generators, power tools, etc.). Don't allow bureaucrats to take over and don’t expect these vibrant entrepreneurs to accept the blessings of SARS, VAT and DTI company registration procedures in return.

INFRASTRUCTURE: Drop the suspicions about the private sector and get serious about public-private partnerships (PPPs), otherwise it will never happen. When your house is on fire, you don't quibble about who can help put it out. Remember also that investment in productive infrastructure is what is needed. Nkandla's infrastructure, for example, does not qualify. Allow mines and industries to build their own infrastructure and bypass Transnet if necessary.

LABOUR: While we wait for the big debate about labour policy to one day reach a conclusion, we can in the short term reform two utterly destructive measures against jobs – first being to block the extension of Bargaining Council agreements on wages designed for big business and organised labour to SMMEs (which create the bulk of new jobs) making dismissal, and therefore hiring, all but impossible; the second being to reject attempts to ban labour broking, which accounts for 30% of the current workforce. Relax laws on dismissals for SMMEs below a certain size (50 employees?).

METROS: Metros must train their own blue collar workers to meet their own needs. Cape Town does, using abandoned parastatal training facilities.

POLICY: Restore certainty about policy on the two main generators of the sorts of employment we need right now: mining and agriculture. They are the largest employers of unskilled workers. That means government must decide for once and for all on its policies, and speak with one voice on the topic. Investors demand policy certainty more than any other single criterion for new investments, for obvious reasons.

PROCUREMENT: Pay suppliers within 30 days. Otherwise you destroy emerging enterprises. Gauteng still can't do this.

RED TAPE: Slash unneeded and obstructive red tape in a concerted manner, and in cooperation with chambers of commerce, black and white, on the lines of the Western Cape's "From Red Tape to Red Carpet"model.

RURAL POVERTY: Launch a major expansion of rural road building and maintenance (gravel roads). It will give small scale farmers vital access to markets, and poor people access to government services and grants.

SMMES: Provide tax incentives (as Finance Minister Gordhan starts to do in his Budget) and combine all state-linked finance institutions into one that lends at more favourable rates than the banks do. Involve private sector SMME specialists and the banks on tender and SMME support boards, and give them executive powers.

SMME SUPPORT AGENCIES: Forbid any public SMME support agency from counting "business plans" as productive training. They are usually little more than business suicide notes. Instead, ask people what they want and deliver it: then follow up with mentorship support.

SOEs/SOCs: Since government is determined that state-owned companies will play a central part in the equation, don't wait for an end to that argument, but allow competition with every SOC, starting with ESKOM – and not just from local suppliers but also from SADC countries. They can use the money we pay them to buy our goods and services, much as China keeps the US economy growing.

TOURISM: It seems SAA will also be with us until the Second Coming. Until then, adopt an open skies policy for other airlines. SA is a long haul destination in which flight costs are a major component. Tourism is a big creator of both SMMEs and semi skilled jobs.

VOTE: Vote the bums out, as the Americans say.

YOUTH: Implement the youth wage subsidy programme (whether the DA's version or Pravin Gordhan's) with immediate effect.

(Note: This article appeared as an op ed in Business Day, 24/2/2012)