South Africa loses 171 000 more jobs in first quarter – Entrepreneurship is the solution!

# Official unemployment rate rises to 25.2%
# Most jobs lost in Limpopo and Gauteng

Employment fell 6.1 percent in the first quarter of this year, compared with the same quarter last year. South Africa shed 171 000 jobs in the quarter – a sign that, while the recession may be officially behind us, the effects will be long-lasting.

According to Statistics SA’s Quarterly Labour Force Survey, released yesterday, the unemployment rate rose to 25.2 percent, as heavy job losses in the formal and informal sectors outweighed those jobs created in agriculture and private households.

Patrick Craven, the spokesman for trade union federation Cosatu, described the job losses as shocking. “It’s clear we are not coming out of a recession as far as workers are concerned.”

The number of discouraged work seekers continued to rise and 1.84 million people have given up looking for work, 153 000 more than in the previous quarter.

Jaco Kleynhans, the spokesman for trade union Solidarity, said with the expanded unemployment rate rising to 32.5 percent from 31.1 percent in the fourth quarter, unemployment was now the biggest problem in South Africa.

“We are close to saying that a third of South Africans are unemployed. It’s a crisis. We cannot fix social problems such as crime if you don’t deal with this,” Kleynhans said.

The hardest hit sector was finance with 126 000 jobs lost, followed by construction and trade. And the worst affected province was Limpopo followed by Gauteng.

The Western Cape and KwaZulu-Natal created 21 000 and 9 000 jobs respectively.

The survey, which is the broadest measure of employment, is a household survey of 30 000 homes.

The job losses recorded in the first quarter follows the creation of 89 000 jobs in the fourth quarter last year, bringing total job losses for last year to 870 000.

Craven said the fact that job losses had continued, despite the recession being officially over, was proof “we have a huge emergency”.

He said changes in strategy should include addressing the value of the currency, which makes it difficult to export; addressing monetary policy where big cuts in interest rates were needed to boost investment in manufacturing; and resisting attempts by the World Trade Organisation for South Africa to reduce the protection in place as the country had already cut trade protection “too much and too quickly”.

Kleynhans said a solution should include a government master plan to support exporters, assisting with, among other things, the infrastructure or financing required.

Pan-African Capital chief executive Iraj Abedian said the job losses in the first quarter were the result of decisions made six months earlier. He said cutting jobs was a lengthy process due to labour laws.

“What is surprising is the quantum which signifies that last year the mood in business was very gloomy.”

Abedian said prospects had become more favourable as the world economy had turned the corner and some sectors in South Africa were showing signs of revival. Therefore large scale job losses in the future were unlikely and in the third quarter and fourth quarter business should be expanding and creating jobs.

But he warned that manufacturing was hurt by the strong rand and there might be more job losses in this sector.

Abedian said the first-quarter job losses were unlikely to influence the decision on interest rates as job losses related to conditions last year. Any rate cut would be based on consumer confidence.

The solution to unemployment is Entrepreneurship. Advertise your skills for free on the Rent-A-Skill website (http://www.rentaskill.co.za).

By SAMANTHA ENSLIN-PAYNE