Adcorp’s employment index falls

The Adcorp Employment Index declined by an annualised 0.13 percent in December, the employment agency said yesterday.

It said the number of permanent workers decreased by 0.21 percent; the number of temporary workers increased by 0.07 percent; and the number of agency workers increased by 3.84 percent.

The index says the retail and wholesale trade sector experienced an increase in employment of 9.58 percent, and the trade-supporting transport, storage and communication sector increased employment by 4.60 percent.

It says this suggests that the year-end retail season was somewhat more buoyant than many analysts had predicted.

Adcorp says significant job losses occured in the construction sector, where employment fell by 10.93 percent, and moderate job losses occured in the financial services sector, where employment fell by 4.46 percent.

It says this suggests that South Africa’s economic recovery remains patchy and uneven, and isolated in particular sectors.

The index says employment of high-skilled workers, notably managers and professionals, as well as sales and service workers increased significantly, by 3.64 percent and 8.70 percent respectively.

Unemployment for December was focused among low-skilled and manufacturing workers, where employment declined by 5.75 percent.

Adcorp says the risks to South Africa’s employment outlook remain acute. Substitution of capital for labour rose steadily between 1970 and 2010, and the ease of replacing workers with machines is currently at the highest level in history.

In an analysis, the index says that one of the striking features of the unemployment debate in South Africa is that high wage levels have been sidelined as a possible cause of unemployment. Many other factors have been promoted directly or indirectly as causes of unemplyment, including a supposed pervasive skills shortage and a purported bias against the employment of black graduates and professionals.

Adcorp says: “Naturally, it has been politically expedient to treat the employment consequences of high wage levels as marginal or negligible, since doing so diverts attention from orgainsed labour’s monopoly over the wage setting process. Increases in total remuneration during 2010 reached 16.8 percent, which far exceeded both the increase in the cost of living (3.5 percent) and the growth of labour productivity (-0.4 percent). Real remuneration is now increasing at an unprecedented rate.”

It says trade unions are permitted to act as labour cartels by the highest law in the country. As such, collusion to bring about higher wages is an inalienable right for workers. Additionally, collusion between workers is deeply embedded in South Africa’s labour market institutions.

Adcorp says the Labour Relations Act, in particular, ensures that wage levels can only rise, irrespective of an employer’s underlying economic vitality, with the result that retrenchments (as opposed to, say, wage freezes or reduced benefits) are an inherent outcome of the labour relations system. - Wiseman Khuzwayo