E CAPE JOBS BLOODBATH: DAILY DISPATCH

69 000 newly unemployed in Q4

THE Eastern Cape suffered a jobs bloodbath at the end of last year with 69 000 people losing their jobs in the last three months of the year.

This is according to the Quarterly Labour Force Survey (QLFS) report released by Statistics South Africa (StatsSA) on Tuesday.

The province fared the worst compared with other provinces. It is followed by KwaZulu-Natal, which lost 40 000 jobs, while Gauteng lost 16 300 during October to December 2012.

Business slammed a trend towards tighter red tape for discouraging entrepreneurship and causing job losses in the province and elsewhere.

Border-Kei Chamber of Business (BKCOB) executive director Les Holbrook said this, coupled with rising costs, were forcing entrepreneurs to close shop.

Commentators presented an even bleaker prognosis amid a tough business environment marked by increasing labour costs, citing unusually high wage increases of up to 50% in sectors such as agriculture and mining, which in turn presented a threat of retrenchments.

In addition, exports were on a downward trend as demand remained weak in the European market, a destination for more than 30% of Eastern Cape produced goods.

According to Eastern Cape Development Corporation chief economist Mxolisi Lindie, agriculture and manufacturing sectors experienced the highest job losses at 26.6% and 13.6% respectively in 2012 compared with 2011.

“The sector that contributed to the job losses are agriculture where, yearon-year, the sector dropped by 17 000 (26.6%) from 64 000 to 47 000 while the manufacturing sector experienced a decline of 13.7% or 25 000 from 183 000 to 158 000 in 2012.

“The causes include the prolonged recession in the eurozone economy and sluggish growth globally.

“Manufacturing goods and agricultural products were the hardest hit by depressed export demand in the European Union and lower demand for commodities in emerging economies and China,” Lindie said.

“There has been an increasing number of workers who are discouraged to search for jobs, and that confirms our view of bleak economic conditions.”

Holbrook said dozens of Eastern Cape businesses were closing as it became increasingly difficult to be in formal business sectors.

“We are not brave enough to confront the questions of why businesses are closing. There is too much red tape in the formal sector.

“It’s easier to be in the informal sector where you don’t have to deal with employees, submit tender [bids] or pay taxes, rates or rent.

“We have to do something to support locally made goods instead of Chinese imports.”

Holbrook warned more job losses could be on the cards following the recent sector determination adjustment that saw the minimum wage in the agricultural sector increase from R69 a day to R105.

“The current labour conditions are not conducive for job creation. It is too difficult to employ with such demands for high salaries and decent work.

“Agricultural workers naively think there won’t be consequences but their wage increases will be followed by retrenchments,” Holbrook said.

The DA said the jobs bloodbath, coupled with poor service delivery, was a “ticking time bomb of anger” that people had with the state.

“The loss of 69 000 jobs in the last quarter of 2012 is a major setback for the economy of the Eastern Cape and will only add to the massive problem we face with poverty in this province,” MPL Bobby Stevenson said.

“The government is caught up in an ideological straitjacket which results in them failing to implement the right job creation policies.

“This, together with the implosion of service delivery and infighting within the ruling party, is destroying jobs in the Eastern Cape.” — siyam-