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The Congress of South African Trade Unions (COSATU) notes the latest decrease in the expanded unemployment rate from 43.1% to 42.6% in the 4th Quarter of 2022.  Any decrease or stabilisation of the unemployment rate is welcomed. This comes on the back of similar decreases of 1% per quarter for the previous three quarters in 2022. 

However, this is not something to be celebrated because no society can sustain itself with an unemployment of 42.6%. We should not be proud when four (4) out of ten (10) people cannot find work to feed themselves and their families. 

The Federation is deeply worried that whilst we saw the beginning of what we hope is momentum in reducing unemployment over the course of 2022, this progress may be lost with the current rampant levels of load shedding. The fourth Quarter is also an outlier because the festive season part-time work triggered by festive spending work distorts the statistics.

It is more critical for government to move with speed to fix the obstacles hindering economic growth. To make a dent in unemployment and close the growing inequality, we need an activist government and a democratic developmental state that is capable of intervening effectively to transform economic relations. This is impossible in an environment where State Owned Entities(SOEs) and Development Finance Institutions (DFIs) are being weakened and have become ineffectual. The current unbundling and privatization of SOEs will only worsen unemployment.

The government needs to create an environment conducive to boosting the productive capacity of the economy and increase investment to ensure that increased demand can be met through domestic production, and not through greater levels of imported goods.

The private sector needs to come to the party and increase local investments and procurement and provide support for SMMEs. The private sector also needs to reduce the scandalous apartheid wage structure prevalent in key sectors and treat retrenchments as the last option. They need to justify and reciprocate the government’s continued use of over-generous and unconditional tax breaks and employment subsidies like the Employment Tax Incentive (ETI) and Youth Employment Scheme (YES)Programme by the government.

It is unacceptable that private companies continue to use tax breaks to accelerate automation and mechanisation. We reiterate our position that in an era of mechanisation and automation, we cannot overly rely on big corporations to help with employment creation.

Issued by COSATU