SA heading for more job losses

Unemployment could grow to 12m in the next five years.

JOHANNESBURG – Recruitment giant Adcorp says restrictive labour laws are the major obstacle in the creation of jobs in South Africa with unions making unrealistic demands and pushing up entry-level wages for first time job seekers. While this might not be new, Adcorp CEO Richard Pike says should the current trend continue, the number of unemployed could grow to a staggering 12m in the next five years.

Pike says the overwhelming majority of unemployed are black and under the age of 24. He says research has shown that while wages have increased, productivity has decreased significantly, prompting many companies to opt for automation instead of employing a workforce which is largely unreliable, often due to industrial action.

Pike says while the official unemployment rate has been set at 25%, the unofficial level is more realistically fixed at 37% amounting to between 6 and 8m South Africans being without work. He says some companies have ceded to exorbitant wage demands, only to ultimately be forced to retrench workers to make up for the financial shortfall. He says labour intensity fell by 8.1% in 2009, meaning it took 36% fewer workers to produce a given level of production.

via SA heading for more job losses – Moneyweb

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