The Black Business Council says it is ‘both a crisis and indictment on us all’ that more than 520,000 people have been added to the unemployment pool over the last quarter.
It follows a quarterly Labour force survey released on Monday, by StatsSA which showed that South Africa’s rate of unemployment has risen to 26.7%, up from 24.5% in the previous quarter.
“This is a powder keg that undermines our progress as a nation and which, if left un-tackled, could reverse our many gains since democracy was attained,” it said.
It noted that weak economic growth has contributed to the decline in job creation and retention, with the largest job losses being in the manufacturing, construction and trade sectors.
“We also need to get to grips with better enabling the informal sector and elementary workers which are the most vulnerable to a negative economic climate. The need for structural reform in the economy cannot be overemphasized – we need all hands on deck and to abandon the partisan approaches we have taken,” the council said.
The expanded unemployment rate which includes those who were available to work but did not look for work in the reference period also increased by 2.5 percentage points between Q4: 2015 and Q1: 2016 to 36.3%, StatsSA said.
According to the BBC, the statistics further revealed that the growth in unemployment links significantly to the lack of education and tradable skills by majority of the population, in particular black youth.
“We call on private sector to play its part in tackling this crisis and to implement urgent interventions by, amongst other things, making use of accumulating Skills Development Levies and the Employment Tax Incentive, which incentivise employers to not only improve the absorption rate but also enhance skills amongst the employed so as to enhance their (global) competitiveness.
“We cannot expect to have any productivity improvements and flexibility in the labour market if we are not helping the employed improve their marketability while improving the feeder network in parallel,” it said.
The business council said: “more radical transformation measures need to be effected such as the accelerated development of black industrialists as this will not only boost economic growth in key sectors most affected by the job losses, but furthermore diversify the employment opportunities available as more players participate in the market.”
It called on the government to substantially grow funding for the likes of the National Empowerment Fund so they can continue to build a deeper pipeline for the Black Industrialist programme.
The council said it is encouraged that government, labour and business are working together to avert a sovereign rating downgrade.
“We therefore implore both private sector and government to work aggressively in partnership to ensure that much needed and now increasingly urgent transformation objectives are effectively achieved to create an environment conducive for job creation and skills development, through measures that stimulate and sustain industrialisation and increased economic growth.”