Zuma's Inadequate and Incomplete Jobs Package

The expanded definition of unemployment is  35,8% according to Quarterly Labour Force Survey (4th Quarter, 2010). It helps to say that a little more slowly, due to the gravity of the statistic. 3,5 out of every 10 economically active people are unemployed. Dig a little deeper, and the number of people is 7,3 million. President Jacob Zuma and South Africa’s citizens recognise it as national crises.  In this context, everyone wildly cheers as President Jacob Zuma expresses our hopes of higher unemployment in declaring 2011, the year of the job. This sense of crises however may leave us praising anything that supports job creation. Instead, as argued in this article, the Jobs Package is a useful start, but ultimately inadequate and incomplete.
Will more factories be created? Cape Town, Western Cape province: Factory floor of Hip Hop, a successful fashion label in the city centre. Photo: Rodger Bosch MediaClubSouthAfrica.com Read more: http://www.mediaclubsouthafrica.com/index.php?option=com_content&view=article&id=647&Itemid=75#ixzz1DdqFuAiB
Before explaining what is meant by inadequate and incomplete, it helps to reflect on possible criticism to this article. Those asking us to line up behind the Jobs Package, will remind us that:

  • You have to start somewhere
  • The state’s ambition must be matched with it’s capacity
  • President Zuma is placing small business on the agenda

Each of these arguments are valid, and provide a mixture of common sense and place emphasise on “getting behind the programme”. There is however an uncomfortable truth, when measured against the scale of the problem the Jobs Package is miniscule for three related reasons.
Acknowledgement: Photo courtesy of Media Club South Africa.

  1. Biased to the formal sector. Based on research by the Department of Trade and Industry [PDF Link],  one can extrapolate that the majority of business owners are black, but overwhelmingly in the informal sector.  The dominance of black business in the informal sector is potentially the strategic entry point to broadening black participation in the economy. The Presidential Jobs Programme however does not address this reality. After all, to access the majority of the programmes a company needs to be registered. The only reference to informal business are proposals related to the merging of Khula, the SA Micro-Finance Apex Fund and the IDC’s small business funding into a single unit.
  2. Links between economic and social policy are weak, especially for the young and unemployed. President Jacob Zuma argues that “insert quote on developmental state”. Evaluations of social grants show increases in the job search activity and attendance at schools. The links that currently exist would however be amplified if there was a social security system that provided support to the never employed.
  3. Incremental programmes will result in incremental results. The programmes outlined by the President are important in themselves as experiments in public policy interventions. However, the programmes do not support rapid changes to the structure of the economy. They are too small to have the desired long-term impact. As a society, we must be finding ways of running experiments at scale more quickly.

The silver lining is that President Jacob Zuma has emphasised the small business sector. This policy stance is a significant political commitment. It could be the start of what the ex-Brazilian Planning Minister Roberto Mangeibera Unger has called in an interview the “decentralised alliance between government and the little guy”.
Taken together, what we are calling the Jobs Package is inadequate and incomplete. We could dodge the question by calling it a useful start, but we will not do that. In the current conjuncture, government can do more, and we can do more as citizens. Zapreneur will hopefully be one platform amongst a multitude of platforms that helps us to see the way. Zapreneur succeeds not because it will provide the best analysis of South Africa, but because we contribute to changing South Africa.
Join us as we move from criticism to creating public policy alternatives.

Get offers from South African small businesses

ZApreneur -Publishing since 2011

FREE