LABOUR POSITION PAPER FOR THE GROWTH AND DEVELOPMENT SUMMIT

11 April

COSATU welcomes the decision to fix a firm date - June 7 - for the Growth and Development Summit (GDS). Organised labour at NEDLAC, consisting of COSATU, FEDUSA and NACTU, today released its initial position paper on unemployment and investment for the Summit. It is sent as an attachment to this message.

Labour's key aim for the GDS is to shift the economy toward job-creating growth.

COSATU will continue to seek a consensus with its Alliance partners and civil society around a programme for Growth and Development, based above all in measures to generate employment and enhance the quality of life for our people. On this basis, we will be able to present a People's Programme to the GDS that lays the basis for an all-out attack on poverty and inequality and puts us onto the road to full employment.

Our position paper starts by outlining the problem: the increase in joblessness from 15% to 30% of the labour force since 1995; a rapid fall in real incomes from work, as more people are pushed into the informal sector and casual labour; and very low investment, currently well under 15%.

The causes of soaring unemployment are:

• The deep-seated dualism left by apartheid, which denied the majority of our people access to productive assets, the financial sector or markets, and certified skills. As a result, they are still largely shut out of the economy except as labour.
• The restructuring of the formal sector since the mid-1980s, which has seen a rapid decline in employment.

To resolve these problems, Labour proposes, amongst others:

• Employment creation must be a central priority for all government policy. Government's economic and social programmes should be much more serious about jobs. Both the public and private sector should have to include in their annual reports an assessment of their progress in this regard. In addition, employment should form part of the "three-bottom-line" approach to accounting and to the JSE's proposed sustainability index.

To restructure the formal sector:

• Business and government should take a more active role in driving sector job summits to help restructure the economy toward job-creating growth.
• The NEDLAC parties should define core outcomes for SETAs and assess them against those outcomes.
• The parties should do more to promote labour-based methods in construction, including by developing model methodologies and providing training for project managers.

To overcome dualism:

• The state must do more to improve the asset base of the poor, including through land reform, provision of infrastructure and housing nearer to employment opportunities, restructuring of the financial sector and the extension of skills development.
• Much more should be done to integrate small and micro enterprise into the formal economy, without displacing better-paid and more secure jobs. Formal enterprise should face pressure to increase and diversify local procurement, and to improve their services for small and micro enterprise.

To reduce the cost of living:

• Government must do more to densify housing - which requires a fundamental overhaul of current subsidy programmes - and set guidelines to ensure that electricity, water, education, transport and other basic services are affordable for the poor.

Short-term measures should include:

• Publicly funded public works and community service programmes, especially for the youth, should create 500 000 person-years of positions, with a reasonable income.
• Government should ensure the social security system provides income relief for young unemployed people, who are currently not eligible for any systematic government support. In particular, COSATU supports a Basic Income Grant to achieve this aim.
• Government and parastatal procurement practices must be aligned much more rapidly with the requirements of the Proudly South African campaign. Procurement practices should ensure the greatest possible support for domestic employment. These institutions should be required to support, as far as possible, the development of local producers to replace goods and services that they currently import.
• Government and the main parastatals should in future ensure that any restructuring process contributes to job creation, at least indirectly and in the medium term.
• Formal employers should institute more active labour market policies, abiding by the NEDLAC Social Plan agreement and ensuring utilisation of the Workplace Challenge programme.
• Government should explore ways to ensure a more stable exchange rate that is favourable to manufactured exports. The rand is currently overvalued, just as it was previously undervalued.

In the context of an integrated development strategy geared to employment creation, labour will contribute:

• Continued strong engagement in the sector job summits. Labour has already dedicated considerable resources to this purpose, including establishing a special project with over five full-time policy analysts.
• When a clear perspective on areas for job-creating growth is agreed, we will work to establish appropriate investment vehicles and guide pension fund investments in that direction.
• Given a moratorium on retrenchments, work in public service and private sector to support progressive restructuring and productivity increases, including support for skills development and work reorganisation.
• Support for public works and community service programmes and for co-ops, in line with the proposals above.
• Continued proposals and innovative organising work to address the challenge of casualisation and the informal sector and mainstream employment into "decent work."

Patrick Craven
Acting COSATU Spokesperson

patrick@cosatu.org.za
082-821-7456
339-4911

Read the Draft Labour Position Paper [PDF]