Thomas Johnson - Economics Blog

In the context of dire social and economic prognosis, including the extraordinary high rate of unemployment, one cannot argue job seekers, including the skilled, are easily finding employment. Over the past year two organisations - one large and one small - that bothered to tell me I didn't make their short lists, said they received hundreds of applications from "highly qualified" people. This does not indicate so-called critical skills are scarce. Therefore, I wonder where this economic activity is, this surge of output where scarce skills are in demand and are indispensable, the shortage of which is harming the country’s and province’s economic prospects. What prospects? Isn’t it more accurate that with the economic and political situations being what they are, there is no new work? South Africa is socially and economically dysfunctional with no sign of improvement. The government has interfered in almost every aspect of the economy, deterring investors, grow...

In the twenty years since South Africa's democracy in 1994 the GDPs of emerging markets and developing countries like Brazil, India and Turkey increased on average by 115% while South Africa managed only 33%. Until 2008 the world’s economic growth expanded for a record period, but South Africa lagged behind, unable to capitalise on demand for the country’s resources and exports. The average growth for the past 20 years has been 3.1%, far below the 5% to 6% required to create employment. Growth for 2014 has been revised downward to 1.4%, in the range where it has been for the past 5 years, last seen in the late nineties. Corruption is conservatively costing the country R30 billion a year – it’s probably twice that – and wasteful expenditure R22 billion. Add the stupendous cost of consultants because government workers are unable to do the jobs they are paid to do, annual billion rand bail-outs of national airline SAA (the ANC cadre-deployed board, since resigned/fired, has ...

Employer prejudices and preferences are an obstacle to employment. When firms advertise vacancies, many have a long list of requirements, most of it repetitive. An accountant or engineer can summarise his core duties in a few lines. Why would it need two pages to describe? This overkill is because employers are casting a broad, generic job requirement list hoping to catch that “perfect employee”. Or equally, they don’t know what they want. They also pepper the advert with MBA-speak like “strategic” and “governance”. My former employer, who fired - they called it "retrenchment", though - me in 2012 allegedly for having been "over-qualified" and earning too much (that wasn't the reason but because I had resisted their wasteful and possibly irregular accounting practices), had a job description for my successor “bookkeeper” that exceeded the duties of a finance officer (me), and included duties unknown and irrelevant to the organisation. They could...

It’s common knowledge service delivery at municipalities in particular – provincial and state departments are also affected – have collapsed or are near collapse due to the lack of trained engineers, technical people and managers. Unqualified cadres are appointed to senior and managerial posts. The Eastern Cape and Limpopo province, whose departments, especially health and education, Treasury placed under administration, are indicative of this refusal to appoint appropriate skills, not the skills shortage per se. In 2014 it was reported doctors in public hospitals are leaving because unqualified cadres are being appointed. At a municipality in Free State province, I think it was, people got ill from drinking unclean water because the municipality did not know how to maintain and repair a pump. Grahamstown suffered water shortages because of the near collapse of the municipality due to mismanagement and corruption, which often go hand in hand. There is a “continued ...

The City of Cape Town head-hunted a young black woman, at only 30, a relatively young age for the post, to fill an affirmative action quota. They offered her a salary above that which the post grade was entitled to. She lacked statutory registration, a requirement of the professional post, but was appointed on condition she would qualify. Five years later (2014) she had not obtained registration. Qualified white employees were overlooked for the job. Employment equity law compels employers to fill quotas, but frequently blacks lack the required education and experience. When they fail, other staff must pick up the slack. Because they are in demand, they tend to job hop, attracting above average salaries along the way, leaving their former employers at a disadvantage. If qualified black candidates cannot be found, it’s commonplace, especially among government departments – private companies are not excluded, though - to leave posts unfilled rather than appointing candidate...