In a statement last week DA leader Mmusi Maimane claimed the DA-led created 487 000 jobs since 2009. This is fake news and must be treated with caution.
As the DA has often done, they claim credit for the for the Western Cape having the country's lowest unemployment rate, which is beyond their control. "The DA-led Western Cape is on the right track to creating opportunities for economic growth and jobs."
Maimane: "Since 2009 when the DA was elected in the Western Cape, 487 000 net new jobs have been created by the DA-led government. That’s why unemployment is the lowest in the country."
Note the "that is why" logical connector. However, his claim is misleading, and since they ought to know better, a false interpretation of economic data. The Western Cape has historically had a lower than the national unemployment rate, even when it was ANC-run, for various factors. In 2009 it was 19.2%, roughly where it’s at in 2018, compared to national 24.3%.
The province is part of a unitary state and must adhere to national policies and an economic environment that affects work, production and employment. While regions and cities can encourage investment in individual cases, investors look at a package of national and regional conditions before making a long-term commitment.
I dealt with the skills, jobs and growth conundrum in this article. Skills alone don't 'translate into jobs and economic growth but entrepreneurship, innovation and investment. Labour (skills) is an input into production like capital; it's merely a resource which without entrepreneurship and the idea or product, will remain redundant. Can there be economic growth without a skilled workforce? No.
In economics skills is a synonym for labour and jobs the productive use of labour.
If a motor vehicle is the economy, the transportation network is policy and economic environment. Getting to the destination is growth and development. The engine is the entrepreneur and innovation, idea and product that drives the vehicle. The fuel is investment capital, and labour and skills the wheels or other important component. The latter don't drive the vehicle, the engine does.
So saying labour creates jobs and growth – or labour creates labour as Bozzoli says – is fallacious, circular reasoning.
South Africa already spends 20% of its budget on education and its return is poor. TVET college students get full bursaries but many do poorly academically. Throwing money at problems, like Bozzoli and government want to do, is a politician's response to everything and easy when it's someone else's money - the taxpayers'.
Of course education is essential for economic growth and development. But a fly in the ointment in is there's almost full graduate employment - last I checked about 5% unemployment - and a huge surplus of labour (36% real unemployment) and real negative growth, which won't change for a long time to come, if ever.
So to disagree with Bozzoli, under present conditions there's nothing "guaranteed" about job creation and economic growth.
I get irritated with "experts", academics, politicians and journalists who confuse and conflate issues. They're supposed to have the facts and are in positions of influence. The lay public take what they say and panic or arrive at the wrong conclusions. One frequent misconception is confusing poverty and inequality as if they mean the same when it's not. The factors causing unemployment is another.
They've highly paid advisors and expertise and years of experience to know education, esp when there's already a surplus of skilled people incl the "elderly unemployed", in their case due to forced retirement and retrenchment, will not ameliorate unemployment and create economic growth. Incidentally, I'm one of the skilled superannuated.
It's not the public's job to advise them. Either they must employ better advisors or research the subject properly. There's no magic bullet for the economy but well-known, difficult structural measures they - the country's leaders - refuse to take but which ceteris paribus are almost guaranteed to bring results within 20 years. Look at Ireland, Ethiopia, Vietnam, etc - the success stories are there.
As the DA has often done, they claim credit for the for the Western Cape having the country's lowest unemployment rate, which is beyond their control. "The DA-led Western Cape is on the right track to creating opportunities for economic growth and jobs."
Maimane: "Since 2009 when the DA was elected in the Western Cape, 487 000 net new jobs have been created by the DA-led government. That’s why unemployment is the lowest in the country."
Note the "that is why" logical connector. However, his claim is misleading, and since they ought to know better, a false interpretation of economic data. The Western Cape has historically had a lower than the national unemployment rate, even when it was ANC-run, for various factors. In 2009 it was 19.2%, roughly where it’s at in 2018, compared to national 24.3%.
The province is part of a unitary state and must adhere to national policies and an economic environment that affects work, production and employment. While regions and cities can encourage investment in individual cases, investors look at a package of national and regional conditions before making a long-term commitment.
While the Western Cape has advantages, as a whole South Africa is not an investor-friendly destination, which is one of the reasons why real national growth is negative and in the first quarter 2018 dropped 2%, the largest single drop in recent times indicating a lack of business and investor confidence and consumer belt-tightening.
The 487 000 "new jobs" is a blunt and misleading figure without considering other data like the province's population growth and economic growth rates, number of new job entrants, etc compared to national rates in the same period.
Per Statistic SA's population estimates for 2017, in 2009 WC's population was 5 356 800. In 2017 (mid-year estimates; it will be greater today) it was 6 510 300, an increase of 1 153 500, yes over 1 million people. In this light a net job increase of 487 000 is not remarkable. (Note the DA and everybody else gets information from StatsSA. Readers are encouraged to search its website and verify bald economic assertions.)
A true indicator of economic growth, development and unemployment are provincial unemployment (Q1: 2018: 19.7% and 24.7% real - still high and only slightly lower than national 26.7% and 36.4% real) and GDP growth rates. In Q1: 2018 South Africa's GDP growth rate was -2.2%. SA's GDP growth declined since 2011 (3.3%) to 0.8% (2018), or average 1.6%. WC's tracks national rates and is only slightly better.
So the Western Cape's figures are not extraordinary compared to national rates (Limpopo has lower unemployment); even on their own they're depressing. The DA knows this and without putting it in context are deliberately misleading readers who may not interrogate or understand economic data.
On a related matter, DA shadow higher education minister Belinda Bozzoli recently twice claimed higher education and skills shall lead to job creation and economic growth. In the first statement about the failure of government funding for students she said:
"We will never begin to resolve the unemployment crisis if students are being let down in this manner. Close to 10 million people are without jobs, that number will continue to increase if this funding matter is not resolved."
When in a comment I said she was mistaken and gave her a brief account of the link of skills and education in economic growth, annoyed she responded and said I was "patronising" and "mansplaining", but stuck to her grounds.
In the second statement she said: "The DA believes that investing in higher education will translate to more job opportunities and guaranteed economic growth."
Bozzoli or her speechwriter is conflating separate matters. A complex, multi-faceted host of issues is causing high unemployment like persistent low and negative real growth rate, which in turn is caused by regressive and backward-looking economic policies and anti-competitive industrial and commercial practices.
It's not problems in education although that might play a very small part. In fact, the country doesn't have a skills shortage but an excess of unemployed and underemployed skills including retrenched and early retired skills. I know it's asking a lot of a politician but don't speak about matters you don't understand or obtain information before you do. Your ignorance for a former professor is concerning and stoking unnecessarily fears for political ends.
Bozzoli didn't like my response (above) because she replied, "Thank you for your patronising [comment] and mansplaining the problem to me. You might want to think about whether bringing people through the education system and qualifying them would add to or reduce the unemployment rate".
It's concerning that like Maimane she (they’re by no means the only politicians; the ANC’s and EFF’s are also dreadful) don't understand the macroeconomic environment and conditions for job creation. Both have highly paid advisors and ought to know better, unless there's a deliberate attempt to mislead, as I believe with Maimane's job claim.
The 487 000 "new jobs" is a blunt and misleading figure without considering other data like the province's population growth and economic growth rates, number of new job entrants, etc compared to national rates in the same period.
Per Statistic SA's population estimates for 2017, in 2009 WC's population was 5 356 800. In 2017 (mid-year estimates; it will be greater today) it was 6 510 300, an increase of 1 153 500, yes over 1 million people. In this light a net job increase of 487 000 is not remarkable. (Note the DA and everybody else gets information from StatsSA. Readers are encouraged to search its website and verify bald economic assertions.)
A true indicator of economic growth, development and unemployment are provincial unemployment (Q1: 2018: 19.7% and 24.7% real - still high and only slightly lower than national 26.7% and 36.4% real) and GDP growth rates. In Q1: 2018 South Africa's GDP growth rate was -2.2%. SA's GDP growth declined since 2011 (3.3%) to 0.8% (2018), or average 1.6%. WC's tracks national rates and is only slightly better.
So the Western Cape's figures are not extraordinary compared to national rates (Limpopo has lower unemployment); even on their own they're depressing. The DA knows this and without putting it in context are deliberately misleading readers who may not interrogate or understand economic data.
On a related matter, DA shadow higher education minister Belinda Bozzoli recently twice claimed higher education and skills shall lead to job creation and economic growth. In the first statement about the failure of government funding for students she said:
"We will never begin to resolve the unemployment crisis if students are being let down in this manner. Close to 10 million people are without jobs, that number will continue to increase if this funding matter is not resolved."
When in a comment I said she was mistaken and gave her a brief account of the link of skills and education in economic growth, annoyed she responded and said I was "patronising" and "mansplaining", but stuck to her grounds.
In the second statement she said: "The DA believes that investing in higher education will translate to more job opportunities and guaranteed economic growth."
Bozzoli or her speechwriter is conflating separate matters. A complex, multi-faceted host of issues is causing high unemployment like persistent low and negative real growth rate, which in turn is caused by regressive and backward-looking economic policies and anti-competitive industrial and commercial practices.
It's not problems in education although that might play a very small part. In fact, the country doesn't have a skills shortage but an excess of unemployed and underemployed skills including retrenched and early retired skills. I know it's asking a lot of a politician but don't speak about matters you don't understand or obtain information before you do. Your ignorance for a former professor is concerning and stoking unnecessarily fears for political ends.
Bozzoli didn't like my response (above) because she replied, "Thank you for your patronising [comment] and mansplaining the problem to me. You might want to think about whether bringing people through the education system and qualifying them would add to or reduce the unemployment rate".
It's concerning that like Maimane she (they’re by no means the only politicians; the ANC’s and EFF’s are also dreadful) don't understand the macroeconomic environment and conditions for job creation. Both have highly paid advisors and ought to know better, unless there's a deliberate attempt to mislead, as I believe with Maimane's job claim.
I dealt with the skills, jobs and growth conundrum in this article. Skills alone don't 'translate into jobs and economic growth but entrepreneurship, innovation and investment. Labour (skills) is an input into production like capital; it's merely a resource which without entrepreneurship and the idea or product, will remain redundant. Can there be economic growth without a skilled workforce? No.
In economics skills is a synonym for labour and jobs the productive use of labour.
If a motor vehicle is the economy, the transportation network is policy and economic environment. Getting to the destination is growth and development. The engine is the entrepreneur and innovation, idea and product that drives the vehicle. The fuel is investment capital, and labour and skills the wheels or other important component. The latter don't drive the vehicle, the engine does.
So saying labour creates jobs and growth – or labour creates labour as Bozzoli says – is fallacious, circular reasoning.
South Africa already spends 20% of its budget on education and its return is poor. TVET college students get full bursaries but many do poorly academically. Throwing money at problems, like Bozzoli and government want to do, is a politician's response to everything and easy when it's someone else's money - the taxpayers'.
Of course education is essential for economic growth and development. But a fly in the ointment in is there's almost full graduate employment - last I checked about 5% unemployment - and a huge surplus of labour (36% real unemployment) and real negative growth, which won't change for a long time to come, if ever.
So to disagree with Bozzoli, under present conditions there's nothing "guaranteed" about job creation and economic growth.
I get irritated with "experts", academics, politicians and journalists who confuse and conflate issues. They're supposed to have the facts and are in positions of influence. The lay public take what they say and panic or arrive at the wrong conclusions. One frequent misconception is confusing poverty and inequality as if they mean the same when it's not. The factors causing unemployment is another.
They've highly paid advisors and expertise and years of experience to know education, esp when there's already a surplus of skilled people incl the "elderly unemployed", in their case due to forced retirement and retrenchment, will not ameliorate unemployment and create economic growth. Incidentally, I'm one of the skilled superannuated.
It's not the public's job to advise them. Either they must employ better advisors or research the subject properly. There's no magic bullet for the economy but well-known, difficult structural measures they - the country's leaders - refuse to take but which ceteris paribus are almost guaranteed to bring results within 20 years. Look at Ireland, Ethiopia, Vietnam, etc - the success stories are there.
But in the meantime they must desist with the bromides and alt-facts about job creation and growth.
Comments
Post a Comment