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The South African Labour Market in the Global Financial Crisis: Recovering Lost Gains 34 2009 Transformation Audit 2009 Transformation Audit Recession and Recovery Recession and Recovery offers an assessment of the concrete the broader state of South Africa’s economic transformation cession and impact that negative growth had in 2009 on the longer- in one of the most challenging years since democratisation. term prospects for the creation of an equitable and just At the same time, this publication seeks to look beyond the Audit 2009 Transformation economic dispensation in South Africa. Successive editions major setbacks of the past years and to ask pertinent questions of this publication have shown that the quest for economic about the prospects for recovery and the challenges that the covery transformation is a challenging one under the best of country will have to prepare itself for in this regard. Re circumstances; the implications of a recession undoubtedly compound the magnitude of the task. Will South Africa sustain As in previous years, the Audit’s central objective remains to • Hard times for black business its transformational momentum in the economy in a context provide an uncompromising, authoritative annual analysis by of shrinking government revenues, growing material insecurity the country’s leading analysts and emerging thinkers of the • Social class and unequal outcomes and a substantial decline in employment levels? How will state of socio-economic transformation. As such, the insights in SA schools the new Zuma administration navigate its way through these contained in Recession and Recovery once again provide fresh troubled waters? perspectives on the publication’s four areas of emphasis: the • Exclusion in the labour market macro-economy, the labour market, skills and education, and Although it is impossible to document in this volume the full poverty and inequality. Together, the various contributions • Searching for an anti-poverty impact of South Africa’s first economic contraction in 17 provide groundwork to inform the deeper debates that are Recession and Recovery strategy years, the selection of articles has been informed by a desire required to map the road to greater prosperity for all South to single out those issues that could provide key pointers to Africans. The audit is a revolutionary idea, because it is an audit of national performance, not a performance audit of government, or of one or other organisation, but rather it questions how we, the South African society, are doing. – Mamphela Ramphele ISBN 978-1-920219-17-8 9 781920 219178 AN ANNUAL PUBLICATION OF THE INSTITUTE FOR JUSTICE AND RECONCILIATION IJR Transformation Audit09_Cover PRINT.indd 1 2009/12/16 08:13:02 AM Recession and Recovery Edited by Jan Hofmeyr Institute for Justice and Reconciliation www.ijr.org.za 2009 Transformation Audit www.transformationaudit.org.za Published by the Institute for Justice and Reconciliation Wynberg Mews, 10 Brodie Road, Wynberg 7800, Cape Town, South Africa www.ijr.org.za Text © Institute for Justice and Reconciliation All Images © Picturenet except p. viii © Jan Hofmeyr All rights reserved ISBN: 978-1-920219-17-8 Copy-edited by Laurie Rose-Innes Scorecard calculations by Servaas van der Berg and Ingrid Woolard Designed and produced by COMPRESS.dsl www.compressdsl.com Orders to be placed with either Blue Weaver Marketing and Distribution Tel: +27 (21) 701 4477 Fax:+27 (21) 701 7302 E-mail: [email protected] or the IJR Tel: +27 (21) 763 7137 E-mail: [email protected] contents List of tables and fi gures v Contributors vi Acronyms and abbreviations vii Preface ix Fanie du Toit Introduction xi Jan Hofmeyr CHAPTER 1 Governance and the economy 01 Scorecard Economic performance 03 Analysis The impact of the global recession on the South African economy and the government’s response 04 Azar Jammine Analysis BEE is dead! Long live BEE! 14 Lumkile Mondi Review Refl ections on building a sustainable social pact: Business, labour and the state under Jacob Zuma 22 Adam Habib CHAPTER 2 The labour market 31 Scorecard Labour market performance 33 Review The South African labour market in the global fi nancial crisis: Recovering lost gains 34 Dieter von Fintel and Rulof Burger Analysis Draft Expanded Public Works Programme: A major role in reducing unemployment and poverty? 43 Anna McCord and Charles Meth Review Political infl uence without organisational power: COSATU’S contested future 53 Sakhela Buhlungu 2009 Transformation Audit CONTENTS iii CHAPTER 3 Education and skills 63 Scorecard Education and skills development 65 Research Socio-economic status and educational achievement: Does education provide a stepping stone out of poverty in South Africa? 66 Stephen Taylor and Derek Yu Briefi ng The National Benchmark Tests Project: Addressing student educational needs in the tertiary education system 76 Nan Yeld Review From JIPSA to HRD-SA: Continuity and disjuncture in the development of a national human resource strategy 84 Renee Grawitzky CHAPTER 4 Poverty and inequality 93 Scorecard: Income poverty and inequality 95 Scorecard: Access poverty 96 Research The persistence of high income inequality in South Africa: Some recent evidence 98 Ingrid Woolard, Murray Leibbrandt and Hayley McEwen Review Poverty in South Africa: Government attempts to include the excluded in designing policies and programmes aimed at reducing poverty 108 Vusi Gumede Analysis Rural livelihoods and market integration: Agrarian policy in South Africa 116 Andries du Toit References 126 iv CONTENTS RECESSION AND RECOVERY LIST OF TABLES AND FIGURES TABLES Table 1.1.1: Market exchange rates, percentage change against US dollar 6 Table 2.3.1: COSATU membership, 1991–2006 (rounded to thousands) 59 Table 4.1.1: Percentage of population classified as poor at two poverty lines 98 Table 4.1.2: Poverty headcount index at lower poverty line 99 Table 4.1.3: Gini coefficients for per capita income by race and rural/urban 99 Table 4.1.4: Income and expenditure shares and means by race, 2008 100 Table 4.1.5: Income decile composition of each race, 2008 101 Table 4.1.6: Theil decomposition of income into between-race and within-race components 101 Table 4.1.7: Inequality decomposition by income source, 1993 104 Table 4.1.8: Inequality decomposition by income source, 2000 104 Table 4.1.9: Inequality decomposition by income source, 2008 104 Table 4.2.1: Recent measures of poverty in South Africa 110 FIGURES Figure 1.1.1: GDP growth over time 7 Figure 1.1.2: Gross fixed investment as a percentage of GDP versus gross savings as a percentage of GDP 8 Figure 1.1.3: Public debt as a percentage of GDP 9 Figure 1.2.1: Value of BEE transactions over time (R billion) 16 Figure 2.1.1: Labour market status (official definition), 1999–2009 35 Figure 2.1.2: Job destruction, overall and by skills level 37 Figure 2.1.3: The skills composition of the employed, 1997–2009 37 Figure 2.1.4: Job creation by occupational skill level and selected industries 38 Figure 2.1.5: Actual and projected GDP growth, 1993–2014 40 Figure 2.1.6: Actual and projected total employment, 1995–2014 40 Figure 3.1.1: Mean reading scores in PIRLS, 2006 68 Figure 3.1.2: 5th percentile, 50th percentile (median) and 95th percentile of performance 68 Figure 3.1.3: Kernel density curves of South Africa’s reading achievement by ‘school sub-system’ 69 Figure 3.1.4: Socio-economic gradients in international comparison 70 Figure 3.1.5: Socio-economic gradients by school ‘sub-system’ in South Africa 71 Figure 3.1.6: Lowess regression curves for each school ‘sub-system’ in South Africa 71 Figure 3.1.7: Proportion of variation due to differences between schools for PIRLS participants (Rho) 73 Figure 3.1.8: Direct and indirect effects of socio-economic status on educational achievement 73 Figure 3.1.9: Schematic diagram of the social mobility process 74 Figure 3.1.10: Proportion scoring above national average by socio-economic status quintile 74 Figure 3.1.11: Proportion scoring above national average by school mean socio-economic status quintile 75 Figure 3.2.1: NBTP performance benchmark levels 77 Figure 3.2.2: February 2009 pilot results, academic literacy 78 Figure 3.2.3: February 2009 pilot results, quantitative literacy 79 Figure 3.2.4: February 2009 pilot results, mathematics 81 Figure 3.2.5: Faculty-specific February 2009 pilot results, mathematics 81 Figure 3.3.1: The HRD-SA structure 87 Figure 3.3.2: The JIPSA structure 89 Figure 4.1.1: Income shares by decile, 1993, 2000 and 2008 99 Figure 4.1.2: Income Lorenz curves by race 101 Figure 4.1.3: Income components by decile, 1993 102 Figure 4.1.4: Income components by decile, 2000 102 Figure 4.1.5: Income components by decile, 2008 103 Figure 4.1.6: Labour force participation rates by decile, 1993, 2000 and 2008 105 Figure 4.1.7: Unemployment rates by decile, 1993, 2000 and 2008 105 Figure 4.1.8: Labour absorption rates by decile, 1993, 2000 and 2008 105 2009 Transformation Audit LIST OF TABLES AND FIGURES v CONTRIBUTORS Sakhela Buhlungu is a Professor in Sociology at the Department of Sociology at the University of Johannesburg. Rulof Burger is a Senior Lecturer in Economics at Stellenbosch University. He is currently completing his doctoral studies on recent South African labour market trends at Oriel College, Oxford University. Andries du Toit is Acting Director of the Institute for Poverty, Land and Agrarian Studies at the University of the Western Cape. Renee Grawitzky is an independent researcher and former financial journalist. Vusi Gumede is a 2009 Yale World Fellow at Yale University and a former policy analyst in the Presidency. Adam Habib is Deputy Vice-Chancellor: Research, Innovation and Advancement at the University of Johannesburg.
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