For those who are unaware of it South Africa has been in a labour recession for a while now and it seems this will not be improving any time soon.A labour recession,similar to an economic recession, is defined as two consecutive quarters of negative growth in the labour market.
Unemployment is obviously not a good thing and will affect many things in the country negatively.Increased unemployment means less buying power,less taxable income,and economic trouble for entire communities.
The unemployment rate is already very high when compared with the US and UK and the current financial climate where companies are suffering under the threat of possible bankruptcy is only going to increase this problem.Dirk Hermann ,deputy general secretary of the trade union Solidarity,stated that the union was informed of 27 companies from various industries that were going to retrench an expected 22 200 employees in the coming months.
The industry most effected will be the automotive sector,with over 6000 jobs expected to be cut,followed by the mining sector.The figures mentioned above do not include the retail or agricultural industry,contract workers, or the informal sector such as some domestic workers.
Unemployment is expected to rise to 25% in the first quarter of next year.Solidarity is currently formulating an emergency plan that they would like to put forward to President Motlanthe at a crisis summit as soon as possible.
Hopefully some of the reports have been exaggerated, but it doesn’t seem likely.Unemployment in the US and other countries around the world is also on the increase and it seems we are soon to follow.Besides companies retrenching staff there are also those companies simply going bankrupt in which case even more jobs are lost.
Expect employers to be even more careful about hiring the right person for the job as mistakes in this area can cost companies even more money.
