‘The high rate of unemployment remains the Achilles’ heel of the economy – an economy that cannot ease the plight of the working class,’ notes the report.
Against the background of the country’s unemployment rate in the third quarter of last year having risen from 31.9% to 32.1%, unemployment has become the direct source of discontent in the South African society, according to the Police and Prisons Civil Rights Union (Popcru).
Quoting the quarterly Labour Force Survey in its social transformation and socio-economic report, under discussion at the union’s five-day central executive committee (CEC) meeting, converging at the Birchwood Convention Centre in Boksburg, the union said the unemployed number of working-age people soared to 79 million.
This, as 46 000 workers lost their jobs.
Stagnant economy hinders progress
The report said the South African economy has experienced stagnation, which frustrated efforts to effectively deal with three historical inequalities, unemployment and poverty.
It said the most salient feature that could ensure the country’s economy stayed healthy and stable, was in achieving a trading relationship.
“The network of trading relationships in the era of the fourth industrial revolution, remains resilient – able to respond positively to technological advancements.
“Global economies are prone to storms, interspersed with temporary periods of calm, with South Africa no exception,” said the report.
The report has slammed government for “pursuing neo-liberal policies, influencing austerity measures in government departments” – leading to an economy “that cannot ease the plight of the working class”.
While the South African economy grew in the fourth quarter by a marginal 0.1%, taking the annual growth rate for 2023 to 0.6%, with the gross domestic product registering R1.161 billion, Popcru found this not going far enough.
“Notwithstanding this slight positive growth, the high rate of unemployment remains the Achilles’ heel of the economy – an economy that cannot ease the plight of the working class,” noted the report.
Popcru: Poverty rooted in apartheid legacy
Turning to poverty, Popcru said in the South African context, the phenomenon could be attributable to “a plethora of factors that have a deep impact on people’s lives, with one major feature being the legacy of apartheid”.
“For many years, the apartheid system enforced racial segregation and economic inequality – leaving non-white South Africans, especially black Africans, with limited access to resources education and job opportunities.
“Another big cause is unemployment, with many people, especially the youth, struggling to find work – despite being in possession of tertiary qualifications.
“This problem is rooted in structural issues, such as lack of job opportunities, insufficient skills development and a growing population,” the report said.
Union advocates for tax relief on pension withdrawals
Referring to the just energy transition, aimed to address climate change, the union expressed concern about possible retrenchments “due to businesses closing power stations and power stations being decommissioned”.
On government pension reforms, the union advocated for withdrawals by low and middle-income workers – not pushing them into the next tax bracket; first withdrawals by low-income workers to be tax-exempt and withdrawals below R30 000 to be tax-exempt.
The union would also like for low-income workers to be taxed at a lower rate – as opposed to their personal income tax rate and for workers to be allowed access to their preservation pot in the event of losing their jobs.
