Employment likely to be slow - Marcus

Wednesday, July 7, 2010

Pretoria - Better employment prospects are likely to be slow during South Africa's recovery from the recession, Reserve Bank governor Gill Marcus said on Wednesday.

"This is not unusual in the early phases of the cycle but there are other factors that seem to indicate that the pick-up in employment is likely to be slow," she said.

Quarterly Employment Statistics released by Statistics South Africa last month revealed that a further 79 000 jobs were lost in the first quarter of 2010.

"This is not unusual in the early phases of the cycle but there are other factors that seem to indicate that the pick-up in employment is likely to be slow.

"We lost a disproportionately large number of jobs during the crisis compared with other countries but despite this wage settlements remain well above inflation particularly in the public sector," said the governor.

Should this not be matched by improved productivity there are likely to be inflationary consequences.

She said that public protests seen abroad did not reflect demands for higher wages but that they also reflected the loss of jobs.

"South Africa cannot on the one hand put employment creation as its priority and then at the same time demand (and agree to) wage and salary increases that are in some instances double the level of inflation."

She added that in the work environment outrageous increases or bonuses were unacceptable.

"South Africa as a whole needs to have a greater understanding of the global financial crisis and its consequences for us all. This requires a greater interaction and a common purpose determining the appropriate course of action that we as a nation need to take to stave off the worst ravages of the crisis," said Marcus.

Next week, the central bank's Monetary Policy will meet on whether to change interest rates or keep them as is at 6.6 percent.

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