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High-skilled jobs the biggest employer

Johannesburg - Employment remained unchanged last month‚ rising to an annualised 0.1%‚ the latest human capital management company Adcorp’s employment index showed on Monday.

The index is regarded as the most representative monthly barometer of employment trends in SA‚ although its figures do not usually tally with those from SA’s official statistics agency‚ Statistics SA.

Many academics have also disputed Adcorp’s employment numbers.

The static picture of jobs was attributed to an increase in informal jobs (11 207) coupled with a decrease in formal sector jobs (9 161)‚ Adcorp reported.

Losses were located largely in the mining and construction sectors‚ while improvements were seen mostly in transport and manufacturing.

The index also revealed that high-skilled jobs remained the overwhelming source of employment creation‚ with 12 000 new jobs seen in the management and professional categories combined.

Government created 8 000 new positions according to the employment index.

In an analysis of the country’s state of employment for last month‚ Adcorp said it found that the wage share‚ which is labour’s participation in national income‚ fell to the lowest level in 50 years.

Adcorp labour economist‚ Loane Sharp‚ said the ‘wage share’‚ which is the proportion of national income that is attributable to workers‚ was an indicator of the distribution of income between capital and labour.

“Wages are the remuneration received by labour; profits and other owner income is the remuneration received by capital. The implication of the dropped wage share was that South Africa’s profit share rose to a 50-year high‚” he said.

Reasons for this trend‚ Sharp said‚ could be attributed to South African companies‚ as reflected by profits‚ being in exceptionally good shape.

“A recent study showed that the real risk-adjusted return on capital of South African listed businesses is currently 10% - the highest in the world‚” he said.

He added that in terms of corporate transparency‚ board effectiveness and financial management the country ranked first in the world with the private sector‚ measured in terms of criteria like business sophistication‚ ranking 34th internationally.

“Of course‚ another reason for wages’ declining share of national income is declining labour productivity. Since records were first started in 1967‚ South Africa’s labour productivity had fallen to a 46-year low with most of the decline occurring since 1995‚” Sharp noted.

He said the Labour Relations Act of 1995 was a radical change in labour laws and‚ from the business perspective‚ presented enormous challenges in terms of dismissal protections and wage escalations.

“It doesn’t seem possible that the wage share could fall substantially further. The decline from 60% of national income in the early 1980s to 50% in the early 2010s is already a significant drop‚” he said.  

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