The role of an economy is to create wealth, not jobs, but you’d have been hard-pressed to hold onto that in the face of the outrage outgoing Capitec CEO Gerrie Fourie stirred up when he told a lunchtime group of journalists last Monday he thought the grey economy was so large that if adequately measured, actual unemployment could be about 10% and not close to 33%.
Both the Left and Right of our political spectrum have a vested interest in the total reported number of unemployed being high. For the Left it’s an opportunity to bemoan the “capture” of the ANC by white capital, austerity and inflation targeting and to once more punt fiscal stimulus and wealth taxes.
On the Right it’s an opening for renewed attacks on ANC competence and corruption, calls for privatisation of nonfunctional public services and greater policy liberalisation.
The attacks on Fourie and on Business Day, which reported the remarks the next day, were startling. Andrew Kerr at the University of Cape Town School of Business suggested Fourie should “stay in his lane” and that his suggestion that Stats SA doesn’t count self-employed people in its quarterly labour force survey (QLFS) meant his “entire premise” was wrong.
Neil Coleman, an economist, tweeted that “this shoddy piece of journalism” was “outrageous” and, indeed, while Business Day was right to spot the lunchtime news value, it should have sought comment on Fourie’s numbers for the story.
Former statistician-general Pali Lehohla charged that “when a random businessman comes and dabbles in systems that he doesn’t understand, it’s tragic, especially a successful businessman like himself who actually feeds off the money of blacks who suffer high unemployment of 32%”.
The writer Duma Gqubule called on Fourie to withdraw his statement.
Cancel Fourie then? How lovely. Stats SA’s QLFS is not to be questioned even though its head was in parliament recently complaining he is wildly underfunded and has a 22% vacancy rate. There’s no doubt Stats SA is a vital cog in our democracy but its 2022 census was widely criticised and the agency has had to drop some surveys and curtail others.
And while the QLFS consults 30,000 households and does indeed include self-employment and the informal economy, it doesn’t mean it is a perfect measure or that Fourie was wrong to question the now record 32.9% formal unemployment rate.
In fact, he has begun a vital debate. Is there a category of income so small or irregular that it doesn’t count as the proceeds of work? You can be sure Capitec watches every small cent move into its accounts.
Even the most unskilled young men have muscle they can and do hire out. The money is disgraceful but it’s not nothing and how sure can we be it’s being measured?
About 30 years ago I was the Madrid bureau chief of the Financial Times. Spain then had unemployment of about 25% and everyone knew that was a joke. It was also the fastest-growing economy in Europe. But it had a fabulously rebellious population, just as we do here. It took years for protests against paying for urban garbage collection to subside. When the country was required by the EU to conduct roadworthy car tests, workshops instantly appeared where you could rent brake pads and other parts you needed for the test and return them afterwards.
The fact is that somehow people survive, often miraculously, even here. Practically every RDP house has a shack attached to it. And some shacks have shacks. Even the most unskilled young men have muscle they can and do hire out. The money is disgraceful but it’s not nothing and how sure can we be it’s being measured?
The corollary of our unemployment possibly being lower than the official figure is also that our GDP may be higher than what we record. People may not have jobs but that doesn’t mean they have no income beyond welfare.
Spend any time in rural South African towns and villages and they throng with people buying and selling. There’s no revolution in the rural air here. There’s business.
Sadly our government is overwhelmed by the complexity of what confronts it. It reduces the jobs it cares about to the ones with centrally bargained and unionised pay deals. It will throw billions of rands to keep a moribund steelmaker and its 3,000 staff operating when the unloved and non-unionised businesses who use steel rather than make steel employ tens of thousands more people.
And about it masses an army of “progressive” intellects determined to keep it on the ideological straight and narrow. The coming national dialogue, whatever else it turns out to be, will be their stage. But you ignore the gut of Gerrie Fourie at your peril. He has 24-million customers.
He knows a lot more about them than Stats SA does and he sees a very different AI-driven and fragmented future economy than do the titans of the Left. His 10% may be excessive but he makes a powerful point and we should not shut him down.
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