Elements of Employment Scenario-Building: do Sources of Job Creation Matter? (Three different versions Oct 06, Nov 06 and Jan 07)

by ALTMAN, M., 2006
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

“This paper was the initial version of the HSRC Employment Scenarios. Altman starts by proposing 4 categories of job creating sectors: those that focus on poverty alleviation (such as special employment projects), the public service, “follower” services (generally low paid non-traded activity such as retail) and “dynamic” goods and services industries that are traded (such as finance, tourism or manufacturing). This offers a set of categories for thinking about the structure of the economy in respect of employment creation. The more dynamic is the sector, the greater the impact on growth, and also the higher are average wages. Altman sketches out four employment scenarios. The first two scenarios assess the consequences of employment growing as it has over the past 5–8 years. The third involves the stimulation of inward-oriented industries, while the fourth creates more employment through trade. In 2006, about 65% of working people earned less than R2,500 a month. Altman considers possible wage distribution outcomes in each scenario. Some insights gained through this analysis include:·no scenario solves the problem of working poverty and a long term commitment to social grants will be required, including for working people.• it is probable that there will be significant reliance on special employment programmes to meet Government’s target to halve unemployment. The extent of reliance depends on whether economic dynamism is stimulated. • The service sector will become a larger share of employment in all scenarios “