Several reasons why the Western Cape outperforms other provinces in job creation
Most likely there are several reasons why the Western Cape outperforms other provinces in creating jobs; governance is one of them.
Anybody studying the latest jobs data would struggle to reach an alternative conclusion.
Since 2015 the Western Cape has added nearly 400 000 jobs to its regional economy, while Gauteng has shed 55 000 jobs. The figures are all the more remarkable when you consider that the population of both provinces continues to grow at about 1,9% a year, with Gauteng’s population roughly double that of the Western Cape.
Gauteng, ostensibly the country’s economic heartland, has fared particularly badly compared with other provinces, the data shows, but the Western Cape outperforms other provinces as well.
No doubt the Western Cape enjoys an employment advantage over some provinces battling to overcome a legacy of under-development. But the same cannot be said in relation to Gauteng. In effect, Gauteng’s under performance has seen the percentage of employed working age adults plummet, while the Western Cape’s unemployment rate is a full ten percent lower than the national average.
Ann Bernstein, director of the Centre for Development & Enterprise, describes the jobs data as “truly astounding”. She also believes governance as the key unseen job creation determinant: “What is to be learnt from this, besides the fundamental issue that the quality of governance really matters for growth and for job creation?” Bernstein said in an opinion piece published earlier this month.
Perhaps most unsettling is the job trend among young people. Since 2008 the country saw a 2,6-million increase in the 15—34 age group, but the number employed in that group fell by 600 000 during the same period.
Bernstein believes the relative success of the Western Cape jobs data is inseparable from the relative success of the Western Cape in other arenas, such as health, education, and clean administration. Business success is symptomatic, in other words, of a successful enabling environment.
It is tempting to consider how much further ahead Western Cape employment may be if the Province was in charge of other key services, such as transport and energy provision.
The Cape Chamber believes it would be a mistake to use other provinces as a benchmark for economic success; much work remains to be done if the Western Cape wishes to make a meaningful impact on the current jobs shortfall.
However, if Bernstein is correct – and we believe she is – that governance is fundamental to job creation, one would hope those contesting next month’s election have reached the same conclusion. More importantly, one would hope those casting their vote will take a careful look at what parties intend to do to address the unemployment crisis in the critical next few years.
John Lawson
CEO of the Cape Chamber of Commerce and Industry