brokers ban will hit jobs, say experts

ECONOMISTS argued yesterday that banning labour brokers would only increase the current rate of job losses and hamper job creation.

The comments came after the release of Stats SA's third quarter Labour Force Survey, which showed a decrease of 418000 jobs in the quarter.

According to the statistics provider employment decreased by 3,6percent between the second and third quarters, with most of the losses recorded in the formal sector of the economy.

The official jobless rate increased to 24,5percent of the labour force in the third quarter, from 23,6percent in the second quarter.

Investment Solutions economist Chris Hart said the total banning of labour brokers would "undoubtedly add to the barriers of entry for the unemployed".

"Unemployed people without personal resources to look for a job will find it difficult to enter the job market," Hart said.

The manufacturing sector, one of the hardest hit by the global and domestic downturn, shed 150000 jobs, while the wholesale and retail trade lost 110000 jobs.

He said expectations of recovery had been "set back further" and added that "banning labour brokers will only make the problem bigger and bigger".

Efficient Group economist Dawie Roodt said the figures were "worse" than he had expected and cautioned that more jobs would be lost in the fourth quarter.

He said an improvement would only be seen in the second quarter of next year.

According to Stats SA the rise in unemployment was brought on by a fall in employment, with 510000 people joining the "discouraged jobs seekers" category of the unemployed.

National Union of Metalworkers of SA president Cedric Gina said the notion that banning labour brokers would cripple job creation efforts "was not true".

"The labour broking system doesn't create jobs but only poses as a 'middle man'," he said.