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Brace for a bloodbath in job losses

The drop in employment with the economy shedding 15 000 jobs in the private sector was a harbinger of things to come and consumers should expect further shocks in the months to come.
Neil Roets, CEO of Debt Rescue, said all indications were that consumers were going to face a dark future with more jobs being lost and wages dropping in real terms.
Award-winning economist Dawie Roodt said the 44 000 jobs reported by government was nothing more than an election ploy and that many of these jobs would disappear once the election was over.
“The jobs gain in government is at the same time a sign that govern-ment has no plans to cut down on its bloated workforce as demanded by the ratings agencies – at least for the time being.”
He said there was no question that the bloodbath in the SA economy would continue, with rising prices, increasing job losses and consumers falling ever deeper into debt.
“The one fallacy we must address head-on is the government’s constant refrain that jobs need to be created.
Jobs can only be created by a growing economy and not by benevolent business people simply employing more workers because this is the wish of the government.
Given the paltry state of the South African economy this is not going to happen in the foreseeable future.”
Statistician-general Pali Lehohla said the jobs lost in the formal sector of employment meant that its total workforce had shrunk to 9.2 million people.
Lehohla said this was the sixth consecutive quarter mining had shed jobs following the decline of 17 000 jobs in the fourth quarter.
Since June 2013 to March this year mining had lost a total of 60 000 jobs. Roets said he expected the economy to shrink further and would officially be in a recession within the next few months.
“If we take into account that more than 50% of consumers are three months or more behind in their debt repayments and the fact that most of them have to shell out 75% of their pay cheques at the end of the month to service debt we begin to see just how bad the situation has become.”
The SA Reserve Bank had revised growth projections from 0.9% to 0.6% this year. The World Bank and the International Monetary Fund have also projected less than 1% growth.
The release of the employment figures by Statistics SA comes a month after ratings agencies gave SA a reprieve from a downgrade to junk status.
“I am still of the view that we will likely be downgraded to junk status … towards the end of the year,” Roets said.
His company was seeing a 40% increase in its growth largely because of the growing number of deeply indebted consumers who were seeking relief by going under debt review.
“Debt counselling remains the best way for consumers to manage their debt load by negotiating with creditors and pay-ing off their debt in smaller instalments over a longer period of time.
“None of their assets may be attached by debt collectors while they are under debt review,” Roets said.

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