The Adcorp Employment Index fell for the fourth consecutive month, the employment rate declining by 2.1% annually in August 2011. That translates to over 49000 jobs being lost in the month, labour analyst Loane Sharp saying the only job creation is currently government which is now becoming a problem for South Africa.
"Government jobs are not real jobs - they're funded by the taxpayer and that means diverting resources from the private sector or otherwise from other meaningful items of expenditure," he told Summit TV in an interview on Monday night.
"We should treat government job creation as a temporary stop gap measure at best. We have to look at what the root causes are of unemployment because there is no way government can mop up the 8.5 million people that are out of work in South Africa," said Mr Sharp.
In the Summit TV interview Mr Sharp said the New Growth Path is a fantasy document.
"The idea that jobs can be created, in fact even that the 'green sector' can be created in any significant scale - is just a fantasy."
Mr Sharp said the New Growth Path showed there is paralysis within government around job creation, bringing government head-to-head with the trade unions that want to use their partnership with government to secure greater benefits for existing workers.
"The unions don't necessarily want unemployed people to join the workforce because that would depress wages," said Mr Sharp.
He said the New Growth Path was wishful thinking, rather than a proper attempt at addressing the jobs crisis with all sectors outside of government contracting including the mining, manufacturing and construction sectors.
"Contraction in the mining sector is probably the most surprising, because we are seeing record commodity prices."
Mr Sharp said companies were shedding workers because since the end of the recession even though the economy had turned around it was still on shaky ground so employment creation was just as low as it was during the peak of the global crisis.
"All sectors are being hit, but if anything the consumer sectors like retail, the wholesale trade and financial services sector have been less hard hit," said Mr Sharp.
Instead of business creating jobs, Mr Sharp said government was creating large numbers of administrative posts and bureaucratic positions that was having the unintended consequence of actually slowing service delivery.
"It's actually bureaucracy creation," said Mr Sharp, "a lot of jobs within government having been unionised is creating extensive strike seasons."
Mr Sharp pointed out that four years ago South Africa had three or four months of "predictable" strikes per year, but that was now eight to 10 months a year with half of all strikers in the government sector.
The effect of the recession had led companies to reduce full-time positions, and even temporary positions were being affected.
"Temp utilisation by companies has fallen way back in the past four months to about 75% suggesting that there is capacity businesses can use before they will start to create jobs. This presents a bleak picture indeed where we think the economy will lose about 418000 jobs between now and the end of 2012."
Mr Sharp said South Africa was now ranked fifth worst in the world in terms of our labour market efficiency, as evaluated by the World Economic Forum in Davos.