SETP No. 14 The Economic Value of Incremental Employment in the ...

Figure 3-3
Index of employment: Construction and total non-agricultural employment
110
105
100
Index 1990=100
95
90
85
Construction
Total non agricultural
80
75
70
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Source: SA Reserve Bank Quarterly Bulletin
3.8 The loss of jobs in the construction industry stands in contrast to the rest of the
economy. Figure 3.3 illustrates an index of employment of total non-agricultural
employment and employment in construction for the years 1980 to 1997. The
index base year is 1990. In the economy as a whole there have been net job
losses since 1990. The trend in the economy over the past twenty years indicates
a general growth in jobs over the 1980s with a sustained loss in jobs between
1990 and 1997. While this is a bleak picture in itself, the construction industry has
experienced jobs losses far greater than the rest of the economy, on the one
hand, and the job losses have been happening since the early 1980s, on the
other.
Wage trends
Construction wages
3.9 We see above that construction has a falling contribution to GDP and a falling
contribution to total job creation. The changes in real wages reflect this trend
although the differences are not as stark. Figures 3.4 and 3.5 illustrate the racial
differences in wages and the changes in these real wages since 1980 for the
construction and manufacturing industries respectively. (Real wages are
estimated by adjusting nominal wages by the South Africa consumer price
index).
3.10 For whites real wages have been falling in both construction and manufacturing
since the mid-1980s although the fall has been greater in the construction
industry. Real wages for coloureds are higher in manufacturing but lower in
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