Tydskrif vir Geesteswetenskappe
On-line version ISSN 2224-7912
Print version ISSN 0041-4751
KLEYNHANS, E. The effect of declining goldmine production levels on employment in the Dr. Kenneth Kaunda District Municipality. Tydskr. geesteswet. [online]. 2012, vol.52, n.4, pp.678-704. ISSN 2224-7912.
In this study the potential of the various economic sectors of the Dr. Kenneth Kaunda District Municipality (DKKDM) to create future employment, is investigated. The DKKDM encompasses a total of 15 712 km2, located in the North West province of South Africa. It comprised the local municipalities of Matlosana (Klerksdorp), Potchefstroom (Tlokwe), Maquassi Hills (Wolmaransstad, Leeudoringstad, Makwassie and Witpoort) and Ventersdorp, including Hartbeesfontein, Stilfontein and Orkney. The economies of these local municipalities are mainly dependent on gold mining. However, the future prospects of South African goldmines are declining since gold deposits are becoming depleted. A large section of the population dependent on the mining industry will face unemployment in the near future, leading to adversity and concomitant development needs if this problem is not addressed in time. The objective of this study is to identify industries with the potential to create future jobs. The production of gold has now been declining for a long time and the trend is bound to persist. During the decade from 1996 to 2006 gold production in South Africa declined, for example, by 60.1 per cent, and with that also South Africa's share in total production of gold, which declined from 79 per cent in 1970 to 19.2 per cent in 2002 - a figure which is even less than it was during the early years of local production in 1894. Shift-share analysis was utilised as research methodology; a technique often applied in studies of economic geography. It provides insight into the shifts of employment and economic production in various sectors over space and time. It also provides information on employment growth of various industries and subsectors in a region, and also divides employment changes into specific elements. It indicates the effect that national trends have on the creation of jobs in a regional, as well as the effects that a region's unique industrial mix and the economic competitiveness of its various industries have on the creation of employment. It does not require much data, which is often an empirical constraint, it can quickly be applied to new data, it is analytically clear, utilises plain logic and is easy for policymakers to comprehend, apply and utilise. Between 1996 and 2010 the DKKDM region lost many job opportunities. Employment figures of goldmines declined by an annual average of 4.4 per cent during the first decade of the third millennium. Between 1999 and 2006 goldmines lost in access of 87 000 jobs. It was only the region's unique combination of industries that led to the creation of new jobs and limited further job losses - especially in the services sectors. The national influence on the DKKDM was weak, but most job opportunities were lost due to the particular regions' inability to be economically competitive. The results indicate that the manufacturing subsectors with the highest employment creation potential in the DKKDM region are transport equipment, wood and paper products, metal products and furniture. The non-metallic products sector also shows potential. The study also compared the potential ability of sectors to create jobs, in relation to the size of the particular industries, but that did not significantly change the results. A similar study was conducted and published using the gross value-added or gross regional products of the various sectors in the SDM region and similar results were obtained. The service sectors outperform manufacturing, agriculture and mining by far. The service sectors are extensive and are growing fast. Their performance did not decline during the two economic crises that the world faced during 1998 and 2008. In the service sectors of the DKKDK most jobs are created due to the national share and industrial mix effects, but the region's sectors are not competitive. Among the service sectors the major job creators are property, construction, motor vehicle and fuel sales and maintenance, other businesses and other services, closely followed by wholesale, retail and repair services. These sectors merit priority treatment in future development programmes for this region.
Keywords : Manufacturing; employment; job creation; competitiveness; micro-economics; manufacturing industry; mining; firm-level; economic geography; shift-share analysis; industrial economics; industrial development; town and regional planning; spatial economics.