Could Namibia Experience a Shortage of Workers?

The news article in Yahoo News today about a job creation effect in Ohio by the US Auto Industries shows that they are using a factor of 15.0 to measure their direct and indirect job creation effects, while I use a more modest, which is 5.0, as an average for the Namibia market.

That means, if 54,200 direct jobs in Ohio were created as a result of the auto manufacturers in Ohio, then as the articles shows, the indirect jobs are 850,000; meaning that per each 1 job created, 15 indirect job opportunities are created.

For me, I use a factor or 5, meaning that per each 1 direct job created, then 5 more indirect jobs are created. This is more modest and conservative in lieu of the Namibian mentality (always questioning if this or that is possible), but I don’t deem my factor to be the preferred perfect one.

But if I use a factor of 15, then Tses Glass as it’s estimated to create 47,900 direct jobs in Tses alone, then 718,500 indirect job opportunities will be created throughout Namibia as a result of the Tses Glass factory in Tses, and Otavi Steel as it’s estimated to employ 25,000 direct jobs in Otavi, then the indirect job opportunities in Namibia to be created from the Otavi Steel mill is 375,000.

For a total of about 1.1 million new direct and indirect job opportunities throughout Namibia to be created as a result of just two industrial projects; Otavi Steel and Tses Glass.

However, the Namibia’s workforce is only about 729,000; and if 15 is the factor to be used for the direct and indirect jobs’ creation effects, then Namibia is expected to experience a huge shortage of workforce when these two projects are commissioned at full capacity.

This shortage of the workforce could have a possible “cause-and-effect” trigger;- an exponential high rise in salary and wages compensation throughout Namibia, but with a sudden high inflationary pressure in Namibia.

Yes, Rome was not built overnight, so don’t expect these two industrial projects to be realized overnight, good things take time to develop and implement; as there are several factors to be done; planning, technical issues, politics, etc., before bricks are laid down and the ignition button can be pressed for the production starting of the factories.

We’re working!

Advertisements

3 thoughts on “Could Namibia Experience a Shortage of Workers?

  1. Dear Simon
    I believe that you assertion that Tses Glass or Otavi Steel could potentially have an employment multiplier effect of 15 may well be over optimistic (even given for believing any statistics released by the Obama White House during an election year).
    Employment multipliers are industry specific. The auto industry has a very high multiplier as much of the fabrication of parts is outsourced. Auto factories buy in most parts and bolt them together – think of all the suppliers of windscreens, radios, alternators, tyres, seats, bolts, widgets, etc. All of which are generally delivered to the factory by outside suppliers – creating a relatively high employment multiplier.
    Although it only relates to the USA the Bureau of Economic Analysis produces estimates of employment multipliers for various industries. These include a factor of 0.8 for retail (for each new retail job another 0.8 jobs are created directly or indirectly) to 6.9 for oil and gas extraction (an industry where few people are required directly to pump oil and gas once an installation is set up but a large number of people are required to explore for, develop oil and gas facilities and refine the product).
    According to the Bureau of Economic Analysis primary metal manufacturing industries (eg Otavi Steel) have a multiplier of 3.7 and the manufacture of glass products (Tses Glass) has a multiplier of 2.4. The fabrication of metal products has a multiplier of 2.2. So if Otavi Steel is both a primary manufacture and fabricator of metals products then multipler could be up to 5.9.
    As I said these multipliers are from the USA, and Namibia has very different conditions, but I do believe that equating directly a high multiplier industry such as the auto industry (using figures supplied by the Obama campaign in an election year!) to relatively low multiplier industries such as metal and glass industries is over optimistic and somewhat simplistic. Given the difference between USA and Namibia any statistic must be used with caution (‘lies, damn lies and statistics’) and the actual USA employment multiplier may not be strictly relevant to Namibia. However, as a generalisation, the ratio between the USA employment multipliers often holds relatively true in any enviornment (eg the oil and gas industry will create approximately 3 times the number of indirect jobs for each direct job created compaired to the glass manufacturing industry (6.9:2.4)).

  2. Hello Spike,

    Thank you very much for your insight view. Yes, you are perfectly correct. My job multiplier effect is 5.0 for most industries, which in this case, is an average. Please follow my previous blog posts on here to view my estimated job creation effects using 5.0 as the job multiplier.

  3. When a business moves into town and creates new jobs or the government release funding to build a new highway, it’s not just those who end up working on the new project that benefit. The additional activity has a trickle-down effect on the whole of the local economy.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s