Government wages as a percentage of gross national product (GDP) are already too high, economist Mike Schussler said on Thursday.

"Clearly, more government employment is not the answer to the country's job problem as SA already employs more people in government and public entities than most countries," he said.

Schussler was speaking at the launch of trade union UASA's ninth SA Employment Report in Johannesburg.

He said employment growth had been seen in the government sector as well in the electricity, gas and water sectors.

"Mining, transport and financial services have grown their employment numbers, but retail, the hotel industry, as well as construction and manufacturing have lost people."

Can't support industries that don't make it

Schussler said it was disappointing that the Trade and Industry Department had concentrated on an industrial policy for manufacturing.

"We can't go on trying to support industries that are not making it."

Schussler said government was employing workers at a premium of 40 percent over the private sector.

"Lots of people have been employed and government is paying them a lot of money ? if government wanted to increase employment it would have to slash salaries."

Quite simply, government employees were costing the country "too much."

"SA can't create jobs but it can give big wage increases to government employees and this leads to the problem that a lot more people become economically inactive," Schussler said.

Average Eskom salary was R37 515

In June last year the average salary paid per month to Eskom employees was R37 515 and would now be close to R40 000 per month depending on wage negotiations.

Schussler added that economic growth on its own also did not mean an improvement in employment.

"Lower interest rates, some growth in gross domestic product or a weaker rand don't always create employment."

In the medium-term fixed capital formation might help with economic infrastructure, and building roads and dams was probably SA's best option.

"But in the long-term, more attention has to be given to fixing the education system," Schussler said.

"This may take at least a decade before you see results, but still it has to be done."

"No decent jobs without decent education"

Schussler said that new slogans were needed such as: "no decent jobs without decent education."

Furthermore, employment laws should be changed.

"Fewer laws would mean more hiring while the removal of red tape ? such as freeing up airwaves and adopting an open skies policy ? will make it easier for entrepreneurs to do business and create jobs."

Turning to the Fifa World Cup, Schussler said the tournament had shown that South Africans could stand together as a nation.

"The benefit will be increased tourism, but this means that more airlines must be able to fly into SA."

Schussler said government had to put economic infrastructure before social infrastructure.

"We've spend a lot of money on social infrastructure with the construction of about four million homes ? our house ownership is the highest in the world; now we just need to find income."