Unemployment becoming a national disaster

Nearly half of SA’s working age population is unemployed, probably hungry and likely angry.
The figures lend credibility to calls to do away with whatever stands in the way of creating jobs. Image: Naashon Zalk/Bloomberg

The grim statistics of unemployment in SA are not a secret, nor is the equally grim fact that the figures keep getting worse year after year.

Statistics South Africa’s latest Quarterly Labour Force Survey (QLFS) reiterates this reality with figures showing that there are more than 7.9 million unemployed persons in SA, despite their best efforts to find employment.

Read:

Stats SA says the unemployment rate, according to the narrow definition of unemployment, increased to 35.3% at the end of 2021. Stats SA notes that this is a new record since it started doing the survey in 2008 – a sentiment it also expressed at the time of the previous release of the survey for the quarter to September 2021.

A lot of people have given up looking for non-existent jobs, increasing the number of unemployed persons – who would actually like to work – to 10.7 million.

The broader unemployment rate, which includes discouraged work seekers, has increased to 46.2% of potential workers.

It gets even worse. Stats SA notes in its report of the survey conducted during the last quarter of 2021 that a lot of young people are not only discouraged with the labour market, they have even given up on learning the necessary skills to find jobs.

Read: Youth unemployment: Two knock-on effects to expect

“Some young people have been discouraged with the labour market and they are also not building on their skills base through education and training – they are not in employment, education or training.

“There were about 10.2 million young people aged 15 to 24 years in quarter four of 2021, of which 32.8% were not in employment, education or training,” according to the report.

That adds another three million odd to the unemployment numbers.

Even these figures do not tell the full story.

One needs to dig into the raw numbers and look at the statistics going back years to fully comprehend the seriousness of the problem.

This is something the Stats SA report fails to do with its focus on quarter-to-quarter statistics and percentage changes.

Raw data

The data supplied as additional information to the report shows that the working age population in SA is growing rapidly.

Defined as persons between the age of 15 and 65, the working age population has increased from 31.5 million in 2008 (first quarter) to 39.9 million at the end of 2021.

In short, there are 8.5 million more potential workers in SA than in 2008.

A graph of the increase in the working age population shows uninterrupted, steady growth.

Increase in working age population (thousands)

Source: Based on Stats SA data

Stats SA puts the labour force at just below 22.5 million at the end of 2021, after accounting for people who are not available for employments, such as scholars, full-time students and people who choose not to work. The latter includes stay-at-home moms and dads with rich spouses and people who opted for early retirement.

In 2008, the total labour force amounted to 18.8 million. Thus, the figures show an increase of 8.5 million in the working age population, but a lower increase in the size of the labour force of 3.7 million.

The bulk of the difference can be attributed to younger people staying in school and attending universities and tertiary education institutions. Actually, this corrects the rather aged definition of a working age that starts at 15 or 16 years of age.

Increase in labour force (thousands)

Source: Based on Stats SA data

Employment

Employment had been increasing since 2008, but not fast enough to keep pace with a growing population and one that is skewed towards younger people growing up and reaching working age. Then Covid-19 hit.

The initial QLFS (in 2008) reported 14.4 million people in employment that year, with later surveys reporting a steady rise to a peak of 16.4 million in the December 2019 quarter. That’s two million new jobs, and food for a lot of families.

While the growth in employment was too slow then – over the same period the working age population increased by 6.6 million and the labour force by 4.3 million – it crashed when Covid-19 hit.

Within months, SA lost 2.5 million jobs.

The QLFS data shows that the number of employed persons in SA fell to the same level as in 2008.

Number of employed persons (thousands)

Source: Based on Stats SA data

Unemployment rate

No increase in the number of available jobs since 2008, and the steady increase in the working age population and the number of people seeking employment, result in an unbelievable and very worrisome unemployment rate.

Unemployment rate (narrow definition)

Source: Based on Stats SA data

The current unemployment rate of 35.3% can be interpreted in different ways. One is to point out that 35 out of every 100 people eager to work cannot find work. Another is to say that one out of every three adults in SA is staring at a bare food cupboard and doesn’t know what to do about it.

The expanded definition of unemployment indicates that half the people who actually want to work cannot find jobs.

Read: The South African disaster: No businesses for the unemployed

Meanwhile, Stats SA’s recent consumer price index report shows a steep increase in prices of basic foodstuffs.

The latest QLFS contains lots of statistics: by province, age, race, gender, industry, lengths of unemployment and level of education. It is probably all very useful, but the problem of unemployment is getting so big that these statistics should be largely irrelevant.

At this stage, a new job is a new job – lending credibility to calls to deregulate labour markets and doing away with whatever stands in the way of creating jobs.

AUTHOR PROFILE

COMMENTS   14

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

The destruction of the country at the hands of the ANC is virtually complete.
Infrastructure collapse from roads to offices to water and sanitation – too many to list.
SOE’s are virtually all bankrupt and totally dysfunctional.
The vast majority of Municipalities staffed by inept cadres are bankrupt and broken.
The once most powerful army on the continent is a collection of clowns and failing equipment whilst the 100 year old airforce can barely field 25 aircraft of all types.

The labour disaster has been long coming and are the grown crop of seeds planted by generations of ANC supported socialism tainted by a dash of communist party influence.

For as long as the ANC is in power things will continue to crumble and the problem of labour will escalate.

Viva ANC – Amandla.
Giving your voters EXACTLY what they voted for !!!!

Once again, please do not insult the ancient trade of clowns, which requires years of dedicated physical and mental training, risk and self-confidence, artistic creativity and a wild imagination.

All completely lacking in the ranks of the ANC who would however perhaps get work in a circus sweeping horse manure.

Agreed – One should not call them clowns !!
We should call them what they are — CRIMINALS !!!

Any statistics that don’t take into account the 10 million (possibly plus) illegal immigrants in SA renders the statistics useless.

The real unemployment rate is way beyond 50% and the ANC’s BEE policy is.
ironically, driving it up.

SA has an ANC problem, just like Zim has a Zanu-PF problem. Etc for the rest of Africa.

Conscription for community service which earns a small salary ( instead of government grant) provides skill training, accommodation and dignity for all those not perusing futher studies might be the answer. It would definitely provide some sort of hope for the majority of our population who are under 35 yrs old and without hope. Dignity is something earned not given – this would be a good way to start using tax payers money positively instead of in handouts.

True Mac but on quite a few projects, significant numbers of “labourers” are engaged for simple, quite physical work. Under labour law, each has to get full PPE and be enrolled in a formal system. All good? Not so much, often these “workers” are anything but, either doing very little or being a source of theft etc. I am now working on a contract where the contractor plans to employ minimal “labour”; one person (I kid you not).

On another project there is unhappiness from the “local community” about “labour” being employed; they want more. Aside from the local “leaders (EFF and ANC) wanting bribes (protection money), chances are the project will be stopped and zero labour or local subcontractors will be employed. Such is the ANC SA.

I refuse to feel sorry for them — They deserve all they voted for !!

The competitiveness of local industrial development was built upon an abundance of cheap electricity. The manufacturing industry is a major long-term employer and creates stable and well-paid job opportunities. The ANC pulled the rug from underneath their feet with the Eskom disaster. In effect, through grand scale incompetence, negligence, and corruption, Luthuli House has stolen the competitive advantage of the local manufacturing industry and exported it over to international competitors. Luthuli House destroys local jobs and creates jobs overseas.

The mining industry is another major employer. The Mining Charter and local beneficiation requirements have stopped mining development and exploration dead in its tracks. Investors are selling out and moving offshore. They are creating jobs in the rest of Africa. The ANC ensures that the mineral wealth remains locked underground and that human potential remains locked in its shack above ground. The law of unintended consequences proves how this charter, which was intended to distribute mineral wealth equally, actually distributes human misery equally.

A job opportunity is simply an opportunity to add value and to serve a consumer. That’s it. It is not supposed to be another version of the social grant. It is not a donation either. It is a transaction. The employer buys a value-adding service. Someone will only get a job if he is able to create more value than he consumes in wages, militant wage demands, BEE requirements, EE demands, municipal rates and taxes, local beneficiation requirements, and crime. ANC policies set a hurdle for productivity that is impossible to reach for half of society. ANC policies make 50% of South Africans unproductive at the minimum wage.

The ANC creates a moat around the privileged position of elitist Cosatu members. The Tripartite Alliance protects and elevates the position of Cosatu members to the detriment of 50% of the population. Cosatu is the new elite. They have turned themselves into the bourgeoisie! Unionized workers are basking in the sun, and drinking cocktails on an idyllic island in the middle of an ocean of unemployment and misery.

Luthuli House, through sheer incompetence, ignorance, and self-interest, uses populism to export job opportunities to our international competitors and to import unemployment and misery from them. Our record-high unemployment level proves how Luthuli House has turned South Africa into the international dumpsite for the world’s unemployment problems.

Concur Sensei
The unemployment of now is merely a manifestation of the ANC campaigns to burn schools dating from the late sixties.
Their offspring is now proudly unemployable !!

These headers are becoming misleading; that should be “Unemployment remains a national disaster.”

While in the EU the rate averages at about 6% over the last decade while over here the lumpen proletariat continues to vote on the basis of skin colour.

Labor flexibility would be a good start but looking at the business plans that I see and don’t kick off, investors are held back by:

1. Almost no access to capital. Banks will not do any risk capital that is not 200% covered by assets and surety. I am unclear why they refer to risk premium because there is absolutely no risk.
2. Uncertainty. About who will run the ANC, about electricity availability and cost, about the currency.
3. Power is concentrated. Eg on food side a good small guy has no chance with the retailers.

Good info. thanks. It seems as if the banks think that local enterprises are unbankable due to political risk. They are happy to provide running capital or production loans where there are no doubts about the cash flow, but they walk away from longer-term loans. What do they know that we don’t?

Sensei:

My impression is that due to a combination of Basel and good old Incompetence our normal banks (the big four) have absolutely no ability to perform an assessment of the risk of a prospective borrower’s project. In the main they cannot perform a proper valuation. They got the golf course developments completely wrong. Absa and Sanlam got Jooste wrong to the tune of a personal billion loan. So don’t attach weight to maybe they know something. Find me a banking CEO that has actually created and grown a real business?

Headline should read “Unemployment leading to a Failed State, and very quickly”!

When the Security industry(Defence force excluded) but both Formal and Informal(carguards, etc) is one of the county’s largest employment providers, existing on rising crime, you know SA is in a Failed State spiral! Reduce the one, increase the other, and vice-versa, and so it goes further down the hill.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: