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We are getting poorer in SA

Unemployment will continue to increase as long as population growth exceeds economic growth.

The publication of the most recent Quarterly Labour Force Survey by Statistics SA and its calculations that the number of unemployed people continues to increase have once again elicited strong opinions and calls that somebody must do something.

Reading the labour force and unemployment statistics together with the report on population growth that Stats SA published a few days earlier – and the statement of the SA Reserve Bank on interest rates a week earlier – creates an even gloomier picture.

The labour force survey for the second quarter of 2019 shows that the economy added a paltry 25 000 jobs compared to a year ago, but that the labour force increased by 598 000 work seekers.

This means only a single job was available for every 24 people who entered the labour market during the last year.

The figures are even worse when taking a closer look at the different categories of employment as measured by Stats SA. Formal, non-agricultural employment continued to decrease rapidly and posted a loss of 148 000 jobs compared to a year ago.

Read: The consequences of a disillusioned youth

The agricultural sector shed 1 000 jobs, according to Stats SA, and even private households cut back on employment – by 45 000 people compared to a year ago.

Employment by industry (000)

  Q2 2018 Q2 2019 Change
Agriculture 843 842 -0.2%
Mining 435 381 -12.4%
Manufacturing 1 744 1 789 2.6%
Utilities 161 151 -5.8%
Construction 1 476 1 363 -7.6%
Trade 3 219 3 429 6.5%
Transport 1 014 983 -3.1%
Finance 2 399 2 495 4%
Community services 3 692 3 622 -1.9%
Private households 1 296 1 251 -3.5%
Total 16.29m 16.31m 0.2%

Source: Stats SA Quarterly Labour Force Survey, June 2019
 
The only category to show an increase in employment was the informal sector, apparently adding 219 000 jobs. One can only speculate what these ‘jobs’ are, but it seems safe to say that informal employment is a case of necessity rather than choice and that nobody aspires to selling clothes hangers at traffic lights.

Digging out Stats SA’s 2014 labour force survey shows than we are losing the battle against unemployment and, by indication, the war against poverty and inequality.

The number of unemployed people has increased in the five years since the 2014 survey by some 1.6 million people due to an increase of nearly three million in both the population and the labour force. The economy could only absorb 1.3 million of these new work seekers.

The Stats SA figures show that some 800 000 workers entered the informal rather than the formal economy.

Change in employment statistics over five years (000)

  June 2014 June 2019 Change
Working age population 35 332 38 433 3 101
Labour force 20 122 22 968 2 846
Employed 15 055 16 313 1 258
Informal sector 2 379 3 048 669
Unemployed 5 067 6 655 1 588
Unemployment rate 25.2% 29% 3.8%

Source: Stats SA Mid-year Population Estimates, July 2019

In just the past year, the number of unemployed persons in SA increased by 573 000 to nearly 6.66 million. The total increases to 9.4 million when adding the discouraged work seekers.

Stats SA’s definition of a discouraged work seeker is a person who was not employed during the reference period of the survey and who wanted work, but did not take active steps to find work in four weeks prior to the survey. Reasons for becoming discouraged in not finding work include a lack of available jobs, unable to find work that matches the work seeker’s skills level, and losing hope in finding any kind of work.

The biggest driver behind the increase in the unemployment rate to 29% – or 38.5% including the discouraged work seekers – is the continued increase in the population. While the number of employed persons increased by 0.2% compared to a year ago, the labour force increased by 2.7%.

Dim prospects

The low growth in new employment opportunities is the result of low economic growth over the past year and little indication of better prospects over the short to medium term.

Reserve Bank Governor Lesetja Kganyago said in a statement after the July meeting of the Monetary Policy Committee that prospects for the economy remain a concern.

“Gross domestic product contracted by 3.2% in the first quarter, reflecting weakness in most sectors of the economy. The sharp quarterly decline was primarily caused by electricity shortages and strikes that fed into broader weakness in investment, household consumption and employment growth,” said Kganyago.

The statement concluded that “continued low business confidence remains a concern for the MPC”, quoting the Absa Purchasing Managers’ Index which remains in negative territory and low business confidence as reflected by the Rand Merchant Bank/Bureau for Economic Research business confidence index.

“The SA Reserve Bank’s composite leading business cycle indicator continues to trend lower,” says Kganyago. The bank now expects GDP growth of only 0.6% for 2019 compared to its previous forecast of 1% a couple of months ago, based on an important assumption that there are no significant unforeseen disruptions.

The future looks even more challenging when we read the latest report on changes in the population after looking at the Reserve Bank’s forecasts and the shocking figures in the labour market.

Stats SA’s latest research estimates that SA’s total population increased by around 1.4% during the past year to nearly 58.8 million people at the end of June 2019.

Given the 0.6% growth in GDP – basically the annual increase in the amount of stuff we produce – the result is that, on average, every person in SA has less in terms of goods and services than they had a year ago.

Stats SA also notes that SA has a fairly young population with nearly 29% of the population younger than the age of 15. More than 42 million people are younger than 40.

The increase in the population is due to reduced infant mortality and an overall increase in life expectancy, from 69 years in 2004 to nearly 73 years for babies born in 2019. It is also significant that immigration from the rest of Africa contributed significantly to the increase in SA’s population numbers.

Stats SA estimates show that SA received a net inflow of nearly 3.6 million people between 1985 and the middle to 2016, with Stats SA estimating that another million will migrate to SA between 2016 and 2021.

Migration into and out of South Africa

  Black African Indian/Asian White Net migration
1985-2000 588 847 36 908 -202 868 422 887
2001-2006 546 993 25 310 -99 574 472 729
2006-2011 809 780 43 222 -106 787 746 215
2011-2016 972 995 54 697 -111 346 916 346
2016-2021 1 094 864 60 791 -115 906 1 039 749
Total 4 013 479 220 928 -636 481 3 597 926

Source: Stats SA

The bulk of the immigrants are from African countries. Stats SA estimates that by 2021 more than 4 million migrants from Africa will arrive in SA. The figures also indicate that the rate of migration from the rest of Africa is increasing.

In contrast, figures show that the emigration of white South Africans is increasing. It is likely that between 1985 and 2021 more than 636 000 whites – in excess of 10% of the white population – will have left SA.

Stats SA says that current data on emigration levels is limited, but it uses a wide range of sources and research documents. The figures are probably more accurate than formal immigration and emigration statistics as a lot of people do not necessarily do all the paperwork before arriving in or leaving the country.

The net result of migration and population growth is that SA’s population increased by 8.8% in the five years since 2014, from 54 million to the current nearly 59 million. Unfortunately, the economy grew much slower.

Reserve Bank figures show that real GDP increased by only 4.3% over the same period. The end result is that real GDP per capita decreased by 4.1% over the last year. In simple terms, every person in SA is, on average, 4.1% poorer than five years ago.

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One day soon this ticking time bomb will explode!

Hopefully it will taker the main reason for this position, the clueless ANC, with it.

The only way that will happen will either be at the polls or at the end of a rifle barrel.

Paradoxically, SA will have to increase unemployment first, in order to reduce unemployment later. All SOEs need to shed 60% to 70% of their useless workers, as does the bloated civil service. The bloated public alleged service and parasitic SOEs are simply unaffordable and a drain on the fiscus. Economic growth can only recover one 1-2 million ANC voters have been fired from these organizations. I’m not holding my breath that this is possible without outside intervention (read: the IMF.)

That is the thing. We are seriously in the dwang, heading for complete and utter decimation (like Zim). Out government will not make the changes that are needed to get the country back on track. As I’ve said in a previous comment, I’m convinced they have been told what is wrong and how to fix it, but they do not have the political will. At the moment we are just running up a deficit, but that cannot continue unabated. How, then, do you fix the problem if the ones who are supposed to fix the problem is unwilling? The rescuer of last resort is the IMF (or China). Nobody wants the IMF (or China) to get involved, but if there is no alternative, then I say, the sooner the better. One can either die a very slow, painful death, or take your medicine/yank the plaster off, so that healing can start.

In a free market economy, increase of labor supply would mean wages would fall. Since wages are fixed, it means the rand weakens to adjust.

Similar to how Zimbabwe’s attempt at fixed prices on food during hyperinflation lead to further currency weakening.

A whopping 40% depreciation in 5 years.. or lets say average South African is 40% poorer instead of 4% as per article.

Other African socialist regimes tend to do worse so on the bright side, as a defunct African state, we’re at least outperforming our peers 😉

Large scale industrialization was the result of the implementation of the elements of capitalism, namely law-and-order, property rights and individual rights. These factors helped civilization to escape the Malthusian Trap that brings a balance between population growth and the availability of resources. Socialist governments usually undo the benefits of capitalism and industrialization. The infringements on property-rights and the demolition of law-and-order always lead to a decline in economic activity. Therefore, socialism takes society back to the Malthusian Trap. This implies that nature has to solve the disaster that results from the socialist mindset. Famine, disease and a low fertility rate is natures way of solving the imbalance between economic policy and population growth.

This experiment is taking place in Venezuela at the moment. Medication like insulin, ARV’s and antibiotics are unavailable. The average citizen lost 12 kg of body weight in 2018. For how long can people continue to lose 12 kg per year before the Malthusian Trap brings equilibrium?

Luthuli House pushes the entire population into this trap. Voters are blindly following the tripartite alliance into the Malthusian trap.

The current South African population will have to decline by at least 50% before there will be any form of balance between the population and the results of ANC policies. This process won’t be democratic. Nature does not care about your BEE status or about the Mining Charter. Famine is the default system that kicks in when humans make catastrophic errors.

Agreed.

At present the intention is to aggressively grow the population buy paying people to have children in the form of child grants. In some areas like the Eastern Cape with limited job opportunities this serves as a way of survival.

In pre-colonial times war and famine controlled population growth. Law and order was at the chief’s discretion and commercial food production was unknown.

Apparently someone made a study that just by removing free ARVs and TB medicines SA’s population would drop by 25 million in 12 Months.

This made me realise the thinking behind Thabo Mbeki’s stance on free ARV’s

Just as I was beginning to think that Moneyweb’s commentary was august this strand emerges. Get your facts straight Mmmm and Eswatini.

Someone made a study… 59 Million people with about 13% infection rate, (where most people that has TB also have HIV) please enlighten us to how you calculate that nonsense number. The country is going down the drain because people repeat fake news without checking facts.

Fertility is correlated with education and development levels, nothing else. There is a demographic fertility cycle where a population goes through a period of heightened growth, followed by decline of fertility and eventual decline of the population.
To hope that AIDS will annihilate an entire human population is evil and in outcome you can expect to be the opposite…because young adults dying of AIDS will leave an army of orphans behind. None will have much hope and will become a cause of problems in future years. Single parent households will have fewer resources, will be less developed and because development levels are correlated with fertility, you would expect families or communities affected by AIDS to be more fertile.
This ties in with the social grant system, which is a last gasp for many desperate people. Giving them a bit of cash can only benefit an entire community. Most of this cash is spent in the local economy and due to the velocity of money, it has great stimulating effect on the economy.
A stimulated economy will improve the development of the community and could lead to a reduction in fertility over a long period.
However, I would do social grants on compassionate grounds rather than as some convoluted plan to lower fertility. There are lots of really desperate people out there. They have been weakened by years of poverty. Before that they had their psyche’s destroyed by the apartheid bullies. They really need as much help as they can get.

There is only one thing holding this country back and it is called “the African way of doing things” and it is based on foolish misplaced pride and outdated beliefs. Recently the president of Tanzania , John Magufuli, told a rally in Meatu, that outsiders who promote birth control are giving bad advice, and that people who use contraceptives are lazy. “You people of Meatu keep livestock. You are good farmers. You can feed your children. Why would you opt for birth control? People who use birth control do so because they do not want to work hard and feed a large family”, he added.

my song to CR by Christina Aquilera – “say something I’m giving up on you”

A ticking time-bomb population increase oh dear me, even as a brown scholar I too would want to emigrate to better country even a better prospective African country but guys SA is literally going down…the JSE cannot save SA and neither can big business. It is clear as daylight that the IMF is the last resort they will tackle unemployment and growth. Guys maybe we should have the SARB governor run the country. The SOE’s will not shed 60% workforce as will the Wage bill not reduce because 15% of public funds goes towards bloated wages of public servants that do jack….s….t. even if you decrease ministerial packages and expenditure by 10% that will not add up to the disastrous losses of SOE’s sitting on the balance of accounts. Big business CEO’s are leaving SA and also CEO’s that cannot get the State to support their will in turning things around also resign from their jobs. The affluent suburbs, the elite brown and whites we cannot keep paying exorbitant taxes and keep this current regime in power. In fact we do not need democracy we can rather sell all the SOE’s to china because China is really showing the world how to run a State Empire. Even if we as brown and white vote together to dissolve power the millions of sheep will be the definition of insanity for decades to come.

ANC voters should not be allowed to leave, let them stay and enjoy the fruits of their decision.

They deserve nothing more than Zimbabwe. May all the taxpayers leave the country and let them become Zim 2.

More bad news today-Distel eps going down, Nedbank not great
SA share market at 55k-just about zero return in 5 years -while offshore markets have flown upwards. Also ZAR close to 15 so petrol up(unless oil falls) and infaltion up so interest rates cannot go down much. Motrgage in Germany -10 year fixed at 1,8%-SA 10%! Hopeless case!!

Note offshore markets the last year is also bad.

1 year return:
Dow Jones Index +3%
ALL European markets, moving from West to East, from Portugal to Frankfurt down an average -5%
Asia markets are down from Singapore to Tokyo on average -8% ( South Korea -15%, Hong Kong -10% )

Lets just put things in perspective, the JSE is down, but markets in most of the rest of the world aren’t doing great either over the last year.

what does the anc expect if rsa sits with an extra 3 million zim citizens – never mind the rest of other intruders – please do not even try and convince me that they all became very much willing taxpayers (other than forced paye), while they fully utilize any benefit available here in rsa – anc still can’t see why a sovereign country needs borders and border control – with the eff’s limited long term future insight they even suggested:”africa must have no borders at all”

And crime has got to the point where it’s effect, the Security industry, is the largest employer(formal and informal combined) in SA, so a massive Catch 22 spiral in play which requires someone like Mike Schussler to work that one out by numbers!!! An instant reduction in crime = an instant increase in unemployment, or am I completely wrong!!??

For as long as the local populace believe that “ freedom” means getting something for free this mindset will continue.
Overpopulation is exacerbated by government grants encouraging an out of control birth rate without thought of the consequences.
The minority in this country can not afford to continue financing the majority. After all, it’s been 25yrs since “liberation”from the shackles of apartheid. You can’t keep on blaming the minority for everything. STOP HAVING BABIES!

Would someone please try confirm the actual number of illegal immigrants we have in SA and how this complicates this dire picture?

Speak to Herman Mashaba, he is right at the coalface of this invasion as we saw recently with the clashes in JHB CBD. As he rightly states, SA’s borders are totally porous and the ANC has once again ceded its responsibility to secure this country.

So it is above 10m!

Spare a thought for how bad things are in other countries that we had 3.6m immigrants…

people are generally ignorant to other countries problems. That is why Trump’s my man….he understands his countries problems and will do all for his country and not his party.

I guess everyone’s view is relative. I’m an immigrant here, along with some prior bad stuff in the family elsewhere, so I understand those that move to a better place than where they come from… strange, I think those that are leaving SA in the graph actually feel the same way as those that are arriving in SA.

What is the end game? We complain about the government,ANC, taxes,security,Eskom,SAA etc. Is there a plan to make SA a better place for all? I do not think it will or can be done. Now WHAT?

“Unemployment will continue to increase as long as population growth exceeds economic growth.”

WOW! That is what I have been saying for years! Strange how people only did the maths now to figure that out. Pretty logical

People had the chance to vote the ANC out or greatly weaken their position so that a coalition govt would have to be formed and they failed to take the chance. Now we are living with the consequences. The ANC has no answers, they are divided and weak. Their solution is to sit back and do nothing, as always. But people put all their hopes in Cyril Ramaphosa. Ramaphosa was Zuma’s deputy for 9 years and did NOTHING while this country was being hollowed out! He is rich beyond all of our comprehension… you think he cares about the little man sitting in his shack, plotting mayhem? Hah! African leaders have shown time and time again they care nothing for their people.

There are really only two end scenarios of all this is: one is revolution of the violent kind; the other is a devolution into another Zimbabwe/Mozambique/Malawi etc …

We are already in a criminal revolution of the violent kind and should the economy collapse even further, we could well be in for a long drawn out slide into the fourth world like Venezuela.

I’m sure this same thing applies to a few African countries, you cannot keep up with population growth like that.

Two sides to the coin, keeping people uneducated and without basic services leads to this excessive population growth. Open borders makes it worse.

Then the other side is the same poor leadership tanking the economy.

Not rocket science, people have been saying this for 10 years but they’ve probably taken their skills and capital offshore by now.

How do you bring this back? Not sure, could start with less reverse racism and some decent business reform. Is it going to happen? Seems highly unlikely in the medium term and maybe long term.

A debt trap that will have no end with all the looting,corruption,greed.
Africa the dark continent.

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