South Africa

SA’s volatile (un)employment crisis: Even jobs that are created may not last

By Marianne Merten 10 May 2016

Unemployment is up, no matter which way you look at it. On Monday Statistics South Africa (Stats SA) said joblessness in the first three months of 2016 is up 2.2% from the last three months of 2015. And unemployment is up 0.3% in the first quarter of 2016 against the first quarter of 2015. Releasing the quarterly labour force survey, Statistician-General Pali Lehohla said traditionally unemployment peaks in any year’s first quarter – with the festive’s season temporary jobs gone – but 2016 recorded the highest spike in eight years. By MARIANNE MERTEN.

The official unemployment rate in South Africa stood at 26.7% in the first three months of 2016. But the expanded definition of unemployment is almost 10 percentage points higher at 36.3%. Depending on the definition there are 5.7-million or 8.9-million unemployed South Africans.

Official unemployment is defined as being able, willing and actively seeking work, but not having a job. The expanded definition of unemployment includes those too discouraged to try to find work alongside those studying or doing unpaid work in the home like caring for the elderly or children. For many in civil society, academia and trade unions, the expanded definition of unemployment is a truer reflection of the state of joblessness in South Africa.

Monday’s Stats SA quarterly labour force survey makes it very clear the number of discouraged job seekers is up. Of the 15.1-million economically inactive South Africans, just over 2.4-million are discouraged workseekers: that’s about 171,000 more dispirited citizens in first quarter of 2016 compared to the last quarter of 2015. And the gap between the official and expanded unemployment definitions is widening: to 9.6% in the first three months of this year, compared to 7.2% in the last three months of 2015.

Trade union federation Cosatu has described the unemployment rate as “shocking and depressing”, saying it has long called for a jobs summit without much enthusiasm by government or the private sector.

This reluctance from these social partners is a sign that both government and big business are in denial about what is going on. This is worrying because the status quo is not only unacceptable but is also unsustainable,” said Cosatu on Monday.

The failure of policies to address systemic flaws was also raised by DA MP David Maynier. Such unemployment levels “cannot be blamed on external factors alone, and has much to do with the failure of government to implement the structural reforms necessary to boost economic growth and create jobs in South Africa”, he said.

For Lehohla the picture is “worrying” as unemployment has remained stubborn at similar levels over time. Policy interventions by government and actions by corporate South Africa did not appear to make a sufficient difference to turn around the situation – and the country is losing out on the demographic dividend. That’s the economic growth potential when a country’s working age population is bigger than those not working, or those younger than 14 and older than 64. “If there had (been enough measures), then you’d see the democratic dividend occurring. Enough is when you see a change…” Lehohla said. “The economic climate isn’t helping.”

The unemployment rate comes even as Stats SA shows jobs are being created, but that’s seemingly not enough to counteract losses, never mind at a volume to turn around joblessness in South Africa. The vast fluctuations indicate an overall volatile (un)employment picture: jobs, even when they are created, may not last, leaving South African citizens vulnerable amid tough economic times and rising food and other commodity prices.

Further questions must be asked as employment remains linked to educational achievements as various Stats SA surveys continue to highlight that the majority of the unemployed are those without even a matric.

There are 36.4-million South Africans of working age of 15 to 64. Of this number, 15.1-million are not economically active (including 2.4-million discouraged workseekers), 15.7-million are employed and 5.7-million are unemployed on the official definition, or 8.9-million on the expanded definition.

In the formal sector year on year, more jobs have been created, 167,000 more in the first quarter of 2016, compared to the first quarter of 2015. But the employment trend is undercut by developments quarter-to-quarter: formal sector jobs declined by 217,000 in the first quarter of 2016 after 250,000 jobs were created in the last quarter of 2015.

The biggest losers by sector from the last quarter of 2015 to the first quarter of 2016 were manufacturing (down 100,000), trade (down 119,000) and construction (down 77,000). Year on year, comparing the first quarters of 2016 and 2015, manufacturing shed 141,000 jobs and construction 12,000. However, trade saw 115,000 jobs created in this year-on-year perspective, although this rate trailing retail trade sales. Agriculture saw 16,000 jobs created in the first quarter of 2016, but that’s fewer than in the same period of 2015, and not enough to reverse year-on-year declines.

The biggest job creators are services (including government employment), which increased by 225,000 jobs from the first quarter of 2015 to the same period in 2016.

In the informal sector, Monday’s quarterly labour force survey indicated an extended downward trend. In the last quarter of 2015 the informal sector shed 37,000 jobs, followed by the loss of another 111,000 jobs in the first quarter of this year. Still, with a long-term view, in the first quarter of 2016 the informal sector still employed 90,000 more South Africans than in the first quarter of 2015. However, the Stats SA survey does not address the quality of the current 2.6-million informal sector jobs, which would include hawkers and day labourers whose income may neither be stable or even guaranteed.

Unemployment in South Africa remains racially defined, intricately linked to education levels – and has a gender and youth bias. Regardless of what definition of unemployment is used, more women are without a job, as youth also emerge as adversely affected.

According to Stats SA, in the first quarter of 2016 unemployment among whites stood at 7.2%, but 30.1% among black Africans. And 33% of youth aged 15 to 34 were not in employment, education or further training. That’s up from 29.1% in the last quarter of last year – although the increase could be attributed to matriculants who have been unable to enrol in higher education and training or to find employment. It appears this percentage is inching up to the 33.5% level recorded in the first quarter of 2013. According to the Stats SA survey, for every five young people not employed, in education or further training, three do not have matric.

The solution? Jobs must be created in line with the growth of the working-age population, which must be sufficiently skilled. And given the lack of meaningful, structural change under existing policies, this would require politicians and policy-makers to go back to the drawing board. DM

Photo: Protesters chant slogans in Siyathemba township outside Balfour July 22, 2009. Protesters hurled stones at police, who responded with teargas and rubber bullets, after thousands marched through the streets on Wednesday over poor services and unemployment. REUTERS/Siphiwe Sibeko

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