While unemployment showed a welcome decrease in the second quarter of 2023, the number of people looking for work in SA still exceeds 7.9 million.
Add the 3.2 million who would love to work and have money to buy food and pay rent, but have given up looking for a job after months of searching got them nothing, and the number of unemployed persons in SA tops 11 million.
Suddenly, it doesn’t look that great that 154 000 people found new jobs, even if it means (in SA) that 154 000 families suddenly have a breadwinner.
The numbers look better when taking a somewhat longer term view. Since the end of June 2022, around 700 000 thousand people have found jobs, and since September 2021 employment increased by one million jobs.
However, employment still did not recover from the sudden sharp spike in retrenchments when the economy came to a standstill after Covid-19 hit. Statistics SA notes that there are still less people in gainful employment in SA than before Covid.
One must also remember that employment was a problem even then. It remains a grim fact that unemployment according to the expanded definition (including discouraged work seekers) is above 42%.
Behind the numbers
As always, statistics are open for interpretation and a lot of people caution that the reality might even be worse than the disparaging numbers indicate.
For instance, Statistician-General Risenga Maluleke pointed out in his presentation of the Quarterly Labour Force Survey (QLFS) results for the second quarter of 2023 that youth unemployment is way worse, while the report also shows that unemployment in some regions in SA is way higher than in others.
Casey Delport, fixed income investment analyst at Anchor Capital, says the data in the survey could have been skewed by an increase in the number of people who were not economically active for reasons other than discouragement in the period of the survey. The increase of 93 000 people who exited the workforce impacted the calculation.
She also points out that the results of the latest QLFS differ from those in other surveys.
“Overall, employment data from the QLFS survey (a household-based survey of labour market dynamics covering the formal, informal, and agricultural sectors) has, in recent months, diverged sharply from data reported in the Quarterly Employment Statistics (QES) survey. The QES is an enterprise-based labour market survey that only reports on the formal sector.
“Thus, gaining a more transparent and holistic picture of the unemployment picture in SA is becoming increasingly difficult,” she says.
“Furthermore, the QLFS suffered data collection challenges through the Covid-19 pandemic, but these appear to have normalised over the past few quarters.
“Still, it does continue to make it difficult to interpret the extent of the increase in job growth as reported in the QLFS – which percentage reflects ‘real’ jobs and how much is merely statistical noise/rebalancing.”
Delport says the figures show that the pace of job growth slowed markedly. The number of employed persons increased by 154 000 in the second quarter of 2023 compared to an increase of 258 000 new employment opportunities in the first quarter – “reflective of the weak underlying growth environment”.
“We maintain that the official headline unemployment numbers do not fully reflect the true extent of the unemployment crisis in the country. How unemployment is measured tends to overlook specific segments of the population, such as discouraged workers who have given up searching for jobs and are, therefore, not considered part of the active labour force.
“Additionally, the official statistics do not adequately capture informal and underemployed workers. Furthermore, the official unemployment rate might not fully account for the quality of jobs available or the degree of job security.
“Many individuals in SA are trapped in low-skilled and precarious employment, leading to underemployment and persistent poverty. Overall, the unemployment problem in SA remains a significant and complex challenge,” says Delport.
Her arguments are borne out by the statistic that informal employment decreased by 33 000 as formal employment increased by 143 000 – signifying a move to ‘proper’ jobs with a pay slip, Unemployment Insurance Fund benefits and (hopefully) access to a retirement fund.
Delport repeats the stark facts: “The country’s unemployment rate has persistently been one of the highest in the world, with a disproportionate impact on the youth population.
“Tackling this multifaceted problem requires comprehensive and sustainable strategies encompassing education reform, job creation, and inclusive economic growth. Irrespective of the exact details in the data, typically, in the SA economy, material job creation only occurs when GDP growth approaches 3% per annum.
“Despite the seemingly resilient nature of the domestic economy to the various structural constraints present, simply put, the economy is currently not growing at an adequate rate to sustainably boost long-term employment prospects,” she says.
Thanda Sithole, senior economist at FNB, says the unemployment rate remains stubbornly high, and above the pre-pandemic average of 25.5%.
“Detailed data indicates that it is the private household sector that has dragged on the overall recovery, reflecting mounting cost-of-living pressures,” says Sithole.
“Meanwhile, the recovery in the formal non-agricultural sector is effectively complete.
“Overall, the economy has been cumulatively adding jobs since the last quarter of 2021, to the tune of 2.06 million jobs.
“However, the prevailing economic weakness, alongside the dynamic impact of load shedding, poses a downside risk to the ongoing labour market momentum. The domestic economy is expected to stagnate at 0.2% this year, following 1.9% growth in 2022, before gradually recovering 1.8% by 2025.”
The data shows big differences between different parts of the population, split by region, gender, race, age and education.
Not surprisingly, unemployment is lower among older people (more work experience), those with skills, and in parts of SA where the economy is growing faster.
It might be a very cynical conclusion, but the way to get a job in SA is to have a couple of degrees – and be a white male, at least 55 years of age, stay in the Western Cape and work in the construction or utility industry (water and electricity). Installing solar panels in Cape Town looks like the best bet.
The Western Cape has the lowest unemployment rate in SA at 20.9%, compared to the average of 32.6%. Overall, unemployment in the age group 55 to retirement at 65 years is low at less than 11%.
Unemployment differs widely by population group. It is 7.4% for whites and 36.8% for blacks. Unemployment among women (at nearly 36%) is higher than that for men (32%).
Stats SA noted in an analysis of the survey that black women fare even worse with an unemployment rate of 39.8% in the last quarter.
“When women are employed, they are more likely to work in low-paying jobs in vulnerable conditions, and there is a slow improvement forecast for the future,” according to the Stats SA report.
“Vulnerable employment is a combination of ‘own account work’ and ‘contributing family work’ or unpaid household work, defined as employment statuses that are associated with ‘low levels of development and high levels of poverty’.
“More women than men work as unpaid household members and women are less likely to be employers. In the second quarter of 2023, only 3.3% of women were employers compared to 7.5% of men.”
Education can help. The difference in employment between people with higher education and those without is vast.
“The report shows that of the 7,9 million unemployed persons in the second quarter of 2023, as many as 50.1% did not have matric, followed by those with matric at 40.2%. Only 6,6% of the unemployed had other tertiary qualifications, while 2.4% of unemployed persons were graduates,” according to Stats SA.
The harsh reality is that a black female from the rural Eastern Cape has literally no prospects of joining the economy if she leaves school before finishing Matric, and then her chance of getting a job is slim.