As many as 9.3 million people are looking for work in South Africa – an economy in recession and where the average person is getting poorer.
The country’s economic decline has been chalked up to a number of issues, from political and policy uncertainty, structural unemployment, labour force red tape, and inequality and infrastructure deficits.
GDP data out at the start of June showed that the local economy declined by 0.7% in the first quarter of 2017, putting the country into a technical recession.
The World Bank also noted that growth in the country remains problematic, lowering its estimates for 2017 to 0.6% and 1.1% growth in 2018.
Stats SA announced at the start of June that the country’s unemployment rate hit its worst level in 14 years.
The stats body published its Quarterly Labour Force Survey for the first quarter of 2017, showing that the addition of 144,000 jobs was offset by the growth in the number of job-seekers by 433,000.
This pushed the unemployment rate to 27.7% in the first quarter of 2017 – the highest rate observed since September 2003.
The expanded unemployment rate – which includes those who wanted to work but did not look for work – also hit a new high of 36.4%, StatsSA said.
And to compound matters, a report by the Institute of Race Relations found that currently more people receive social grants in SA than there are people with jobs.
“In 2016, there were 15,545,000 people with jobs in South Africa while 17,094,331 people were receiving social grants,” said IRR analyst, Gerbrandt van Heerden.
“The numbers are a recipe for social and political chaos. With South Africa formally in recession, the government will find it difficult to afford the cost of its social grants programme.”
Worryingly, StasSA’s data also showed that South Africa has more domestic workers in employment than it does professionals.
Domestic workers currently make up 6.2% of the country’s 16.2 million person workforce, while professional make up 5.5%, with the gap between the two groups widening every quarter.
The number of professionals grew to 895,000 between January and March of this year, while the number of domestic workers improved to more than a million.
The stats body showed that as many people were employed in private households in the first quarter – 1.319 million – as in agriculture and mining combined.
The World Economic Forum said that the root of unemployment is not only a lack of jobs; a key underlying issue is also the inadequately educated workforce.
There were approximately 500,000 extra people in employment in Q1:2017 compared to the same period last year. The year-on-year employment growth was driven by manufacturing (145,000), construction (143,000) and finance (152,000).
“Employment growth is just not nearly fast enough to absorb enough people and so the unemployment problem and the fiscal pressures and risks continue,” Elna Moolman, an economist at Macquarie Group told Bloomberg.
The stats body noted that of the 433,000 people who joined the ranks of the unemployed, approximately 58% were young people aged 15-34 increasing the youth unemployment rate by 1.6 percentage points to 38.6%.
Unemployment rate by education status, Q1:2008 to Q1:2017