This is South Africa’s ‘real’ unemployment rate

 ·1 Nov 2019

Statistics South Africa has released the country’s jobs data for the third quarter of 2019, showing that the unemployment rate has increased to 29.1%.

Commenting on the data, PwC said that this is the highest jobless reading since 2003 and South Africa now has the joint fourth-highest unemployment rate out of 182 countries as tracked by Trading Economics.

“This is due to no net year-on-year increase in employment over the past year,” the group said.

“While agriculture (+4.5% y-o-y) and private households (+1.5% y-o-y) increased their payrolls in 2019Q3 compared to the same period last year, the decline in formal (-o.4% y-o-y) and informal (-0.7% y-o-y) non-agriculture employment countered these gains.

“The expanded unemployment rate – i.e. including people who have given up on finding a job – remained at 38.5%.”

The below graph shows how the expanded unemployment rate compares to the official unemployment rate.

Job losses 

PwC said that most of the job losses over the past year occurred in the unskilled and semi-skilled trades.

Employment in craft and related trade (-106,000), amongst plant and machine operators (-39,000) and within elementary occupations (-55,000) showed the largest losses.

“With skilled workers seeing fewer losses and gains in some areas, the nature of job costs is hitting harder for lower-income households – thereby entrenching inequality and poverty. Employment losses were seen in some of the poorer provinces, including Limpopo (-2.9% y-o-y) and North West (-2.0% y-o-y).

“In turn, the Free State (+2.7% y-o-y) and KwaZulu-Natal (+1.5% y-o-y) benefited from increases in farm employment,” it said.

Little improvement

PwC highlighted that the latest Stats SA employment data comes nearly 13 months after the government’s jobs summit and 14 months after the release of President Cyril Ramaphosa’s economic stimulus and recovery plan.

“Clearly, neither endeavour has had a real positive impact on the country’s employment creation,” it said.

“The country’s 6.7 million unemployed and 2.8 million discouraged workers – people willing to work but unable to find work in their area or having abandoned searching for a job – are left with few answers as to how the situation will be turned around.”

The group noted that a lack of skills also remains a major concern for the country.

It cited the recently released World Economic Forum (WEF) Global Competitiveness Report which ranked South Africa 110th out of 141 countries for the quality of labour market policies in helping unemployed people to reskill and find new employment.

“The lack of required skills is a massive issue for the country: the overall skills level of the current workforce is ranked 101st out of 141 countries.,” it said.

“Furthermore, based on considerations like critical thinking in teaching and the pupil-to-teacher ratio in primary education, the skills of the country’s future workforce is ranked 109th.

“Not surprisingly, the ease of finding skilled employees is ranked 98th out of 141 countries. This helps explain the country’s inability to create jobs: a lack of aptly skilled workers.”

Read: South Africa’s unemployment rate climbs to 29.1%

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