Jobs bloodbath in South Africa
South Africa’s unemployment crisis is deepening, with the country facing a significant jobs bloodbath that has left many grappling with economic uncertainty.
According to the latest data from Statistics South Africa’s (Stats SA) Quarterly Labour Force Survey, 92,000 jobs were lost in the second quarter of 2024 compared to the first quarter.
This decline in employment has compounded an already dire situation, underscoring the continued fragility of the country’s labour market.
The official unemployment rate increased sharply over the first half of 2024.
After a slight increase of 0.8 percentage points from 32.1% in the fourth quarter of 2023 to 32.9% in the first quarter of 2024, it jumped again by 0.6 percentage points to 33.5% in the second quarter.
Although the country had seen a slight gain of 22,000 jobs in the first quarter of 2024, this was offset by the losses of the previous quarter, making any employment progress seem negligible.
This sustained job loss trend has hit various sectors of the economy.
Trade and agriculture, two of the hardest-hit industries, lost a staggering 111,000 and 45,000 jobs, respectively.
While these losses were somewhat balanced by gains in manufacturing, community, and social services, they were insufficient to reverse the overall downward spiral.
The ripple effects of these job losses are visible in the overall labour market, where the number of unemployed people swelled by 158,000 to 8.4 million in the second quarter alone.
Adding to the bleak outlook, the number of discouraged work seekers—those who have given up looking for jobs—also increased by 147,000, up by 4.8% in just one quarter.
When considering the broader picture for 2024, the number of unemployed South Africans rose by approximately 500,000 between the end of 2023 and the second quarter of 2024.
Sectors hit hard
South Africa’s unemployment crisis cannot be viewed in isolation but as part of a broader economic malaise that has persisted for years.
A combination of sluggish economic growth, ongoing power shortages, and structural inefficiencies has contributed to these devastating job losses.
While promising in certain sectors, the country’s post-pandemic economic recovery has failed to create the broad-based employment opportunities needed to address rising unemployment.
Sectors like agriculture, private services, and logistics, which together contribute 40% to the GDP, have shown resilience, but industries such as manufacturing and mining continue to struggle.
According to data from Stats SA and the Trade and Industrial Policy Strategies (TIPS), manufacturing output has declined by 5% since 2019, leading to significant job losses.
Between April 2023 and March 2024 alone, the manufacturing sector shed 50,000 jobs, part of a long-term trend that has seen the sector lose 150,000 positions since the pre-pandemic period.
Specific industries within manufacturing, such as automotive, glass, and non-metallic minerals, have experienced especially severe job cuts.
For instance, the transport equipment sector saw a 20% decline in employment, resulting in over 20,000 job losses.
SOE’s not spared
South Africa’s state-owned enterprises (SOEs), long regarded as significant employers, have not been spared from the employment crisis.
Telkom, the country’s largest telecommunications company since 1994, has drastically reduced its workforce over the past two decades.
From a peak of 61,237 employees in 1999, Telkom now employs just 9,877 people, down 15% from the previous year, as part of a cost-cutting restructuring process.
The company’s struggles reflect broader challenges faced by SOEs, many of which have been hit by financial instability, inefficiencies, and declining revenues.
Similarly, the South African Post Office, another state-owned entity, has cut nearly half its workforce as part of its business rescue process.
Having last posted a profit in 2013, the Post Office has racked up more than R19 billion in losses over the past decade.
The nearly 5,000 job cuts at the Post Office highlight the precarious state of government-owned businesses and the ripple effects their struggles have on national employment figures.
Addressing the unemployment crisis in South Africa requires more than temporary fixes.
As NWU Business School economist Prof. Raymond Parsons points out, the country’s current economic growth trajectory is simply insufficient to reverse the unemployment trend.
With GDP growth forecast at just 1.0% for 2024, South Africa’s economy is not expanding fast enough to generate the jobs needed to address the nearly 8.4 million unemployed people in the country.
For any meaningful change to occur, South Africa must prioritise policies that promote inclusive, job-rich growth.
This includes investing in sectors with the potential for job creation and addressing the underlying structural issues that continue to hamper economic progress.
Until these remedies are implemented, South Africa’s jobs crisis is likely to persist, leaving millions without the prospect of stable employment in the near future.
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