Cape Town - The University of South Africa (Unisa) and Momentum warned that South Africa could lose up to a million jobs by next year if stagnant economic growth was not addressed.
The two released the Household Financial Wellness Index on Tuesday showing the balance between growth in employment and the gross domestic product (GDP) declined from 0.7 in 2011 to -0.2 in 2015 and was expected to go even below 0.3 this year and next year.
The index found that unemployment increased from 4.6 million people in 2011 to 5.9 million in 2016. It said it expected that 7.2 million would be out of jobs at the end of 2018, charging that overall unemployment could hit 31 percent next year if the current economic, demographic and employment trends continue.
Carel van Aardt, a professor at the Bureau of Market Research at Unisa, said the recent recession, which could have been avoided, and policy uncertainties were to blame for the bleak outlook.
Van Aardt added that there appeared to be no plans to deal with investor concerns from government.
“It’s going to be tougher to get a job and hang on to a job during 2017 and 2018. It’s clear from available employment figures that many businesses are struggling to survive with the implication that they will on average rather shed more jobs than create more jobs,” Van Aardt said.
48 000 jobs lost
“While employment is stagnating, compensation is growing strongly, with the implication that a small percentage of income earners are cashing in big time.”
In June, Statistics South Africa (Stats SA) said 48 000 non-agricultural formal jobs were lost in the first quarter of the year, driven mainly by trade and finance and business services, which lost 32 000 and 23 000 jobs, respectively, in the period, while community and social services shed 8 000 jobs.
The agency said manufacturing had 4 000 fewer jobs and transport slashed 1 000 jobs from January to March.
Stats SA is to release its second quarter Quarterly Labour Force Survey next week, after it postponed the announcement last week.
Yesterday, the governor of the South African Reserve Bank, Lesetja Kganyago, told legislators it was difficult for the economy to create jobs in a shrinking situation, especially with business confidence at record lows. “Monetary policy cannot determine the long run growth potential in the economy. It affects growth, but it affects growth only in the cycles. It, therefore, goes that monetary policy cannot solve the problem of structural unemployment in the economy,” Kganyago said.