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Tuesday, August 16, 2022

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Government remains SA’s biggest employer



Published Jul 30, 2015


Johannesburg - The government continues to be the employer of last resort since the 2008/09 recession, despite the freezing of the number of state employees and limiting public sector wage increases amid concerns from credit rating agencies.

The Quarterly Labour Force Survey (QLFS) released yesterday shows unemployment moderated to 25 percent in the second quarter from 26.4 percent in the previous quarter.

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Total employment increased by 198 000 in the period and by 563 000 over the 12-month period. The expanded definition of unemployment, which includes people who have stopped looking for work, also eased to 34.9 percent from 36.1 percent.

The rand firmed for a third consecutive session against the dollar yesterday as investors bet that the US Federal Reserve might issue a dovish policy statement, boosting the appeal of high-yielding emerging market assets.

With investors focused on the Fed, the rand barely moved after data showed that unemployment eased slightly.

At 5m, the rand was trading at R12.4979 to the dollar, a 0.49 percent gain over Tuesday’s New York close.

The QLFS, which polls households, found 15.7 million were employed, 5.2 million unemployed and 15.1 million “not economically active”.

The formal sector accounted for the largest share of employment at 69.2 percent, while agriculture accounted for the lowest share (5.6 percent).

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Employment growth was largely supported by a rise of 177 000 jobs in the informal sector on a quarterly basis.

Large quarterly gains were in the public sector (98 000), construction (79 000) and trade (73 000) industries.

The DA said it had written to the Speaker of the National Assembly, Baleka Mbete, requesting a debate on the job crisis and its possible solutions.

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David Maynier, the DA spokesman on labour, said that 5.2 million people could not find a job was staggering, “especially if we consider that for every person who loses their job, about four people depend on them”. “The fact that 5.2 million people don’t have a job cannot be explained by external factors alone, and has as much to do with the government’s disastrous economic policy, which is killing investment, economic growth and jobs in South Africa.”

Kevin Lings, the chief economist at Stanlib, said the numbers in the QLFS were in sharp contrast with the Quarterly Employment Survey, which indicated South Africa had lost 44 000 formal sector jobs in the first quarter and that formal sector employment had declined by 43 000 jobs over the past year.

However, the QLFS does indicate that 50 percent of the jobs created over the past year were in the agricultural sector and that a further 35 percent were in the informal sector.

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“On the whole, informal sector jobs as well as agricultural employment are paid significantly less than the equivalent number of people employed in the formal sector. In other words, if South Africa had created 530 000 jobs over the past year in the formal sector, then the economy would be booming and not slowing as a broad range of economic data currently suggests.”

Kamilla Kaplan, an economist at Investec, said since the 2008/09 recession, the government had been the largest employer, adding 700 000 jobs, while the manufacturing sector shed jobs and employment levels in agriculture and mining sectors had been stagnant.

Employment levels in the private sector have not increased substantially since 2008 as operating conditions became challenging.

* Additional reporting by Reuters

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