Job seekers' prospects worsen as the army of unemployed swells
Economy / 30 October 2019, 08:00am / Siphelele Dludla
JOHANNESBURG – The prospects of securing a job in South Africa have become even bleaker for semi-skilled and unskilled workers, as almost 7 million people were out of employment in the three months to September.
South Africa has one of the highest unemployment rates in the world.
The Quarterly Labour Force Survey released by Statistics SA (StatsSA) yesterday showed that unemployment increased by 0.1 of a percentage point from 29 percent to 29.1 percent from July to September. This was the highest jobless reading since 2003, and the country now has the joint fourth-highest unemployment rate out of 182 countries tracked by Trading Economics.
StatsSA said the number of discouraged work seekers increased by 44 000. The number of those who were not active in the labour market for other reasons other than discouragement declined by 35 000, resulting in a net increase of 9 000 in the number of people who were not economically active.
Unemployment among youth, aged 15 to 24, continued to edge up on a quarterly basis, reaching 58.2 percent in the third quarter, up from 56.4 percent in the second quarter.
Statistician-general Risenga Maluleke said the expanded unemployment rate increased to 38.5 percent due to at least 10.3 million people who were not working.
The latest employment data comes almost a year after the government’s Jobs Summit and 14 months after the release of President Cyril Ramaphosa’s economic stimulus and recovery plan.
PricewaterhoseCoopers' Strategy, in an economic commentary yesterday, said that it was clear that neither endeavour has had a real positive impact on the country’s employment creation.
“The country’s 6.7 million unemployed and 2.8 million discouraged workers are left with few answers as to how the situation will be turned around,” it said.
“The lack of required skills is a massive issue for the country. 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.”
StatsSA said the number of employed increased by 62 000 to 16.4 million, while the number of unemployed increased by 78 000 to 6.7 million, resulting in an increase of 141 000 in the labour force.
The mining sector recorded a net gain of 38 000 jobs on a quarter-on-quarter basis, while also gaining a total of 1 000 jobs year-on-year.
Most jobs losses were recorded in the tertiary and secondary sectors in three months to September.
The informal sector shed 53 000 jobs during this period.
Investec economist Lara Hodes said weak economic growth was at the centre of rising unemployment.
“The hastened implementation of key reforms is needed to boost the depressed confidence levels, which continue to plague businesses and investors, hindering growth,” Hodes said. “Lacklustre economic growth, which is not projected to exceed 2 percent over the medium term, underpinned by structural inefficiencies and policy uncertainty is fuelling the country’s mounting unemployment predicament.”
The broader manufacturing sector recorded employment losses of 30 000 jobs during the third quarter, while construction and trade shed 24 000 and 21 000, respectively.
Marique Kruger, an economist at the Steel and Engineering Industries Federation of Southern Africa (Seifsa), said the efforts aimed at easing unemployment were not bearing fruit and more time was needed for initiatives aimed at creating sustainable employment to become more effective.
“The increase in unemployment numbers is concerning, especially as the unemployment dilemma continues to be difficult for policymakers and captains of industry to deal with,” Kruger said.
“Despite ample political will and willingness by key stakeholders to collaborate in finding sustainable solutions to the scourge of unemployment, there has been little progress made hitherto.”
Kruger said Seifsa remained confident that identified interventions aimed at attracting investment would invariably stabilise employment in the medium to long term against the backdrop of recent moderate job gains.