Johannesburg - Unemployment in South Africa rose to a record 27.1 percent high in the third quarter - the highest in 13 years - despite some rise in the number of employed.
Statistics SA said yesterday that the joblessness rate rose from the 26.6 percent in the second quarter.
The agency said both total employment and the number of unemployed rose, helped by a decline in the number of discouraged work seekers.
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It said the economy had grown slowly over the past six years, making it hard to recoup the 1 million jobs lost during the 2008/09 recession.
“This marks the highest unemployment rate since the survey was introduced in 2008 and exceeds the average unemployment rate of 25 percent in the aftermath of the 2008/09 recession,” said Kamilla Kaplan, an economist at Investec.
South Africa has the highest jobless rate of more than 60 emerging and developed countries.
Labour market
Yet despite the gloomy figures, the rand held its ground, propped mainly up by firmer metal prices, which boosted commodity currencies.
South Africa this week also tabled proposals to stabilise the labour market by introducing a national minimum wage of R3 500 and curtailing strike action.
The move has, however, received mixed reviews from key stakeholders in the economy.
Ratings agencies are scheduled to decide whether to downgrade the nation's credit rating in the next two weeks.
Moody’s Investors Service and S&P Global Ratings have cited labour upheaval, strikes and laws that discourage companies from hiring as potential risk factors to the country's rating.
South Africa is ranked at the lowest investment grade level by S&P, while Moody’s rates its debt one level higher.
The industry breakdown shows the largest annual gains in employment levels in the third quarter to have been in the finance, construction and transport industries: 163 000, 31 000 and 17 000, respectively.
The manufacturing sector, followed by the government sector, registered the largest job losses of 91 000 and 83 000, respectively.
Employment levels also decreased in the agriculture (16 000), utilities (9 000), mining (8 000) and trade (2 000) sectors.
The expanded definition of unemployment, which includes people who have stopped looking for work, was slightly lower at 36.3percent in the third quarter, from 36.4 percent in the second quarter.
Kaplan said: “Lower employment levels in industry and the consumptive sectors are reflective of the subdued economic growth climate, with GDP (gross domestic product) growth forecast at 0.3 percent year on year in 2016. Labour market conditions are likely to remain poor in the period ahead, with GDP growth projected to rise only to 2.2 percent year on year by 2020.”
In February, the World Bank said the South African economy needed to expand at 7.2 percent a year from 2018 to achieve the government's goal of reducing the joblessness rate to 6 percent by 2030.
Trade union federation Cosatu said: “We are not surprised by this report because we have long argued that the unemployment problem in South Africa will not be addressed if the flawed structure of the South African economy is left intact.”
Cosatu said it had been often argued that jobs would be created in the small business sector in South Africa. “However, due to the legacy of concentration and domination of the South African economy by a few monopolies, there is little space for South African small firms to succeed and create jobs for the 9 million unemployed workers in a short space of time,” the federation said.
“This is in addition to high administered prices such electricity, transport costs, non-availability of cheap finance and contractionary macroeconomic policies which stifle the impact of industrial policy.”
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