Independent Online

Friday, August 19, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Debate about who must create jobs in the country misses the point

Given Majola is a Business Report multimedia reporter. Photo: File

Given Majola is a Business Report multimedia reporter. Photo: File

Published Feb 22, 2022


According to Statistics South Africa, the local official unemployment rate reached a new record high of 34.9 percent in the third quarter of 2021.

The number of employed persons decreased by 660 000 to 14.3 million in that period. Unemployed persons decreased by 183 000 to 7.6 million compared to the second quarter of 2021. The number of discouraged job-seekers increased by 545 000, a whopping 16.4 percent, while the number of people who were not economically active for reasons other than discouragement increased by 443 000, or 3.3 percent, between the two quarters thereby resulting in a net increase of 988 000 in the not economically active population.

Story continues below Advertisement

If there is anything we should learn from the above data, it is that we should not be debating about who must create the much-needed employment opportunities South Africa needs, but rather discuss how do we create these jobs that will allow many more South Africans to participate meaningfully in the country’s economy.

When the unemployment rate according to the expanded definition of unemployment increases by 2.2 percentage points to 46.6 percent in quarter three of 2021 compared to quarter 2, 2021, it will not really help to ask any “who“ question.

We should rather ask how do we fix the labour environment which is unfortunately favourable to men than it is to the larger population of women. More men than women participated in the labour market as the labour force participation rate of men was higher than that of women.

The unemployment rate among men was lower at 32.9 percent compared to that among women at 37.3 percent in the third quarter of 2021, according to the official definition of unemployment. The official unemployment rate among black African women was 41.5 percent during this period compared to 9.9 percent among white women, 25.2 percent among Indian/Asian women and 29.1 percent among coloured women.

Here, we should ask how do we level the playing field for the country’s women even among their respective races. We ought to find out what barriers inhibit their employment and how we can get those out of the country’s ways. We ought to find out where the fall-traps are and design ways to eliminate them.

Employment decreased by 571 000 (5.6 percent) in the formal sector, by 65 000 (5.4 percent) in private households and by 32 000 (3.8 percent) in agriculture in the third quarter of 2021 compared to the second quarter of 2021. Even the informal sector employment increased by 9 000 (0.3 percent) in the same period.

Story continues below Advertisement

All industries experienced job losses between the second and third quarters of 2021 except the finance industry, which gained 138 000 jobs. The largest employment decrease was observed in trade (309 000), followed by community and social services (210 000).

The above data also directs us to ask how can all these jobs be restored and where not possible, how do we get those who lost their jobs economically active.

We can use a three-thronged approach to deal with the country’s high unemployment. Firstly, we can get those who lack skills to be skilled. Secondly, those who have skills that do not match the demand of the current economy should be re-skilled. And thirdly, those that do have the skills but find themselves without a job because the economy has not been growing, nor creating jobs can be further skilled and/or supported to be entrepreneurs.

Story continues below Advertisement

In an opinion article by Dr Justin Visagie, the South African Research Chairs Initiative (SARChI), and Professor Ivan Turok, SARChI Chair, in City-Region Economies, in the Department of Economics and Finance and the Centre for Development Support at the University of the Free State argued that South Africa should design economic policy based on strengths of regions.

“Economists and policy-makers seem to have a blind spot when thinking about how the economy functions and what determines success. Analytical frameworks and government policies consistently neglect the role of space and geography in favour of national averages and sectoral plans. Yet growing evidence from around the world shows the importance of place and location for productivity, growth and development,” reads the article.

They argued that it was obvious that economic progress depended on the quality of local skills, capable public institutions, reliable infrastructure, and proximity to markets and suppliers.

Story continues below Advertisement

I also think that for the country to solve its current unemployment crisis, it should come up with a bottom up approach that talks directly to communities’ needs.

As we head into the budget week and beyond, the only “who” who is important, is the one who is unemployed. The only debate that will change this current undesirable state of the country’s affairs is one that puts the one who is unemployed at the centre of our decision-making.

May all other “whos” prioritise the unemployed “whos”. May we all ask how do we make things better for them.

Given Majola is a Business Report multimedia reporter.