People gather outside the Bishop Lavis Post Office for the Special Covid-19 Social Relief of Distress grant of R350 per month. The grant is for those who are unemployed and do not receive any other social grant or Unemployment Insurance Fund payment. Picture Leon Lestrade. African News Agency/ANA.
People gather outside the Bishop Lavis Post Office for the Special Covid-19 Social Relief of Distress grant of R350 per month. The grant is for those who are unemployed and do not receive any other social grant or Unemployment Insurance Fund payment. Picture Leon Lestrade. African News Agency/ANA.

Durban's low unemployment statistics flicker of hope behind national grim unemployment statistics

By Sibusiso Mboto Time of article published Sep 2, 2021

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DURBAN - DURBAN’S low unemployment rate when compared to that of other big cities in South Africa means that the coastal city will continue to draw job seekers who feel that they stand a good chance of getting employed there.

This is the silver lining from the grim figures released by Stats SA last week which showed that the jobless rate had increased by 1.8 percentage points to 34.4% in the second quarter, compared with 32.6% in the previous quarter.

Economist and academic Professor Irrshad Kaseeram said while the numbers confirmed the suspicion of many, there was still room for optimism from last week’s figures.

“The labour force participation rate is the proportion of the working-age population that is either working or actively looking for work. KZN features poorly with only 49%, while Gauteng and Cape Province are 66.9% and 63.1%, respectively. KZN is only ahead of Northern Cape (43.6%) and Limpopo (46.6%),” Kaseeram noted.

He pointed out that the unemployment rate in eThekwini was 26% behind Mangaung (Free State) which was the lowest at 23%, while the other large capital cities had fared worse with Joburg at 37.3%, Ekurhuleni 33.1% and in the Eastern Cape, Buffalo City and Nelson Mandela Bay at 32% and 39.8% respectively.

“However, the unemployment rate is higher in the non-metro areas of KZN at 36.8%. This is mid-range compared to those of the Eastern Cape at 53% and Limpopo at 30.4%. The favourable employment rate in eThekwini implies that over time more people will migrate to this coastal metro,” Kaseeram said.

According to Kaseeram, the government should take advice from the World Bank on possible solutions to boost economies, which include reducing the cost of hiring and dismissing a worker, training the young to engage in entrepreneurial activities and offering firms tax incentives to employ and train the youth in the workplace.

Another economist Professor Bonke Dumisa said it was important for the government to demonstrate a commitment to fighting corruption and other inefficiencies in order to attract investment, because failure to do this would bring further harm to the country’s already fragile economy.

Dumisa said last week’s figures should not come as a shock when considering how Covid-19 had seen the country’s economy almost grinding to a halt.

“In fact, the next figures are likely to be worse than these when factoring the impact of the riots that we saw in July, because the impact of that is that some businesses are still battling to restart their operations. So not to sound alarmist, but the worst is yet to come,” he said.

Part of the problem, said Dumisa, was the education system that was at loggerheads with the country’s economic needs. He emphasised the need to invest in education, with focus on technical skills.

Dumisa noted the attempts by the Gauteng Education Department to bring technology to schools through the use of tablets, and how the efforts were thwarted when the tablets were stolen.

“It can’t be that in this day and age you have learners who do not know how to operate a computer, many developing countries empower young people at lower primary school level on how to use technology.”

Pietermaritzburg and Midlands

Chamber of Business (PMCB) chief executive Melanie Venness said the figures were unacceptable, as they meant that a significant number of people went to bed hungry.

“We have to do better. It’s not acceptable to have this level of unemployment, nor to have half our youth unemployed. Unfortunately the recessionary conditions prior to the pandemic made recovery from the pandemic-related lockdowns near impossible,” said Venness.

She said businesses had been decimated by the recent unrest and its effect on investor confidence.

“We need to eradicate corruption, ensure service delivery at a local level and create an enabling environment for business to operate in. We need assurances that we can be confident that we won’t face a repeat of what happened and we need to see people being held accountable for their treasonous behaviour,” she said.

The Durban Chamber of Commerce and Industry said it had noted the increase in the official unemployment rate to 34.4% in the second quarter of 2021, adding that this was deeply concerning. “We believe this impact will be felt across all economic sectors because of reduced spend and demand. Following the recent unrest, we can expect a further rise,” said chief executive Palesa Phili.

She called on the government to work closely with the private sector to ensure businesses, especially small, micro and medium enterprises, were able to sustain their operations during these challenging times.

Phili said the small business sector needed to be prioritised in terms of relief mechanisms to eliminate further shedding of jobs, warning that if the sector remained weak in South Africa, the SMME industry would be less capable of creating jobs.

THE MERCURY

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