Cape Town - Unemployment remains "stubbornly" high, Finance Minister Pravin Gordhan said on Wednesday.
In his mini budget, tabled in parliament, he said employment increased by 274 229 jobs in the year to July, according to the Quarterly Labour Force Survey.
This included estimates of hiring in agriculture and the informal sector.
Growth in the formal non-agricultural sector, however, remained muted as gains in the public and financial sectors were offset by employment losses in mining, manufacturing, and construction.
"The growth in private-sector employment is far below the rate required to absorb new entrants into the labour market and reduce the unemployment rate."
Settlements in the first half of 2013 raised wages by 7.9% on average, up from 7.6%in 2012.
Real wage growth exceeded productivity growth, leading to a 6.7% increase in unit labour costs in the first quarter of 2013, relative to the same period in 2012.
"Unemployment remains stubbornly high, in particular for those between the ages of 19 and 29.
"Government has a multi-pronged approach to promoting economic participation and job creation.
"Improving education and skills development is the central challenge."
Initiatives were under way to strengthen further education colleges, expand access to student finance, and refocus the activities of sector education authorities and the National Skills Fund.
Tax allowances for learnerships aimed to increase skills levels.
The Industrial Policy Action Plan, the proposed framework for special economic zones and tourism promotion efforts aimed to boost employment and income generation.
The expanded public works programme continued to prioritise young people and women - and more than 60% of jobs created last year were filled by youths, well above the 40% target.
The Jobs Fund had approved allocations of R3.4bn to some 64 projects, expected to create over 90 000 permanent jobs and about 100 000 training opportunities over the period ahead.
An employment incentive proposal had been tabled to encourage youth employment and share the costs of job creation in special economic zones and targeted industries.
This measure was expected to support about 200 000 jobs over the next three years.