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Jobs - not grants - only way out of poverty, says Pali Lehohla

Aug 07 2017 11:58
Liesl Peyper

Cape Town – Poverty and unemployment are two sides of the same coin and people will only escape the poverty trap if they find work and become productive, said statistician general Pali Lehohla on Monday.

He presented South Africa’s unemployment figures for the second quarter of 2017 in Pretoria, which showed that the jobless rate in the country has remained sticky at 27.7% - the highest level since September 2003. 

Employment over the period declined by 113 000 to about 16.1 million people, but because the number of job seekers also declined by 37 000 the rate of unemployment stayed the same.

Lehohla explained that the rate stays stagnant when the relationship between the employment numbers and the number of people looking for jobs stays the same, as is the case with the latest Quarterly Labour Force Survey.

The quarterly employment decline of 113 000 is attributed to six of South Africa’s ten economic sectors and the largest drops in employment were recorded in construction (-110 000) and agriculture (-40 000).

The mining industry shed 13 000 jobs in the second quarter of 2017 and the transport sector saw job losses of 11 000.

The largest employment gains were recorded in the finance sector, with 175 000 jobs and trade at 129 000 jobs.

The manufacturing sector showed employment growth of 88 000 jobs.

Lehohla said it’s an established fact that in a low to zero-growth economic environment, one can’t expect the economy to create employment. “But we can’t say what will happen in the future – we will have to see when we get there.”

South Africa entered a technical recession in June this year when the economy contracted for two consecutive quarters with negative growth of 0.7% during the first quarter of 2017 preceded by 0.3% negative growth in the fourth quarter of 2016.

Lehohla said South Africa’s poverty and unemployment figures are telling “the same story”.

Although the poverty numbers released at the end of May 2017 showed that the percentage of South African households with inadequate or severely inadequate access to food decreased from 23.9% in 2010 to 22.3% in 2016, poverty remains at a stubborn level.

“And poverty can’t be resolved by social grants,” he said, “but only when people are productive and working. We’re in a very precarious situation in South Africa. People will only be able to fend for themselves if they’re working.”

According to Statistics South Africa’s latest general household survey, the percentage of individuals that benefited from social grants consistently increased from 12.7% in 2003 to 29.7% in 2016.

More than one-third of individuals in Eastern Cape (40.8%), Limpopo (37.6%), Northern Cape (37.1%) and KwaZulu-Natal (36%) were grant beneficiaries, compared to 16.9% in Gauteng and 22% in the Western Cape.

The latest unemployment figures showed the largest quarterly increase in the unemployment rate was recorded in the Eastern Cape at 5.8 percentage points, followed by Mpumalanga at 3.5 percentage points. 

The Western Cape and North West were the only provinces that saw declines in the unemployment rate. 

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