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Lehohla: Govt policy fails to solve unemployment

May 09 2016 14:54
Liesl Peyper

Cape Town - The South African government is not doing enough to address unemployment in the country, said Pali Lehohla, statistician general of Statistics South Africa.

Government policy has not been successful in solving unemployment, he said. “If it has, we would have seen the demographic dividend,” he said. “Government will have done enough when you see a change in the unemployment trend. There is no indication of a turning point and the current economic climate is not helping.”

Addressing the media on the Quarterly Labour Force Survey in Pretoria, Lehohla said South Africa needed to create jobs at a similar rate to which the labour force is growing, while the country generally needs a more skillful labour force.

South Africa’s official unemployment rate, for the first quarter of 2016, stands at 26.7%, representing a 2.2 percentage point increase compared to the last quarter of 2015. This means 5.7 million out South Africa’s 36.4 million people of working age in the country were unemployed during the first four months of 2016.
 
The expanded unemployment rate, which includes discouraged job seekers, amounts to 36.3%, or 8.9 million people. The gap between the official and expanded unemployment rates increased from 7.2% in the fourth quarter of 2008 to 9.6% in the first quarter of 9.6% in the first quarter of 2016.

Lehohla pointed out that unemployment usually increases from any fourth quarter to the first quarter of a new year. “But this particular quarter showed the highest peak since 2008.”

A total of 355 000 jobs were shed across the formal and informal sectors of the economy. Employment in the manufacturing sector fell by 100 000 quarter on quarter, which was mainly driven by a decline in the manufacturing of structural metal products, furniture and the production of food.

Losing jobs in the 'real economy'

“When you lose jobs in manufacturing, we are losing real jobs because that’s the ‘real economy’,” Lehohla said.

Young people continue to be the most vulnerable among unemployed people in South Africa. Only 31.1% of youth are employed and skill levels among the youth remain low. A total of 47.5% of the youth labour force did not complete secondary education and only 13.8% have a tertiary qualification.

In the first quarter of 2016 the percentage of youth not in employment or education and training amounted to 33%, with three out of every five young people in this category having an education level below matric.

Lehohla said whites and Indians in South Africa enjoy higher rates of employment than black people. “Black and coloured people continue to miss out on the demographic dividends in South Africa,” Lehohla said.

“They should be driving the demographic dividend, but they have unfavourable labour market outcomes.”

At 30.1% the black African population has the highest unemployment and lowest absorption rate in South Africa.

David Maynier, DA spokesperson on finance said in a statement it was “staggering” that 355 000 people lost their jobs in the first quarter of 2016. “Especially when one considers that for every person who loses their job, approximately four people depend on them.”

Unemployment in South Africa cannot be blamed on external factors only, Maynier added. “It has much to do with the failure of government to implement the structural reforms necessary to boost economic growth and create jobs in South Africa.”

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