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Only 4 in 10 people of working age have a job – report

Aug 21 2017 16:18
Liesl Peyper

Cape Town – Only 43.3% of South Africans of working age are employed, says Gabriela Mackay, employment analyst at the Institute for Race Relations (IRR).

“This figure is lowest for black South Africans with only a 40.4% absorption rate in the labour market. These figures are low, especially when compared with similar economies,” according to Mackay.

The labour market absorption rate measures the proportion of people of working age who are employed and is a gauge to measure the health of labour markets in various economies.

Mackay says South Africa’s labour market absorption rate depends largely on a person’s level of education. “For example, the absorption rate for people with a tertiary education is 75.6%, while it is 50.3% for those with matric as their highest level of education."

According to the latest quarterly labour force statistics released by Statistics South Africa on August 8, unemployment is 27.7% for the second quarter in a row - the highest level since the data series started in 2008. 

Fin24 earlier reported that the expanded definition of unemployment was recorded at 36.6%, up from 36.4% in the first quarter of 2017.

The unemployment rate for the youth younger than 25, using the expanded definition currently stands at 67.4%.

Using Statistics South Africa data the IRR found that:

- The number of unemployed people (according to the expanded definition, which includes discouraged work seekers) has increased from 3.7 million in 1994 to 9.3 million in 2017.

- Of the 9.3 million unemployed people, 6 million are under the age of 35 and young people show far higher rates of unemployment than older people. 

- Of the 9.3 million unemployed people, 8.3 million are black and the unemployment rate for black people is between 4 to 5 times higher than that of white people.

“We estimate that reducing South Africa’s unemployment to international norms will require doubling the number of people with a job over the next decade,” Mackay says, “which will require sustainable growth rates in excess of 6% of GDP.”

She points out, like South African Reserve Bank governor Lesetja Kganyago earlier, that there will be limited job creation at the current rate of economic growth.

At a parliamentary briefing in August, Kganyago said although it is possible to have jobless growth, it is not possible to create employment in a contracting economy.

“Quite possibly, [there will be] job shedding across several industries. This will worsen the unemployment crisis and the political tensions that flow from South Africa’s high unemployment rate,” Mackay says.     

In June this year, South Africa entered a technical recession after GDP figures were in the red for a second quarter in a row.

GDP contracted 0.7% for the first quarter of 2017, after a decline of  0.3% in the fourth quarter of 2016. In 2016, the economy grew only 0.3% for the year.

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