How SA is changing: Work and earnings | Fin24
 
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How SA is changing: Work and earnings

Jan 31 2017 16:05
Marcia Klein

(iStock)

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All races are feeling the pain of increased unemployment – from 20% in 1994 to 27.1% by the third quarter of 2016. 

By actual numbers, this picture looks much worse, with Africans accounting for the vast majority of unemployed people in SA. According to Stats SA, there were 4.4m African people out of work in 2014, up from 1.6m in 1994. Unemployment among Coloureds increased from 260 000 to around 504 000, white unemployment from 42 000 to around 139 000 and Indian unemployment from 48 000 to 68 000. 

In 1994, 42.2% of the white population had skilled jobs (managers, professionals, technicians, etc.), compared with only 15.1% for Africans. Between 1994 and 2014 there was a general increase in the proportion of skilled employment for all population groups, according to Stats SA. However, progress differed vastly across race groups. 

The lowest increase took place within the African population, which saw an increase from 15.1% to only 17.9%; the highest occurred within the Indian/Asian population, which saw a jump from 25.2% to 50.7%. Skilled employment among white workers reached 61.5% in 2014 (up from 42.2% in 1994), while skilled employment within the Coloured population grew to 25.5% (up from 11.6%). 

Among people who have jobs, African progress has been most pronounced in the semi-skilled category (which includes jobs like clerks and salespeople). 

Using the broad definition of unemployment, which includes people who have given up on looking for work, in 2014, 42% of unemployed people had less than matric (1994: 40%), 34% a matric (1994: 28%) and 14% a tertiary qualification (1994: 6%). The unemployment rate for Africans with a tertiary education more than doubled from 8% to 19% over this period, according to Stats SA. “Not many would have predicted such an outcome for the post-apartheid period when access to the labour market, at least for those with skills, should have been much easier after so many decades of racial exclusion,” Stats SA said. 

Income and spending 

The lack of African and Coloured South Africans in skilled positions is a significant factor preventing individuals in these race groups from increasing income in absolute terms and alleviating the pressure on disposable income, the researchers found. 

Income levels remain highly skewed in favour of whites, which saw their disposable income by economically active person (EAP) increase by 21% between 1996 and 2013 to R203 808 (at constant 2005 prices). Indians saw the highest percentage increase, with income growing 45.9% to R118 971, while Coloureds saw income rise 13.4% to R44 316. For Africans, annual income per EAP decreased marginally, declining 1.7% from R38 817 in 1996 to R38?156 in 2013. 

On the upside, the middle class has grown significantly, with African middle class individuals increasing from 340 874 in 1993 to nearly 3m in 2012, according to the UCT Unilever Institute. Coloured, white and Indian middle-class individuals grew from 3.2m in 1993 to 4.25m by 2012. 

These changes can also be illustrated by changes in e.g. vehicle ownership – where Africans constituted 35% of households with at least one vehicle in 2004, this has increased to 54% by 2013, according to data from the Institute of Race Relations. All population groups have recorded an increase in medical aid membership between 2004 and 2014, with African membership showing the biggest increase (nearly 70% to 4.5m members). 

Of the 12m African households in 2013, 7m owned fully paid-off houses, according to Stats SA. This constitutes 84% of all the fully paid houses in the country. Whites owned 7.6% of fully paid houses. 

The researchers pointed out that the paid-off houses do not necessarily reflect the value of the property, and that data around bonded houses should also be taken into account to determine access to finance and better quality housing.  

Based on the available data, 479 000 African households were busy paying off their houses to a bank, compared with 419 000 white households. “The lower percentage African households in houses not fully paid are likely an indicator that other race groups are able to access finance that allows them to buy larger homes,” the researchers pointed out.

 

For the full research report by Alternative Prosperity, click hereVisit the company's website here

This is a shortened version of the cover story that originally appeared in the 2 February edition of finweek. Buy and download the magazine here.

unemployment  |  south africa  |  household debt
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