No light at the end of SA’s unemployment tunnel

Blame whoever and whatever you want – be it government’s socialist-leaning policies, racism, BEE, colonialism, China, electricity shortages, crime, failing state-owned entities, greedy politicians, African immigrants, corruption, neo-liberal capitalism, the education system, white monopoly capital, the banking industry, snowflake millennials, the mining charter, Donald Trump or society – the latest unemployment figures from Statistics SA point towards a disaster.

The statisticians conclude that the unemployment rate in SA is still climbing and that according to the Quarterly Labour Force Survey (QLFS) has reached the highest level since the introduction of the survey in 2008.

It’s bad. Really bad

The official unemployment rate increased to 32.6% in the first quarter of 2021, while the unemployment rate based on the expanded definition of unemployment increased to 42.3%.

Thus, nearly half of all citizens of working age in SA are unemployed.

The figures show that the problem is getting bigger as SA’s largely young population reaches working age, with few new job opportunities.

According to the QLFS, SA’s population of people aged between 15 and 65 has increased by around 600 000 people in the past year, to 39.46 million. More than 17.2 million are classified as not economically active, with most still at school or attending an institution of tertiary education.

That’s nearly two million more scholars and students than a year ago who will enter the labour market soon.

Meanwhile, the number of job opportunities in the formal, informal and agricultural sectors, as well as within households, decreased by more than one million compared to a year ago.

Just less than 16 million people were classified as employed, compared to 16.4 million a year ago, according to the report.

Ups, but mostly downs

The largest employment decreases were observed in private households (a loss of 70 000 jobs), followed by the informal sector (19 000), and the agricultural sector (18 000) in the first quarter of the year compared to the preceding quarter.

Employment increases were only observed in the formal sector (79 000 quarter-on-quarter), but the formal non-agricultural sector lost 700 000 jobs compared to a year ago.

The construction, trade and transport industries continue to lose jobs, with the data also showing alarming trends in differences between age groups and according to gender and race.

The Stats SA figures show that there are 10 million people between the ages of 15 to 24, of whom two million are part of the labour force, either being employed or seeking work. There is not a lot of work for these (mostly first-time) work seekers. The unemployment rate in the age group exceeds 63%.

Pays to be older and more experienced

A bit of experience and a qualification make a difference.

The unemployment rate for people aged between 25 and 34 is lower at 41.3%, but still extremely high. People at the end of their working lives, 55 to 64 years of age, are the most likely to have jobs, with an unemployment rate of only 20%.

The age groups up to 34 years show a decline in the actual number of workers, while the age group 35 to 44 years show an increase in the actual number of working people.

If anything, the age groupings are damning evidence that the education system has been producing candidates who are not equipped for the workplace.

Skills help. The unemployment rate among people who did not finish matric increased from below 30% in 2013 to more than 38% in the first quarter of 2021.

Stark numbers

Some 34% of matriculants are unemployed, while the unemployment rate for graduates is a much lower 9.6%. But that is also much higher than in 2013 when the unemployment rate among graduates was less than 5.5%.

The figures also have racial and gender undertones, with black women the most likely to be unemployed (38.5%), followed by black men (34.9%), according to a presentation of the survey results. White females are most likely to be employed. The Stats SA figures show unemployment among white females at only 8.1%.

The expanded unemployment figures, which include discouraged work seekers, show an even bigger difference between race groups. Here, 51% of black women who would like to work are unemployed.

In short, SA faces a huge problem of growing unemployment among millions of young (mostly black) people, which is bound to become a political and social problem.

Only 15 million employed people cannot produce enough and pay enough tax to ensure a decent quality of life for a population of 59 million, and growing.

• This article originally appeared on Moneyweb, and has been republished with permission.