‘Joblessness set to remain high for years’ – experts warn

There just seems to be no end to South Africa’s increasing unemployment rate.

Statistics South Africa (Stats SA) this week announced the official unemployment rate grew from 32.1% to 32.9% in the first quarter of 2024.

Weak economy and seasonal factors explained negative trend

Economic expert Raymond Parsons from North-West University Business School said the statistics indicated a weak economy and seasonal factors explained the recent negative trend.

“With SA’s GDP [gross domestic product] growth forecast to only be about 1% in 2024 and a little more next year, it is likely the overall unemployment level will remain unacceptably high in the foreseeable future,” he said.

“However, we must be careful not to draw specific conclusions around sectoral trends in employment trend from just one quarterly survey.

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“The overall unemployment picture is sufficiently negative to explain why all the major political parties have put the need for SA to get much higher job-rich growth high on their election manifestos,” Parsons said.

More economic activity due to Christmas

Professor of economics at Stellenbosch University Rulof Burger said there was more economic activity seen in the last quarter of the year, due to Christmas.

“Comparing quarter four of 2023 to quarter one of 2024 is incomparable. I think it’s better to compare what things look like this year, in this quarter, to what things looked like last year in the first quarter,” he said.

“What I’m seeing, is the unemployment rate is exactly the same now as it was in the first quarter of last year, which is very high.

“The reality is not much has changed from last year, so the unemployment rate has changed because the economy fundamentally hasn’t changed now. And that means the unemployment rate is not coming down,” Burger said.

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Economy gone from stagnant state into downward spiral

The General Industry Workers Union of SA (Giwusa) said in this quarter, 330 000 people lost their jobs, which confirmed the economy had gone from a stagnant state into a downward spiral.

Giwusa president Mametlwe Sebei said the report showed the economy had not seen any improvement in comparison to the first and last quarters of 2023.

“The economy has degenerated from a long-term stagnation which has included occasional and modest increases in employment and growth, both of which are easily nullified by declines which follow and stands on the edge of a capitalist cliff,” he said.

The Congress of SA Trade Unions said though it was not unusual for the first quarter of the year – which normally followed a seasonal increase in jobs over the festive holidays and retail peak period during the fourth quarter of the year – it was nonetheless disappointing.