Business

Employment down for first quarter of 2014

Thalia Holmes

Overall unemployment has increased to 25.2% in the first quarter of this year, according to a Stats SA report.

With consumers under increasing pressure, private households shed 14 000 jobs over the quarter. (Gallo)

Just two days before South Africa takes to the ballot boxes, the latest Quarterly Labour Force Survey (QLFS) has been released, and it is not good news for the ANC.

Overall unemployment in the country has increased by 1.1 percentage points to 25.2% in the first quarter of this year. 

According to Kevin Lings, chief economist at Stanlib, the expanded definition of employment – which includes all those who desire employment regardless of whether they are actively seeking it – is at 35.1%, up from 34% in the fourth quarter of 2013.

Employment has decreased by 122 000, and the number of unemployed people increased by 237 000 over the same period. According to Statistics South Africa, which released the report, this was “the largest decrease observed in the past three years”, when one compares the similar periods for the first quarter from 2011 to 2014.

The number of discouraged jobseekers has also risen by 154 000 people.

The survey samples about 30 000 dwellings in which households reside, and aims to give a feel for the total employment in the country, including the informal sector, private households, agriculture and small businesses.

The large number of job losses is mainly due to a decrease of 110 000 jobs in the informal sector, said Stats SA. With consumers under increasing pressure, private households shed 14 000 jobs over the quarter. The number of jobs in the agricultural sector also declined by 5 000. The formal sector actually increased by 7 000 jobs over the period, but this was not sufficient to offset the losses in other areas.

When comparing growth trends over the past few years, there has nevertheless been “stable employment growth” since the first quarter of 2011, said the report. Initially sluggish growth picked up its pace in 2013, before slowing again over the past six months.

“Employment increased exponentially in the first three quarters of 2013,” noted the report. However, the rate of increase declined in the last quarter of the year, albeit a less marked drop than the one experienced this most recent quarter.

“Today’s figures provide further evidence that local economic performance is still well below potential,” said Nedbank in a note soon after the release.

The bank predicts that the unemployment rate will remain a key concern. “The unemployment rate is likely to remain high in the short term given weak domestic demand, rising input costs, labour disputes, significant infrastructure constraints and other regulatory issues in some of the key sectors,” it said.

Employment per province
Employment declined in five of South Africa’s nine provinces: Limpopo, Gauteng, Mpumalanga, the Free State and the Northern Cape. The number of people employed in the Eastern Cape and Kwa-Zulu Natal remained the same.

Only two provinces saw an uptick in employment – the Western Cape and the North West, which each added 1 000 jobs.

Both provinces are hotly contested political spaces. The Western Cape saw official opposition party the Democratic Alliance take 51% of the vote in 2009.

In its pre-election rhetoric, the ANC has repeatedly vowed to “take back” the province, and the DA is equally determined to hold on to its majority.

In the North West, the ANC received 74% of the votes in the last elections. But the province is home to the embattled platinum belt, where striking miners have become increasingly vocal about their disapproval of the ruling party since the 2012 Marikana tragedy.

It is also a stronghold of Julius Malema-led Economic Freedom Fighters (EFF), which is working hard to tap into the disgruntled unemployed youth electorate in that area.

Youth jobs
According to Lings, using the expanded definition of unemployment, the rate for the youth (those younger than 25) is “at an incredible 66%.”

“Youth continue to be vulnerable in the labour market,” said Stats SA in its presentation of the survey.” Although their level of educational attainment has improved over the period 2008 to 2014, their labour market situation deteriorated markedly during the recession.”

And their conditions of employment currently reflect this, said Stats SA. “Young people who are employed are more likely to be employed in precarious conditions; for example 20.7% of employed youth are on contracts of a limited duration compared to 10.8% of employed adults.”

Lings said: “Overall, South Africa’s unemployment rate remains exceedingly high by global standards. Furthermore, the high rate of unemployment clearly contributes to much of the social tension and anguish experienced in South Africa on a daily basis, especially among the youth. Increasing employment in South Africa has to be the number one economic, political and social objective.”


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