Unemployed men inJohannesburg wait on a street corner for work for part-time work. Photo: Naashon Zalk/Bloomberg/Getty Images
Nomsa Rapopo, 26, from Lenasia in the south of Johannesburg, qualified as a caregiver in 2018 but has not been able to secure a permanent job.
Her mother is a domestic worker and her two siblings have disabilities, so the pressure is on her to make ends meet.
“It’s frustrating. My job is to assist them with school, because we don’t have public schools for the disabled, only private schools. We need to pay some fees, buy clothes and food,” Rapopo said.
She is one of the 8.4 million people in South Africa without a job, according to a report released by Statistics South Africa on Tuesday.
The unemployment rate for the second quarter of 2024 rose to 33.5% — the highest in two years — from 32.9% previously, according to the statistics agency. During this period, the number of employed people decreased to 16.7 million while that of jobless people increased by 158 000 to 8.4 million.
Economists at Nedbank attributed the unemployment rate to more job losses and a bigger labour force, which increased by 137 000, or 0.3%, from April to June 2024 compared with the first quarter. But, they said ,this was unexpected given that load-shedding, which had previously hobbled business activity, had subsided and there were improvements in logistic services.
“The job losses were also unexpected in the build-up to the elections, which is usually associated with a rise in employment, albeit temporary,” Nedbank said.
The numbers are worrying and paint a bad picture of South Africa’s economic and political structures, political analyst Ralph Mathekga said.
“You ask yourself if the path that we have been on is really bringing results, or should we be stopping here? Your economy is structured in a way that you cannot absorb 30% of your employment,” he said, adding that the state of the job market right was a crisis for South Africa’s democracy.
“You have 30% of young people that are highly unemployed, highly agitated. It is going to impact the quality of your democracy. You are going to overstrain your democracy. Why? Because your democracy is going to be reduced to people just wanting to extract at the end.
“If your economy is not working well, it affects the productive capacity of the nation as well. It’s something that you don’t easily rebuild.”
He added that the unemployment data was even more concerning, given that the 33.5% does not include those who have stopped looking for jobs, and is therefore not a full reflection of the joblessness crisis.
According to the expanded definition of unemployment — which includes discouraged job seekers — the unemployment rate increased by 0.7 percentage points to 42.6% in the period April to June. Additionally, in the second quarter, 35.2% of the 10.3 million youth aged 15 to 24 did not have jobs, education or training.
“If you have these young people that are no longer interested and that are unemployed, what are you going to do? You’re going to pay the cost. We are already paying the cost, but it will be even more enormous,” Mathekga said.
Unemployment in South Africa has been worsened by structural constraints.
Casey Sprake, an investment analyst at Anchor Capital, said a persistent skills gap, labour market rigidities and the lingering effect of the Covid-19 pandemic had exacerbated joblessness, especially among young people. Limited access to quality education and training, as well as inadequate job creation had also contributed to the “concerningly” high rate of unemployment, she added.
“The persistent lack of jobs threatens to widen the inequality gap, undermining social stability and eroding the gains of recent economic advancements,” she said.
Similar to Rapopo, 37-year-old Lincoln Isaacs from Wynberg in Cape Town has been without a job for three years, despite having both qualifications and experience.
He is a software programmer and worked in human resources in Prague in the Czech Republic for five years. Isaacs had to come back to South Africa to take care of his sick parents at the end of 2021 and hasn’t been able to secure a proper job since.
“I’ve been struggling to get a job. I’m either overqualified and no one gets back to me — like I’ve done a lot of interviews, but nobody does back just to say I didn’t make it — or they don’t say why I didn’t make it, what I could improve on. And that’s been the struggle for the past three years,” he said.
Isaacs has to take care of his young daughter and parents, who have been in and out of hospital.
“It’s been tough. I had to rely on my older brothers to help out. I’m in a position where I can’t, you know, contribute financially. The best I can do is help us at home, but that doesn’t really pay the hospital bills.”
He is now applying for any job, because he is desperate.
Investec chief economist Annabel Bishop noted that South Africa’s weak economic growth in recent years was largely a factor of state capture and weak governance. She suggested that better management under the government of national unity (GNU) formed by President Cyril Ramaphosa after 29 May general elections might boost job creation.
“Better governance under the GNU, the eradication of corruption and infrastructure repair is expected to see faster growth and so lower unemployment over the next five years,” Bishop said.
Mathekga said the reality is bleak, and more is needed to boost confidence beyond just relying on the new government’s promises.
“The reality is that we have been here and it’s getting worse. South Africa’s economy is not transitioning. We have been left behind in many other areas. You just can’t keep on promising confidence. People need to see material changes, or at least an indication that there will be such changes, such types of shifts. So what will the GNU do? I mean, it’s beyond the GNU,” he said.
Maarten Ackerman, the chief economist at Citadel, said a key problem was that “the sectors where we have the ability to create more jobs to take up the skills that we have on the ground are in places like mining, manufacturing and construction. Those sectors are bleeding at the moment and are not providing any growth opportunity and that boils down to many other structural issues that have been talked about for a number of quarters already.”
The Stats SA report noted that during the second quarter, job losses were observed in trade (118 000), finance (24 000), construction (15 000), mining (10 000) and transport (1 000) industries, compared with the first quarter. But there were increases in manufacturing (41 000), community and social services (37 000) and utilities (8 000).
The agricultural sector lost 45 000 jobs in the second quarter and jobs in private households fell by 18 000.
Jobs in the informal sector increased by 48 000, driven by gains in the finance (15 000) and mining (13 000) industries.
Ackerman told the Mail & Guardian that structural issues with electricity, water and ports were contributing to the problem, and urged the government to remove these hurdles.
“To alleviate the issues they are faced with, (the government) can fast track the implementation of policies that can remove the final hurdles and structural issues that are preventing these sectors, mining and manufacturing specifically, from operating at full capacity. This will put them in a position to then start growing faster and creating more jobs,” he said.
Job creation will remain weak in 2024, with employment drifting sideways, Nedbank’s economists predicted.
“A more meaningful recovery is likely to occur next year as inflation dips towards 4.5% and the South African Reserve Bank reduces interest rates more significantly, creating space for faster growth in domestic demand and job creation,” the economists said.