The number of discouraged work-seekers rose by a million between March and September last year, while employers continued to pay higher wages to a falling number of employees, according to two surveys released by Statistics South Africa (Stats SA) last week.
This indicates that unemployment in South Africa has at best remained static, at worst risen slightly.
The joblessness figures, combined with the increased quantum of wages paid to those in employment, is also likely to fuel complaints that the formally employed are a labour elite whose economic position is improving to the detriment of the jobless.
Stats SA’s labour survey and the Survey on Employment and Earnings (SEE) show that the official rate of employment fell from 31,2 % in March last year to 28,2% in September last year.
However, the actual number of employed people over the period remained static at 11,6-million. The percentage fall is because of the number of people who have dropped out of the economically active population by no longer looking for a job.
Because discouraged work-seekers are not included in the official definition of unemployment, the number of unemployed people in the formal non-agricultural sector fell from 5,3-million to 4,6-million people over the period.
About a million discouraged work-seekers increased the pool of economically inactive people from 12,7-million to 13,7-million. There are currently 11,6-million employed people in South Africa, implying an economically active population of 16,2-million.
Reacting to the figures, an economic trends analyst, who declined to be named, emphasised the critical need for an improvement in South Africa’s skills base. He also noted that, while the government’s public works programme would provide relief, this would only be temporary.
According to the SEE, the number of employees declined between September 2002 and September 2003, while employee remuneration increased over the same period. In that year, the number of formal-sector employees fell by 2,2%, while gross earnings rose by 5,9%.
Many economists expect wage settlements to peak this year, tailing off in the years that follow.
Neva Makgetla, an economist with the Congress of South African Trade Unions, rejected wage restraint. “South Africa has one of the worst inequality rates in the world, based on salary structure,” she said. Workers could not be expected to settle for inflation-related increases while some wanted their salaries judged against their peers in Europe. “In any normal economy, workers have to have real increases in their wages,” Makgetla said.
According to the Andrew Levy’s Wage Settlement Survey, quoted in the Reserve Bank’s Quarterly Bulletin this week, the average level of wage settlements in 2003 rose by 8,9% from 8% in 2002.
The Deloitte Salary Movements and Labour Trends shows that companies expect basic salary increases to range between 5,3% and 9,3% between February and July this year. The Reserve Bank Quarterly Bulletin noted an improvement in productivity, but raised concerns about increases in unit labour costs.
The fall in employment in the non-agricultural formal sector led to a rise in real output per worker. Output increased by 3,2% in the second quarter of 2003, compared with the same period a year earlier.
The Reserve Bank also noted that the unit cost of labour rose 6,4%, marginally above the Bank’s inflation target. In the manufacturing sector, the decline in production due to the strong rand, plus a slight increase in employment, led to a sharp fall in productivity. Unit labour costs rose from 2,5% in late 2002 to 11,7% towards the middle of last year.
Additional reporting by I-Net Bridge