President Thabo Mbeki’s questioning of employment statistics is not in any way denialism, but rather an “explanation-seeking necessary interrogation”, says Haroon Bhorat, director of the Development Policy Research Unit at the University of Cape Town.
More importantly, as Mbeki concedes, the questioning should not distract from the serious lack of formal, quality employment.
Whatever the correct figures may be, an important feature about employment statistics, or any statistics, is their reflection of a trend: that is whether a phenomenon has increased or decreased, and if so by how much.
In the latest employment statistics, for instance, the most heartening is that the number of discouraged work seekers, or those who have given up looking for work, increased by only 200 000. In the preceding September, the number had grown by one million.
And therein lies the issue: Unemployment statistics, like crime statistics, are not about level of incidence or even rate of decline. They are about whether people feel they have a better chance of finding a job or being mugged in a certain area than they did, say, a year ago. If more people are looking for work, it must be because they hear of other people finding jobs.
One explanation of the president’s concerns about why South Africa’s unemployment rate is vastly higher than those of, say, Brazil, India and the Philippines could be that those countries’ rural unemployment is masked by subsistence farming, which is not quality employment but helps massage statistics. The countries Mbeki cites also have far larger informal sectors than South Africa. In South Africa, the Rise and Fall of the African Peasant, as depicted by academic Collin Bundy, the Land Act ensured that subsistence farming did not absorb millions while apartheid trade restrictions have limited the growth of the informal sector.
The president’s critique does two important things. First, it reminds us that South Africa has not failed to create employment. There has been a failure to create jobs fast enough to absorb new labour market entrants. Secondly, the president emphasises the need to pay attention to the quality of employment. In the United States, a 1999 study found that although 5,9-million people are unemployed, an additional 24,3-million can be deemed to be under-employed or earning wages below the poverty line.
Writing in the Labour Markets Frontiers, Lebo Lehotso Phoko a researcher at the South African Reserve Bank, noted South Africa’s youthful population as an advantage, provided Aids is curbed and skills education is intensified.
Bhorat notes that the long-term solution to unemployment lies in economic growth.
What the president said …
In his weekly website corres-pondence entitled May Day III, the president questioned the accuracy of employment statistics, noting: “This is not to question the fact that we have a high unemployment rate. Precisely because of this, it is necessary that our collective response should be collectively focused, based on the real situation rather than perceptions.”
- Mbeki then notes an Inter-national Labour Organisation 2002 study which found that between 1995 and 1999 aggregate employment increased by 12%. However, growth in supply out-stripped growth in demand, which has led to an ever worsening employment gap. He also cites Mike Schussler’s South African employment report, which found that the economy has created 345 000 jobs over three years.
- The president then deduces from the standard definition of the unemployed as being those who “are actively seeking work”. He argues that if Statistics South Africa’s finding that there are 4,4-million people “actively” seeking work is correct, this show up in anecdotal evidence through our daily interactions.
- Mbeki then compares unemployment across peer countries like Brazil (where it was found to be 10,8% in March this year), India (9,1% in 2003) Nigeria (7,3% in 1988) and the Philippines (13,7% in April last year). He argues that South Africa’s unemployment cannot be that different from that in these socially challenged “sister countries”. If it were that much higher, Mbeki says, “we would then have to undertake actions … that are fundamentally different from virtually any other country in the world”.
- The president cites, as evidence of a need for deeper understanding of the unemployment picture, a United States study that shows that although 5,9-million people are counted as unemployed, a further 24,3-million people do involuntary part-time work or earn below the poverty line.
- Next the president notes that the differentials between the unemployment rate (22%) and the labour participation rate (12%) in the US and in South Africa “requires explanation” as the above figures should be roughly in line.
- Mbeki suggests that part of the problem may be that the statistics do not pick up people in the casualisation pool those on contract employment and cites studies in the retail and wine industries.
For a full version of Thabo Mbeki’s letter, see www.anc.org. — Thebe Mabanga