Between 510 000 and 740 000 new jobs a year are needed to meet the Accelerated and Shared Growth Initiative for SA (Asgisa) target of halving unemployment by 2014, according to investment bank Merrill Lynch.
The first figure is based on South Africa’s official unemployment rate of 25%. The second figure is based on the broader definition which shows that up to 40% of the labour force is unemployed, Business Report wrote on Tuesday.
The economy has grown by more than 4% a year over the past three years and Statistics SA figures show this has added only about 500 000 jobs each year.
The Merrill Lynch report said, despite the improvement in employment growth, the economy still fell ”well short of the required rate to achieve the Asgisa target”.
The economy’s employment intensity — the number of formal jobs (excluding agriculture) per R1-million worth of production -‒ has declined from about 16 in 1967 to less than eight in 2006.
Unless this trend stabilises, the economy will have to grow its GDP by an average rate of 7% to meet the Asgisa employment target, the investment bank warned.
South Africa will have to create 510 000 jobs a year, a job growth rate of 3,5%.
Employment has grown by an average of 2,7% each year for the past five years. – Sapa