/ 1 November 2012

One in four South Africans remain jobless

South Africa's unemployment rate rose in the third quarter
South Africa's unemployment rate rose in the third quarter

Unrest in the mining sector expected to drive that number higher still.

The ANC government has made job creation a priority, but the rate has been stuck above 20% for more than a decade despite periods of strong economic growth, fuelling social unrest.

Joblessness increased to 25.5% of the labour force, Statistics South Africa said on Thursday, putting 197 000 more workers on the streets during the quarter. The agency said 4.667-million people were registered as unemployed, the highest figure since current records began four years ago.

"It's amongst the highest unemployment rates globally and highlights quite strongly that we need to be taking some corrective action," said Colen Garrow, an economist at Johannesburg-based consultancy Meganomics.

By sector, mining was the second biggest contributor to the losses, shedding 8 000 jobs in a quarter that witnessed the most serious labour-related violence since apartheid's end in 1994.

In the worst incident, police shot dead 34 striking miners at platinum miner Lonmin's Marikana complex. A hefty wage settlement brought an end to the six-week walkout. But Lonmin, which employs 25 000 people, told unions this week an unspecified number of workers would be laid off as part of restructuring to get the firm out of a financial hole.

That alone suggests the jobless rate is likely to rise further in the final three months of the year. "It is expected that we will see more job losses in mining," said Kefiloe Masiteng, Stats SA's head of population and social statistics.

Anglo American Platinum chief executive Chris Griffith said the industry was in "severe financial distress" and elevated wage settlements to get wild-cat strikers back to work would lead to job cuts.

The world's top platinum producer has lost 141 640 ounces of platinum to date from a seven-week strike. "This is completely the wrong time to be offering unsustainable wage increases that the moment people are back at work you just have to [lay off] a whole lot of people," Griffith told Talk Radio 702.

"There will be implications for jobs."

Stuck in a rut
South Africa's jobless rate has been stuck between 21% and 29% since current records began in 2000, and it did not dip appreciably even when the economy was growing strongly in the years leading up to a 2008/09 recession.

The ANC has unveiled a big infrastructure development plan in February that it says should create millions of jobs in Africa's biggest economy. But Finance Minister Pravin Gordhan has said the economy needs sustained growth of 7% a year – nearly three times the 2.5% forecast for 2012 – to make a dent in unemployment.

South Africa's relatively rigid labour laws are part of the problem, making it difficult and costly for employers to fire workers, although the powerful unions have rejected any notion of reform, saying it would lead to exploitation. Youngsters – defined as 15 to 34-year-olds – accounted for 71% of all jobless people, compounding the fears of ANC leaders that they are sitting on a "ticking time-bomb" of youth unemployment that could ultimately trigger major social unrest.

The expanded definition of unemployment, which includes people who have stopped looking for work, increased to 36.3% from 36.2% previously.

Private households got rid of 29 000 workers during the quarter in a sector that mostly makes use of temporary workers. – Reuters