Unemployment rate remains unchanged, despite 45 000 new jobs being created

The ailing South African economy has added more than 40 000 new jobs, but this increase has not kept pace with the country’s population growth. Instead, the latest unemployment figures show that the the numbers for the fourth quarter of 2019 remain unchanged, at 29.1%. 

According to the latest quarterly labour force survey, released by Statistics South Africa (Stats SA) on Tuesday, 16.4-million South Africans are employed, and 6.7-million people don’t have jobs. This is of a potential workforce of just more than 23-million people.

The number of people with work increased by 45 000 in the fourth quarter of 2019. But the working-age population increased by 145 000 over the same period, meaning that the unemployment rate ended up remaining unchanged at 29.1%.

Stats SA said this is the first time since 2008 that the unemployment rate has not decreased in the fourth quarter.  

The largest employment increase was in the formal sector, with 117 000 new jobs created, followed by the agriculture sector with 6 000 new jobs. Employment in the informal sector declined by 77 000 in the fourth quarter of 2019 compared to the third quarter of the same year

Nearly 160 000 jobs were lost in the retail and wholesale trade sector. 

PwC economists Lullu Krugel and Christie Viljoen said the shedding of jobs in these sectors in the fourth quarter is concerning, because the retail sector usually sees an increase in employment “as retailers increase staff for the November (Black Friday) and December (holiday) shopping periods”.

In a note released after the labour force survey was published, the PwC economists said: “The decline in retail employment reflects weak confidence among retailers and [brings] consumer confidence back [into] negative territory.”

Labour economist at the University of Johannesburg, Gerhardus Van Zyl, said the decrease in jobs in the retail sector is a reflection of a decline in consumer spending. “There is simply no demand for semi- and lower-skilled labour. These categories constitute a huge percentage of people [who] are seeking employment.”

Discouraged work-seekers

The number of discouraged work-seekers increased by 62 000 to nearly 2.9-million, with the number of people who were not economically active for reasons other than being discouraged also increasing — by 45 000, to 12.7-million people.

The category of “discouraged work-seekers” is a controversial one, because it includes people who have tried to find work but have been deemed to have given up and are no longer actively looking for work. This has been labelled as a way for the unemployment rate to look better than it actually is, because these people do not actually have jobs. 

Commenting on the number of discouraged job-seekers, Van Zyl said that the numbers show that the private sector is not investing in additional productive capacity to absorb more workers. Additionally, he said that urgent policy reforms are needed to stimulate growth to spur job creation. 

Van Zyl noted that the “government is in no financial position to create jobs”, and added that “the only solution” is to focus on the small business sector and, in so doing, bring in a greater amount of foreign direct investment. 

Thando Maeko
Thando Maeko is an Adamela Trust business reporter at the Mail & Guardian

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