Scale of SA’s jobs crisis laid bare

A failure to ‘create jobs’ has been South Africa’s most enduring problem since 1994. The full extent of this is brought out in the 2023 edition of the South Africa Survey, published by the Institute of Race Relations.

The South Africa Survey, the latest edition of which was released last week, is a comprehensive collection of statistics on the state of the country, produced annually since the 1940s. It is regarded as the definitive dispassionate account of the country, providing not only a snapshot of the year in review, but also detailed time series data and international comparisons.

South Africa officially defines unemployment as referring to those lacking work, wanting and being available for work, and actively seeking it. By these measures, the rate has grown from 20.0% in 1994 to 33.0% in 2022.

The expanded definition dispenses with the requirement that those without work be actively seeking work; it therefore includes those who are discouraged from seeking work. By this measure, the unemployment rate shot up from 31.5% to 44.1%.

This makes South Africa an outlier: Greece, despite its economic distress, has a rate of 12.2%; Brazil 8.9%; China 5.3%; Russia 3.8%; the United States 3.5%; and Uganda just 2.9%.

Perhaps more concerning is the participation and uptake of South Africa’s people in the economy.

The labour participation rate measures the proportion of the working-age population that is economically active: those who are employed and unemployed but in the labour market. It distinguishes these from the economically inactive, which includes full-time students, homemakers and pensioners.

This has fallen slightly, over time – from 60.8% in 2001 to 56.8% in 2022 – although this is not enormously significant. Most South Africans want to enter employment.

More significant is the labour absorption rate. This measures the ability of the economy to take on potential workers. (It is defined as the proportion of the working-age population that is employed, in other words, all those who do any work for pay, profit or family gain.) As unemployment has risen, so the labour absorption has fallen. In 2001, the labour absorption rate stood at 45.8%; in 2022, it was 37.8%.

In sum, the ability of the economy to take on new entrants, not great at the beginning, has fallen catastrophically.

The impact of this is well illustrated by looking at the raw numbers.

In 1994, total employment stood at close to 8 million. In 2022, the number of employed had almost doubled, to 15.5 million. But, concerningly, the number of young people employed – those between the ages of 15 and 24 – actually fell, from 1.5 million to a little over 1 million. It’s worth reiterating that: a half a million fewer young people are in employment now than at the time of the transition three decades ago.

In 2022, those officially defined as unemployed amount to just under 8 million; of these, 1.7 million are youth. By the expanded definition, 12.3 million people are unemployed, of whom 2.7 million are counted as youth.

To put that last figure into perspective, for every young person with a job, close to three lack one.

The state of the labour market, and its development over the past decades, are not encouraging.

To order a hard copy of the Survey or watch a recording of the online launch, visit the IRR’s website.

Media contacts: Terence Corrigan, IRR Projects and Publications Manager Tel: +2766-470-4456 Email: terence@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za

Sinalo Thuku, Tel: 073 932 8506 Email: sinalo@irr.org.za