The new government administration that will take over the running South Africa post the elections this month will have its hands full in developing a job-creating economy with the high unemployment in the country
This comes as South Africa’s official unemployment rate rose to its highest in a year, rising by 0.8 of a percentage point to 32.9% in the first quarter of this year, up from 32.1% recorded in the fourth quarter of 2023.
Yesterday, Statistics South Africa (Stats SA) said the number of unemployed persons increased by 330 000 to 8.2 million, up from 7.9 million in the previous quarter, marking the highest figure since comparable records began in 2008.
Additionally, the number of people who were not economically active for reasons other than discouragement decreased by 214 000 to 13.1 million, while discouraged job seekers decreased by 1 000 in the first quarter of 2024 compared to the fourth quarter of 2023.
Stats SA said this resulted in a net decrease of 215 000 in the not economically active population.
Nedbank economist Johannes (Matimba) Khosa said the increase in the jobless rate was primarily driven by a seasonal increase in the labour force.
The labour force grew by 352 000 or 1.4% quarter-on-quarter as new graduates and school leavers entered the job market, while discouraged workers also usually return to the market at the start of the year with hopes of finding a job.
Khosa said the outlook for the job market remained poor.
“Employment in the services industries will likely stagnate as restrictive monetary policy continues to weigh on domestic demand, hurting confidence, making consumers wary of spending, and companies’ unwillingness to undertake fixed investment,” Khosa said.
“Consequently, we expect job creation to remain weak in 2024, with employment drifting sideways.”
According to Stats SA, the youth (15 to 34 years) remained vulnerable in the labour market as the total number of unemployed youth increased by 236 000 to 4.9 million while there was a decrease of 7 000 in the number of employed youth to 5.9 million.
This resulted in an increase in the youth unemployment rate by 1.3 percentage points, from 44.3% to 45.5%.
Trade union Uasa’s spokesperson Abigail Moyo yesterday said they were “deeply concerned” about the current status quo, where unemployment has become a reality for millions of young South Africans.
“When the unemployed head to the polls, what hope will they find on the ballot when unemployment has drastically shot upward over the years? Social and economic challenges, including slow economic growth, high crime rates and inequality, remain at the forefront, adding to the high unemployment rate,” Moyo said.
“What hope is there in a country where a whopping 45.5% of the youth between (15-34) are unemployed? Uasa has called on the president’s office several times to do away with the short-term employment plans, which will never solve this national crisis.”
The unemployment rate according to the expanded definition also increased by 0.8 of a percentage point to 41.9% in the first quarter of 2024 compared to the fourth quarter of 2023.
Anchor Capital investment analyst Casey Sparke maintained that the official headline unemployment numbers did not fully reflect the true extent of the unemployment crisis in the country.
Sparke saidthat how unemployment was measured tended to overlook specific segments of the population, such as discouraged workers who have given up searching for jobs and are, therefore, not considered part of the active labour force.
“Additionally, the official statistics do not adequately capture informal and underemployed workers. Many individuals in South Africa are trapped in low-skilled and precarious employment, leading to underemployment and persistent poverty,” Sparke said.
“The economy is simply not growing at an adequate rate to sustainably boost long-term employment prospects for South Africans.”
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