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SA: Statement by Statistics South Africa, on the Labour market dynamics report 2013 (09/04/2014)

SA: Statement by Statistics South Africa, on the Labour market dynamics report 2013 (09/04/2014)

9th April 2014

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Highlights

South Africa did not escape the effects of the global economic crisis of 2007–2009 which had far-reaching effects across the world. The pre-recession period was generally characterised by annual growth in employment, declines in unemployment, and GDP growth in excess of 4,0% each year. The global financial crisis had the biggest impact on the South African economy over the period 2008 to 2010. Since 2011, there has been a resumption in employment growth, but unemployment levels have also risen while the recovery of real GDP growth has been at a substantially slower pace than in the pre-recession period
 
Figure 1: Annual change in employment, unemployment and real GDP

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Figure 2: Transition rates into employment, Q3: 2013 to Q4: 2013
 


Labour market dynamics


·         Over the period Q3: 2013 to Q4: 2013, panel data constructed from the Quarterly Labour Force Survey (QLFS) highlights that the employed are most likely to stay employed. As many as 92,9% of those with jobs remained in employment. Only 13,1% of the unemployed found employment. The unemployed, discouraged work-seekers and other not economically active persons (as a group) are more likely to find employment in the formal sector but the informal sector serves as a point of entry into the formal sector.

·         Gender disparities in employment transition rates are most pronounced in the North West and Northern Cape. And transition rates into employment are higher for adults compared to youths in every province except in Western Cape.

·         Those with work experience are more likely to find employment compared to those who have never worked before.

·         Domestic workers, Clerks and sales and service workers were most likely to remain in these occupations while skilled agricultural workers were least likely.

·         In all provinces, formal sector retention rates were higher than in the informal sector. The highest formal sector retention rates were in the Western Cape, Free State and Gauteng, while the highest informal sector retention rates were in North West, Free State and Limpopo.

·         Firms with less than 10 employees created the most jobs in all provinces, however, in Western Cape and KwaZulu-Natal firms with more than 50 employees created more than one in four of the jobs found in Q4: 2013.

Labour market rates
·         Over the period 2008 to 2013, employment increased from 14,6 million to 14,9 million. But over the same period unemployment also increased - from 4,2 million to 4,9 million. This resulted in an increase in the unemployment rate from 22,5% in 2008 to 24,7% in 2013. The rate rose to 24,9% in 2010, declined to 24,8% the following year and rose again in 2012 to 24,9%. In 2013 there was a modest decline to 24,7%.

·         For specific groups there has been some improvement in key rates over the post- recession period of 2011 to 2013 which is characterised as follows:
o   The unemployment rate among women and the black African population declined for two successive years, although the rate for both groups remains substantially higher than the national average.
o   The absorption rate among women rose steadily over the post-recession period (from 35,3% in 2010 to 36,9% in 2013) and among the black African population from 37,6% to 39,3% over the same period.
o   The unemployment rate among the youth rose from 32,0% in 2008 to a high of 35,8% in 2012 before declining slightly to 35,4% in 2013.
o   The absorption rate among youth declined steadily over the period 2008 to 2011 with only modest increases in the following two years.

Employment patterns and trends
·         Employment by industry over the period 2008 to 2013 shows gains in Community and social services (575 000), Finance (213 000), Transport (91 000), Mining (57 000) and Utilities (25 000). In comparison, large employment losses were observed in Manufacturing (281 000), Trade (184 000), Agriculture (79 000) and Private households (67 000).

·         In terms of occupations, between 2008 and 2013, the number of Sales and service workers increased by 304 000, followed by Managerial and Professional occupations up by 126 000 and 118 000 respectively. The largest declines in employment over the period was among workers in Craft and related trades (330 000) and those in Skilled agriculture (42 000).

·         Employment in the formal sector increased from 10,1 million in 2008 to 10,5 million in 2013, while informal sector jobs remained virtually unchanged at 2,4 million.

·         Trends in the number of hours per week spent by workers at their workplaces showed that women worked fewer hours on average (41–42 hours) compared with men (45–47 hours) over the period 2008 to 2013. Hours worked spent by workers according to industry type differ considerably, driven by factors such as the labour intensity of the sector and the experience of the workforce as determined by their education and skills levels. People employed in the Transport and Trade industries worked the longest hours while those working in Private households worked the least number of hours each week. Provincial trends over the period 2008 to 2013 show that in every province the length of the work week declined.

·         Over the period 2008 to 2013, the incidence of underemployment declined among all population groups, with the largest decline occurring among Indians/Asians and black Africans. The decline was generally by a larger margin among women compared with men, and tended to be so in provinces such as KwaZulu-Natal and North West compared with the other provinces. The highest incidence of underemployment was among those working in Private households.

·         Over the period 2008 to 2013, access to several benefits improved for South African employees; the number of employees who enjoyed the benefit of pension contributions from their employers increased from 45,5% to 48,0%; and those with medical aid increased from 28,7% to 31,6%. But access to benefits has remained consistently higher for men than for women. And in 2013 the proportion of women with monthly earnings below the threshold of two-thirds of median monthly earnings was substantially higher (42,1%) than men (28,8%).

·         Median monthly earnings of employees declined from R3 115 in 2012 to R3 033 in 2013. And large disparities by population group are still evident. In 2013, the earnings of the white population group increased to R10 500, while among the coloured workers there was a decline. The earnings of the black African and Indian/Asian groups remained unchanged. At R2 600 in 2013 the earnings of black Africans amounted to barely 25% of white earnings.

·         Fetching water/collecting wood and subsistence farming were the main types of activities undertaken for household consumption. This type of activity is not counted as employment in South Africa and it is predominantly undertaken by women, who are generally black Africans, and are younger people, and happen to be the less educated and those who mainly reside in KwaZulu-Natal, Eastern Cape and Limpopo.

·         Over the period 2011 and 2013, the number of persons engaged in own-use activities expressed as a percentage of the working age population declined from 16,1% in 2011 to 15,0% in 2013. This trend is reflected in the distributions by sex, age and population group.

Government job creation programmes
·         Awareness about Expanded Public Works Programmes and other government job creation programmes increased from 42,8% in 2011 to 49,7% in 2013 and more women than men participated in such programmes. In 2011, a larger proportion of youth compared to adults participated in Expanded Public Works Programmes but this was reversed in 2013 when participation among adults was higher than among youth.

·         Participation in government job creation programmes was also highest among the less educated, while the provinces of Gauteng and KwaZulu-Natal had the most people that had participated in those programmes (26,0% and 18,2% respectively).

·         In 2013, three out of five participants in government job creation programmes (63,2%) that were employed had jobs in the tertiary industries, up from 58,1% in 2011 while four out of every five participants who were employed had jobs in the formal sector.

Unemployment patterns and trends
·         Unemployment in South Africa is not uniformly distributed according to the demographics of the country. Since 2009, although fewer women than men were unemployed, the incidence of long-term unemployment is higher among women. It is also highest among the black African population group and lowest among the white group.

·         In 2013 the incidence of long-term unemployment declined for all population groups with the largest decline occurring among the white population (3,3 percentage points) followed by the black African population group (1,9 percentage points).

·         Job-search patterns among the unemployed were concentrated in a narrow range of activities. In 2013, more than one half of all unemployed persons enquired at workplaces/factories, etc., in search of work.

·         Youth aged 15–34 years and persons with tertiary education are much more likely than other groups to search the internet when looking for work.

Youth in the labour market
·         In 2013, youth accounted for 55,7% of the working age population aged 15–64 years yet they are disproportionately represented among the employed (40,4%); the unemployed (67,4%); the discouraged work-seekers (66,5%) and among others who are not economically active (67,0%).

·         The type of contract on which a young person is employed impacts on their vulnerability in the labour market. Young people are almost twice as likely to be employed on a limited duration contract compared to adults. The youth are also less likely to be employed on a permanent contract, as well as receive benefits such as medical aid and pension contributions from their employers. A higher proportion of youth compared with adults do not receive regular salary increases while a smaller proportion have their salary increments negotiated through union affiliation and the employer.

·         Levels of education also play an important role in the unemployment rates faced by young people. The rate for those with a tertiary qualification was the lowest among both adults and youth, yet among young people it was still more than three times that of adults. Gender disparities are also large. Unemployment rates are substantially higher among young women than among young men while absorption rates are lower among young women compared with young men. And among young people who are not in employment and not in education/training (NEET) the rate among young women is also substantially higher than the rate among their male counterparts.

International comparisons
·         The unemployment rate in South Africa at 24,7% in 2012 was the highest among emerging market economies, but in a wider global context, in countries such as Mauritania and Macedonia (both with 31,0%), Reunion (28,3%), Bosnia and Herzegovina (28,2%), Lesotho (26,5%), and Spain (25,2%) the rate was higher than in South Africa. And over the period 2008 to 2012, while in South Africa there was a modest increase in the unemployment rate by 2,3 percentage points, in Greece and Spain the unemployment rate increased by 16,6 and 13,7 percentage points respectively.

·         Although South Africa had the highest unemployment rates among both men and women in 2012, the ratio of female to male rates at 1,19, is similar to that of Poland (1,16) and smaller than in nine of the seventeen emerging market economies for which data are available.

·         Among emerging market economies, in 2012, South Africa had the highest incidence of long-term unemployment at 67,9%, followed by Chile at 59,7%.

·         There is widespread acknowledgement (by the International Labour Organisation and others) that the level of education/training of the workforce needs to be scaled upwards. Yet the proportion of the labour force that have secondary or higher educational qualifications varies considerably among emerging market economies: 29%–40% in Turkey, Pakistan, Thailand and Indonesia; 45%–50% in South Africa and India; and as high as 80%–95% in the Russian Federation, Poland, Hungary and Malaysia.

 

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