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UASA: True unemployment rate of 38% a wake-up call for policymakers

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UASA: True unemployment rate of 38% a wake-up call for policymakers

Photo by Reuters

15th May 2019

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South Africa’s expanded unemployment rate – which reflects the true unemployment rate – increased to its highest level ever in Q1 2019, namely 38%.

This announcement by Stats SA is very bad news for our country and a wake-up call for policymakers, as it shows that the current policies that have been in place for decades is not creating the jobs needed to reduce unemployment.

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The formal unemployment rate increased to 27.6%.

The unemployment rate is calculated by expressing the number of unemployed as a percentage of the labour force, which consists of the number of employed and number of unemployed. Put differently, 38 out of 100 people in the labour force are currently unemployed.

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Government needs to revisit policies which serve as obstacles to entrepreneurship and expansion of business, deal decisively with corruption, ensure infrastructure stability, re-establish South Africa as a prime investment destination and send out positive messages of political certainty in order to stimulate economic growth which will ultimately result in more jobs

Stats SA’s Labour Force Survey reveals that a year-on-year comparison on the state of the labour market (a quarter-on-quarter comparison is inappropriate as Q4 2018 includes seasonal workers which are normally released in Q1), shows the number of unemployed increased by 513 859 over the year. As such, the number of unemployed has now all but reached the 10 million mark – and is quickly approaching the 11.220 million people working in the formal sector.

A breakdown of the numbers shows the following. Over the year between Q1 2018 and Q1 2019:

  • The number of employed declined by (an average) of 7 174 workers per month;
  • The number of employed in the formal sector declined by 11 218 workers per month;
  • The number of employed in the community and social services sector declined by 17 589 workers per month;
  • The number of employed in the construction sector declined by 7 654 workers per month;
  • The number of employed in the manufacturing sector declined by 5 744 workers per month;
  • The number of employed in the finance sector increased by 9 507 workers per month;
  • The number of employed in the 15-24 year age group declined by 9 463 workers per month;
  • The number of employed in the 35-44 year age group declined by 5 348 workers per month;
  • The number of employed in the 45-54 year age group increased by 14 853 workers per month;
  • The number of white employed declined by 3 221 workers per month;
  • The number of black employed declined by 1 811 workers per month;
  • The number of coloured employed declined by 1 606 workers per month;
  • The number of Asian employed declined by 535 workers per month;
  • White workers now comprise 11.4% of all workers, down from 11.6% in Q1 2018 and 15.1% a decade ago.
  • Alarmingly, the number of unemployed increased by an average 42 822 people per month.

UASA is displeased with these numbers and we trust that the new government under Pres. Cyril Ramaphosa will focus on creating an environment to foster the growth of business, reducing unemployment figures and allow for economic development.

 

Issued by UASA

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