The SA Unemployment Rate May Be Worse Than We Think

Stats SA's Quarterly Labour Force Survey for Q1 2019 shows us that the country’s unemployment rate continues to rise, and when we take multiple factors into account, the unemployment rate may be far worse than we thought.
Jason Snyman
2019-06-02

The annual General Household Survey by Stats SA looks at key household statistics across our eight major metros, which include access to basic services like water and electricity, levels of education, travel times and other social welfare indicators.

Some of the most important information gleaned from this survey pertains to poor households, and the staggering levels of poverty that continue to haunt South Africa. 

According to Stats SA, approximately 28% of the 7.5 million households in major metros are classified as poor, where monthly expenditure comes to less than R2500.

Of these 2.1 million poor households, around 700 000 have children aged 7 – 18 years old. A shocking amount of these families can’t afford basic food items.

While the city of Cape Town (17.7%) has the lowest rate of poor households, followed by Pretoria (25.9%) and Johannesburg (26.8%), the situation is far worse in Bloemfontein and surrounds, where 40.3% of households are barely surviving at under R2500 per month.  

The level of poverty in South Africa is astounding, and when we look at the unemployment rate, we begin to get a better idea of how dire the situation really is.

In this article, we’ll take a look at the latest unemployment figures released by Stats SA, and which factors continue to contribute to the problem. 

Q1 2019 Unemployment Rate

According to Stats SA, around 6.2 million South Africans between the ages of 15 and 64 are unemployed. 

The Quarterly Labour Force Survey for the first quarter of 2019 shows us that the country’s unemployment rate has risen over the first three months of the year, putting the unemployment rate up to 27.6%.

If we include discouraged work seekers (around 156 000 people) and those who are not economically active for other reasons (around 169 999 people), according to Stats SA, the unemployment rate goes up to a staggering 38%.

Q1 of 2019 saw employed persons decrease by 237 000 (to a total of 16.3 million) and unemployed persons increased by 62 000 (to 6.2 million) when compared with the last quarter of 2018.

All four sectors saw a decrease in employment, with the formal sector recording the largest losses of 126 000, followed by the informal sector with 68 000, private households with 31 000 and finally agriculture with 12 000.

Women and youth are the most affected, with the rate of unemployed women and youth between the ages of 25 – 34 up to 52.8%.

This data is both in line with seasonal trends and what the market expected, with so many sectors laying off temporary staff hired to work over the festive season, and several indicators of slow growth over the first three months of the year. 

Most Industries Are Down

Between the last quarter of 2018 and the first quarter of 2019, six of the ten industries saw a decrease in the number of employed persons. These were the industries, ranked according to which lost the most people:

• Construction (142 000)

• Finance and other Business Services (94 000)

• Community and Social Services (50 000)

• Private Households (31 000)

Employment gains were recorded in other industries, however, with Transport gaining 59 000, Trade 25 000, Utilities 16 000 and Manufacturing 14 000.

It’s noteworthy that while the Finance industry flourished this time last year, it plummeted this year.

There are a number of different factors that contribute to the problem, including skills scarcity. Some of the most in-demand job skills in South Africa right now include account management, financial and project accounting and a number of others in the IT, finance, business and sales fields. 

The growing need to equip South African youth with the entrepreneurial skills necessary to create jobs, as opposed to just looking for them, is top of the agenda.

This is but one of the many complicated issues that continue to contribute to our country’s unemployment and poverty. And then, of course, the robots are coming.

Advancements in AI, robotics and other technologies of the fourth industrial revolution could very well provide the boost South Africa sorely needs in public service delivery, which is disgustingly under-par, and will aid in reducing the growing costs of running these services. 

The government has already begun to embrace this change, and it may not be long before we see automation and AI performing complicated, dangerous, routine or repetitive tasks much faster than humans can.

It may indeed be a matter of efficiency vs. unemployment, and that’s caught between a rock and a hard place.

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