Hard Work Is Needed to Improve Employment Rate

Thursday, 24 November, 2016 - 09:20

Stats SA announced on Tuesday that unemployment had risen to a 13 year high of 27.1%

Economist Kevin Lings says the country needs to create more than 350 000 jobs a year just to keep the unemployment rate at 27,1%.  Stats SA announced on Tuesday that unemployment had risen to a 13 year high of 27.1%.

Lings, a chief economist at Stanlib, said the chronically high unemployment rate can only be eased by nurturing skills through an effective education system. "We have to do a skills audit in the country and nurture skills according to our needs - the CEO initiatives would help - but there must be broader intervention," says Lings.

Lings said recent efforts by the government and business to create internship programmes and entrepreneurial funds may help but everyone must do their part as government only can only do so much.

"They have to cut costs because they are facing pressures from the ratings agencies to get their fiscal challenges in order," says Lings.

Statistician General Pali Lehohla also said education could help reduce the unemployment rate. He reported that the latest unemployment numbers show that graduates account for only 7% of the millions of people without jobs in South Africa. “This shows that there is a demand for graduates in the labour market,” says Lehohla.

The rand held its ground despite the gloomy jobs data, propped up by firmer metal prices which boosted commodity currencies. It traded at 14.0800/dollar by 1110 GMT, slightly off a session high of 14.0525 but still up 0.9% on the day.

Stats SA said 5.873 million people were without jobs in the third quarter, compared with 5.634 million previously.

"The sectors that are the real economy have generated negative growth, both quarter on quarter and year on year. Manufacturing mining and agriculture have all been losing jobs," says Lehohla.

The manufacturing sector, which accounts for about 15% of GDP, lost 28 000 jobs while mining lost 9 000.

The expanded definition of unemployment, which includes people who have stopped looking for work, was slightly lower at 36.3% in the third quarter, from 36.4% in the second.

  • 2016 Second Quarter unemployment rate - 26.6%
  • Highest unemployment figure recorded in 13 years - 27.1%

Unemployment by Province

For the year ended September 2016, employment losses were recorded in six of the nine provinces:

  • KwaZulu Natal – 77 000
  • North West – 22 000
  • Free State – 14 000

Employment gains were recorded in the Eastern Cape, Gauteng and the Northern Cape.

  • Eastern Cape – 71 000
  • Gauteng – 57000
  • Northern Cape – 6000

Employment by Sector

The formal and the informal sectors recorded employment gains for the first time in 2016:

  • Formal sector employment intake - 112 000
  • Informal sector employment intake - 135 000

Employment by Population Group

  • White and Indian/Asian groups dominate skilled occupations
  • Majority of black African and coloured men were employed in semi or low skilled occupations
  • Black women however remain vulnerable in the labour market... with larger employment shares in low-skilled occupations

Employment of Population Groups by Tertiary Qualification

The share of employed persons with tertiary qualifications (graduates and other tertiary) was highest among the white and Indian population groups:

  • White - 47.3%
  • Indian/Asian - 29.7%
  • African - 16.2%
  • Coloured - 13.3%

Employment by Industry

Quarterly employment gains were driven by increases in six industries:

  • Construction - 104 000
  • Finance/other businesses - 103 000
  • Trade - 61 000
  • Agriculture - 56 000
  • Transport - 53 000

The number of employed persons decreased in four industries, namely Community and social services, Manufacturing, Private households and Mining.

  • Kevin Lings, chief economist at Stanlib​. This article first appeared in the SABC website.

Photo Courtesy: lockerdome

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