Unemployment increases in third quarter

According to the latest unemployment figures released by Statistics South Africa (Stats SA), the unemployment rate for the third quarter of 2015 was 25.5%.
 
While the Quarterly Labour Force Survey (QFLS) collects data on the labour market activities of individuals aged 15 and older, the report “only covers labour market activities of persons age 15 to 64 years.”
 
While the results reveal that there was an increase in employment compared to the second quarter of this year (from 15 657 thousand to 15 828 thousand) there was also an increase in employment during this time (from 5 230 thousand to 5 418 thousand).
 
David Maynier, the Democratic Alliance (DA) Shadow Minister of Finance, commented: “We are in an economic cul-de-sac as massive job shedding continues in South Africa. The QFLS revealed that the number of people who are unemployed increased by 509 000 - from 4 909 000 to 5 418 000 - since the beginning of 2015.
 
“We can only stop the job shedding if we provide incentive for the private sector to invest so that we can grow the economy and create jobs for the 8.4 million people who are unemployed in South Africa.” 
 
The results
 
“The results for the third quarter Quarterly labour force survey (QLFS) show that the working-age population was 36.1 million – 15.8 million employed, 5.4 million unemployed and 14.9 million not economically active. The not economically active population decreased by 200 000 and the economically active population increased 359 000 quarter-to-quarter,” revealed Stats SA.
 
According to Stats SA, the formal sector accounted for the largest portion of the employment (69.1%), and the agricultural sector accounted for the lowest percentage at 5.7%. While these sectors experienced growth in employment, the Department of Labour highlighted that the trade industry showed the largest decrease in employment, compared to other industries during the course of the year.
 
Of the percentage of the population that was classified as being not economically active, this included people who are discouraged at 15% (i.e. not looking for jobs because they do not think they will find employment), with the remaining 85% of people not being economically active to other reasons, such as being a full time student or being a home-maker.
 
The challenge of unemployment
 
The Department of Labour has noted that “employment creation remains South Africa’s most pressing social challenge.”
 
According to reports, financial and economic experts are blaming the government and their economic policies for the unemployment problem.
 
“We should be supporting the private sector, rather than blaming the private sector for job losses. In order to do so, President Zuma should be tackling the fundamental roadblocks to economic growth to boost economic growth and create jobs in South Africa,” revealed Maynier.
 
These ‘roadblocks’ according to Maynier, include:

• Policy uncertainty;
• The energy crisis;
• Inflexible labour laws; 
• Failing State-Owned Enterprises; and 
• Over-burdensome red tape regulation.

 
“The economy reached 15 459 000 workers in the first quarter of 2015 from 15 320 000 in quarter four of 2014. This indicates a quarterly growth of 0.9% over the period. However, the continued labour force growth relative to slow employment growth still contributes to the persistent high unemployment levels, particularly among youth and women,” revealed the Department.
 
There have been a number of incidents that have contribute to the increase in unemployment. Among these is the global economic slowdown, which has affected South Africa’s major commodity exports.
 
Furthermore, there was the impact of the prolonged platinum mining strike and the electricity problems that the country faced.
 
In addition, Maynier pointed out that there are a number of bills that pose problems to job creation. “The Mineral and Petroleum Resources Development Bill, the Promotion and Protection of Investment Bill and the Licensing of Business Bill deter foreign investment, kill job opportunities and promote corruption in South Africa,” said Maynier.
 
The Department of Labour noted: “The best short-term prospects for faster growth lie in less energy-intensive sectors such as tourism, agriculture, light manufacturing and housing construction. These are also sectors that employ more people, and so they contribute to more inclusive growth.”
 
Tourism figures have dropped in recent months, with many citing the new visa regulations as the main cause. Last week government announced that it would be amending the visa regulations in the hopes that it will increase tourism numbers. For more information, click here.
 
Stats SA highlighted that the most recent report was based on a new master sample developed in 2013, while previous reports were based on the old master sample. “The quarter-to-quarter and year-on-year changes are influenced by the change in the updated sample. Stats SA will monitor estimates produced by the new master sample over the next quarters until they have stabilised.”