Unemployment hits 13-year high

22 November 2016

Cape Town - Unemployment in South Africa rose to 27.1% in the third quarter of 2016, Statistics South Africa announced on Tuesday.

This is 0.5 of a percentage point higher than the second quarter of 2016, when it was 26.6%, and 1.6% higher compared to the same period in 2015.

Statistics South Africa released the labour force survey for the third quarter of 2016 on Tuesday, which showed that of the 36.8 million people of working age in South Africa, altogether 21.7 million were in the labour force.

This means 5.9 million South Africans are currently without work — the highest number since 2003.

Of the 21.7 million-strong labour force, 5.9 million people were unemployed. Out of the 36.8 million-strong population of working age, 15 million people were not economically active. This includes 2.3 million discouraged work seekers.

“The current unemployment rate is 13.1% above the target rate suggested in the National Development Plan,” said Statistician General Pali Lehohla.

More people employed

He pointed out that although unemployment went up, there was also an increase in the number of people who are employed. An additional 288 000 were employed after two successive quarterly declines. “You can have the two simultaneously happening,” Lehohla said.

The biggest contributors to job growth were in the agricultural (56 000) and informal sectors (135 000), while 15 000 jobs were shed in private sector households compared to the second quarter in 2016.

“The absorption rate (the proportion of the working-age population between 15 to 64 years that is currently employed) has not recovered to pre-recession levels of 45.5% in 2008,” Lehohla said.

While the official unemployment rate stood at 5.9 million in the third quarter of 2016, the expanded unemployment rate increased by 136 000 since the second quarter, which amounted to 9 million.

Expanded unemployment includes people of working age who did not have a job and were available for employment.

During question time, Lehohla was asked if the proposed national minimum wage of R3 500 would have an impact on employment in the country. He responded by saying that it was too early to suggest any impact. “We’ll only see in the numbers much later on how it will impact employment.”

This article first appeared on Fin24, see here.