Quarterly Labour Force Survey: Results a testament to economic policy uncertainty
The Democratic Alliance (DA) notes with concern the release of today's Quarterly Labour Force Survey by STATS SA (see here - PDF). The survey indicates that, in the last three months, only 7 000 new jobs have been created nationally and the unemployment rate has increased to 25.7%. Most worrying, however, is that the number of formally unemployed people has increased by 174 000 in the last three months alone.
The key statistics from today's survey are as follows:
- Unemployment has increased from 25% to 25.7% in the last three months.
- The total number of people who are formally unemployed has increased by 174 000 people to 4 538 000 in the last three months.
- The formal sector shed 21 000 jobs in the last three months, whilst the informal sector created 34 000 jobs during the same period.
- On the whole, the country only managed to grow total employment by 7 000 jobs in the last three months.
- Since the fourth quarter of 2008, South Africa has cumulatively lost 902 000 jobs.
These numbers are deeply concerning. STATS SA has stated that the significant increase in unemployment indicated in the survey released today is due to an increased number of previously discouraged work seekers now looking for work. However, the DA believes that the numbers contradict this argument. The number of discouraged work seekers has only decreased by 16 000 people, while the number of unemployed South Africans has increased by 174 000 people.
This indicates that the increase in unemployment is due to the economy's failure to absorb new labour market entrants, and not due to the decrease in discouraged work seekers. The fact that total employment has only increased by 7 000 indicates that the economy has not been able to absorb new labour market entrants, making this the biggest contributor to the spike in unemployment.
Most troubling, however, is that our economy has still not been able to recover sufficiently to meet pre-recession levels of employment, with 902 000 fewer people employed now compared to the fourth quarter of 2008. At the end of 2008, 14 027 000 people were employed, and today only 13 125 000 people are employed in South Africa. This therefore represents a cumulative loss of 902 000 jobs over these two-and-a-half years.
It is within this context that the current economic policy uncertainty emanating from the Zuma administration is especially disconcerting. Various policy debates are raging over how to address the unemployment crisis, and President Zuma has failed to give any clear leadership on this issue. It is becoming increasingly clear that the Zuma administration is failing on its promise to make 2011 the year of job creation.
The debate surrounding nationalisation and expropriation of land, future policy uncertainty, faltering FDI numbers, an increasing budget deficit, the Zuma cabinet's inadequate handling of the Walmart-Massmart merger, uncertainty about the future of labour brokers, and now a significant increase in unemployment are all factors that point to a failure by this President and this administration to successfully manage our economy to the benefit of all South Africans.
Our country needs jobs, and the President has failed to display the leadership necessary to ensure that government does all it can to stimulate economic growth and job creation.
The DA has an alternative economic vision that will help to create a stable and sensible macroeconomic climate that can be coupled with appropriate interventions to increase job creation and skills development. The DA has already suggested several such interventions.
These include a wage subsidy, a tax rebate for skills development, opportunity vouchers for young people, a tax holiday for newly established small-scale enterprise, increased investment in infrastructure development and maintenance, and additional support for SMMEs.
The DA believes that these interventions will help to significantly increase our country's rate of employment growth - especially for the youth - thereby delivering much needed opportunities to all South Africans. We will therefore continue to use all available forums to relentlessly advocate for the implementation of such policies.
Statement issued by Ian Ollis MP, DA Shadow Minister of Labour, July 28 2011
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