South Africa’s real unemployment rate – 38.5%

Unemployment figures continue to rise in South Africa, and all industries are affected.

The recent CareerJunction Index (CJI) report shows that employers are advertising fewer jobs in South Africa than before – even in fields such as ICT, engineering, business, and management.

However, this is unfortunately not because more South Africans are already employed. Stats SA recently announced that the South African unemployment rate increased from 27.6% to 29% in the second quarter of 2019.

As a result of this terrible economic situation, Nedbank recently revised its forecasted 2019 GDP growth for the country from 1.3% to 0.5%.

“Significantly more urgency is required with the implementation of structural reforms to stem the economic and fiscal deterioration currently being experienced in the SA economy,” said Nedbank CEO Mike Brown.

Brown added that if South Africa does not implement these structural reforms soon, the country will face even weaker growth and lower levels of employment than would otherwise have been expected.

Even worse than the official numbers

As bad as the current unemployment numbers appear, Solidarity claims that the official figure is not accurate, with the real number being significantly higher.

“Although the use of the narrow or strict definition of unemployment is common practice around the world and also recommended by the International Labour Organisation (ILO), there are several reasons to believe that this measurement is inaccurate for South Africa’s labour force,” said Morné Malan, senior researcher at the Solidarity Research Institute (SRI).

Malan highlighted the following as proof that the 29% figure is not an accurate reflection of the situation in South Africa:

  • “South Africa has an exceptionally large gap between the narrow definition of the unemployment rate (29,0%) and the expanded definition (38.5%).”
  • “We have a particularly low labour absorption rate (42.4%).”
  • “A 2013 study at the University of KwaZulu-Natal indicates that so-called discouraged jobseekers, who are not counted as unemployed in the official rate, are in no way less likely to be employed than so-called active jobseekers.”

Solidarity contends that the expanded definition of 38.5% unemployment shows that there is a greater need for action from the government to deal with unemployment as a core issue in South Africa’s economy.

“The government is causing the problem with counter-productive policies such as minimum wage, strict labour legislation, intensified enforcement of Black Economic Empowerment, and many more,” said Malan.

“The only solution to the problem is for government to eliminate these barriers to doing business in South Africa. Otherwise, I fear that unemployment, which is accompanied by countless other social and economic issues, will never be resolved.”

Now read: South Africa facing “bitter medicine”

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South Africa’s real unemployment rate – 38.5%