Jobless rate edges up to 23.6 percentWhile Statistics SA reported in its Quarterly Labour Force Survey that there was virtually no change in the unemployment rate, which rose marginally to 23.6 percent from 23.5 percent, that measure ignored the 1.52 million who had given up in despair.
But even the narrowly defined official unemployment rate ranks South Africa at the bottom of a list of 62 countries tracked by Bloomberg.
The figures released yesterday show that the number of people employed fell by 2 percent to 13.37 million between the first and second quarters of this year, with 267 000 jobs lost between the two quarters.
Most job losses occurred in private households, where 105 000 jobs were shed, pointing to job losses among domestic workers and smaller home-based businesses.
Added to the 208 000 jobs Stats SA says were lost in the first quarter, the losses for the first six months of the year total 475 000.
But Stats SA said despite the substantial drop in employment the decline did not translate into an increase in the number of unemployed, but rather an increase in the number of people who were not economically active. The number of people not economically active grew by 419 000. Of these the majority, at 302 000, were discouraged work seekers.
But Colen Garrow, an economist at Brait, said: “The crux of it is there were job losses. No amount of semantics will overcome the reality that the job situation is in dire straits.”
According to Andrew Louw, the DA’s shadow minister for labour, if discouraged work seekers were included the unemployment rate stood at 29.7 percent, meaning that three in 10 potential workers were unemployed.
Jaco Kleynhans, a spokesman for Solidarity, said leaving a large number of people out of the equation to make the official unemployment figure look rosier would not help to solve the staggering unemployment problem.
Compared with a year ago, Statistics SA said, there was a “massive increase of 724 000 persons who are not economically active”.
Azar Jammine, the chief economist at Econometrix, said: “You can’t take much solace from the fact that people are losing hope.”
In light of the job losses a wave of strike action and above inflation wage demands may seem unreasonable, but Cosatu spokesman Patrick Craven said strikes were justified as the worst possible response in a recession was for workers to agree to cut their living standards. This was because worker inflation was higher than the official inflation rate.
It was a false solution to cut workers’ salaries as demand in the economy would be affected.
Craven said that the government’s target to create 500 000 jobs this year would be more difficult but more necessary.
Jammine said the job creation plan was not stacking up against these job losses.
He said he did not think the government could do much in the short term to help ailing sectors. But the way to help the country was to get the work force to be more productive by ensuring they were educated and that would take a long time.
Garrow said the job creation target was noble but ambitious. The challenge was a large unskilled labour pool and the lack of a cohesive plan between the government and business to create jobs.
Additional reporting by Bloomberg
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