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SA needs policy discussion on stagnant unemployment rate – Stats SA

5th February 2013

By: Idéle Esterhuizen


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South Africa needed to get into a policy dialogue regarding its high unemployment rate, which has remained stagnant for more than a decade, Statistics South Africa (Stats SA) statistician-general Pali Lehohla said on Tuesday.

He was commenting at the release of Stats SA’s latest Quarterly Labour Force Survey (QLFS), which revealed that the country’s unemployment rate improved marginally to 24.9% in the fourth quarter of 2012, compared with the unemployment rate of 25.5% in the third quarter.


Lehohla stated that the numbers prompted the question of how effectively South Africa’s policies were addressing unemployment.

Stats SA population and statistics deputy director-general Kefiloe Masiteng told media at the launch of the latest QLFS that a decline in employment was mainly driven by the 48 000 decrease in the number of employed persons in private households, the 41 000 loss in the trade sector and the 18 000 fall in the number of persons employed in the transport sector.


Meanwhile, of the sectors in which employment was created, the agricultural sector led at 24 000 jobs, with the construction sector creating 15 000 jobs and the mining sector adding 8 000 jobs during the fourth quarter of the year.

The decrease in employment was the first to be recorded in the fourth quarter of any year since the inception of the QLFS and was attributable to 52 000 job losses experienced in the formal sector and 8 000 job losses in the private households sector.

Reflecting on the figures, banking group Nedbank’s economic unit said in a note to clients that, although the reduction in the country’s unemployment rate was good news, it mainly reflected the large number of discouraged work seekers, which increased by 87 000 between the third and fourth quarters of 2012, while other ‘not economically active’ persons increased by 259 000.

“Overall, economic activity remains generally sluggish, while upside risks to inflation have increased due to a weaker rand,” Nedbank stated.

Compared with the fourth quarter of 2011, employment increased by 0.6%, while unemployment grew by 6.1%.

Masiteng said, despite the strikes observed in the local mining industry in recent months, no job losses were observed in this industry in the fourth quarter of 2012. However, there was a sharp increase in temporary absence from work from 5 358 to 23 787 people between the third and fourth quarters.

Asked if she anticipated job losses in the mining sector during the first quarter of 2013, Masiteng stated that this would be subject to retrenchments and a decline in the number of people working in the sector in the near future.

Anglo American Platinum announced last month that it would restructure its operations, resulting in 14 000 job losses; however, the mining company had since agreed to a 60-day delay in implementing the Section 189 process.

She added that job losses in the agricultural sector would also depend on the industry’s response to Labour Minister Mildred Oliphant’s announcement on Monday that the minimum wage for farmworkers would go up to R105 a day from the current R69 a day.

Meanwhile, the unemployment rate remained highest among youth aged 15 to 24, at 50.9%.

Masiteng warned that this group was likely to place more pressure on the labour market, as about 3.3-million or 31.6% of the 10.4-million people in this age group, were not employed, studying or receiving training of any kind.

Nedbank’s economic unit further stated that local and international economic conditions were not expected to improve significantly during 2013 and that weak confidence and high wage settlement would make firms more cautious to expand capacity and employ more people during the year.

It noted that, although government was likely to be the main driver of employment, as it rolled out its infrastructure and job creation plans, South Africa’s unemployment rate was expected to remain high in the short term.

"We believe this will compel the Monetary Policy Committee to keep monetary policy neutral over an extended period, with interest rates remaining unchanged for most of 2013. A reversal in policy easing is likely only late in the year or even in 2014. However, deterioration in both the global and domestic economies would increase the chance of another cut,” the firm warned.


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