SA’s jobless rate climbs to 11-year high
SA’s unemployment rate jumped to an 11-year high of 29% in the second quarter of the year, which is likely to make it harder for President Cyril Ramaphosa to fulfill his promise of creating a quarter of a million jobs a year.
Reducing the unemployment rate and putting the economy on a robust growth path are at the top the list in Ramaphosa’s reform drive. But there are growing concerns that he might not be able to push through structural changes to address racial disparities in income, housing and other services as some influential leaders within the ANC appear to be opposed to his agenda.
The unemployment rate was much higher than expected. Economists polled by Bloomberg expected the unemployment rate to rise to 27.7%, after the 27.6% recorded in the first quarter.
Unemployment has not been this high since the first quarter of 2008, when Stats SA first started recording unemployment on a quarterly basis. The last time unemployment was higher than this was in March 2003, when it stood at 29.3%. However, Stats SA did not measure employment on a quarterly basis at the time, statistician-general Risenga Maluleke said.
The number of unemployed people in the second-quarter of 2019 increased by 455,000 to 6.7-million in the second quarter, according to data released by Stats SA on Tuesday. This is significantly higher than the 4.3-million unemployed people 10 years ago.
The increase stems from SA’s working-age population increasing by 150,000, while the number of discouraged workers decreased by 248,000, and the number of people not economically active decreased by 77,000.
While participation in the workforce increased by one percentage point to 59.8%, the absorption rate into the workforce decreased by 0.2 of a percentage point to 42.4%.
Employment in the formal sector and private households declined by 49,000 but employment in the informal sector grew by 114,000 and in agriculture by 5,000.
Trade, community and social services, construction and manufacturing recorded employment gains. However, employment losses were recorded in private households, transport, mining, and finance and other business services.
The expanded unemployment figure, which takes into account people who are not economically active, increased from 38% to 38.5%. According to the survey, the unemployment rate among the youth is higher, irrespective of education level, with youth unemployment standing at 32.3%.
The Eastern Cape recorded the highest unemployment rate provincially at 35.4%, while Limpopo was the lowest at 20.3%. Gauteng has an unemployment rate of 31.1% while the Western Cape has an unemployment rate of 20.4%.