High unemployment

LESS than half of South Africans of working age have a job. This is a finding of the 2017 South Africa Survey published by the IRR, based on Stats SA data. Only 43.3% of South Africans of working age are employed. The figure is lowest for black South Africans, who demonstrate a labour market absorption rate of 40.4%. These figures are low, especially when compared to many similar economies.

The labour market absorption rate measures the proportion of people of working age who are employed. It is an excellent gauge to draw comparisons of the health of labour markets across and within economies. The IRR has found that South Africa’s absorption rate depends largely on a person’s level of education. For example, the absorption rate for people with a tertiary education is 75.6%, while that for people with matric is 50.3%. Using Stats SA data, the IRR’s survey found:

The number of unemployed people (according to the expanded definition) has increased from 3.7 million in 1994 to 9.3 million in 2017;

Of the 9.3 million unemployed people, 6 million are under the age of 35 and young people show far higher rates of unemployment than older people;

Of the 9.3 million unemployed people, 8.3 million are black and the unemployment rate for black people is between 4 to 5 times higher than that of white people – again a reflection of differing skills profiles.

We estimate that reducing SA's unemployment to international norms will require doubling the number of people with a job over the next decade. That will require sustainable growth rates significantly in excess of 6% of GDP.

At the current rate of economic growth, there will be limited job creation and possibly, job shedding. This will worsen the unemployment crisis and the political tensions that flow from high unemployment rate.