Unemployment to rise by 300 000

SOUTH Africa’s unemployment rate is expected to rise by 300 000 people by next year, according to the International Labour Organisation (ILO).

In its World Employment Social Outlook report released yesterday, the ILO warned that if there was no change in policy responses to the global economic slowdown, about 3.4 million more people would be without jobs by 2017.

It is estimated that 5.3 million people (25.5 percent) in South Africa will be unemployed this year, and 5.4 million people (25.7 percent) in 2017. Last year 5.1 million people were unemployed.

These projections should be of great concern to the government, which is already under pressure to deal with what many are labelling an economic crisis. Not only is the country likely to see further labour instability, social unrest will increase as jobs are lost.

The ILO said the unemployment situation was especially dire for emerging economies – Africa, Latin America, the Arab states and Asia – which together would see 2.4 million more jobless people this year.

Last year the number of unemployed people reached 197.1 million – approaching 1 million more than the previous year and more than 27 million more than pre-crisis levels.

“There is considerable heterogeneity among emerging economies, with significant increases in the unemployment rate in Brazil, the Russian Federation and South Africa anticipated for 2016.

“The deteriorating labour market conditions in these large economies will have knock-on effects in their respective regions, as spillovers from migration, reductions in remittances and slower earnings growth affect neighbouring economies,” the 91-page document reads.

To make matters worse, employment quality at the lower end of the spectrum had also begun to stall, it said.

Extreme poverty

In 2015, an estimated 327 million employed people were living in extreme poverty – those living on less than $1.90 a day in purchasing power parity (PPP) terms – and 967 million in moderate or near poverty (earning between $1.90 and $5 a day in PPP terms).

While this represents a significant reduction in extreme poverty compared with the levels in 2000, improvements since 2013 have been more limited.

The ILO said another concern was that the number of people employed in moderate and near poverty had increased since 2000, and evidence from other sources suggested that working poverty was on the rise in Europe. The organisation has called for a shift in economic and employment policies to deal with these trends.