South Africa’s economically active population rising amidst depressed growth in jobs – Department of Labour ALMB

OCTOBER 27, 2014

While the South African economy has come a long way since the harsh recession in 2008, it was still growing at meagre rates. The Department of Labour’s Annual Labour Market Bulletin (ALMB) 2013-2014 Report says the economic growth remains one of the critical channels to address the triple challenge of unemployment, inequality and poverty in the country.

On the performance of the Rand, the report says during the course of the financial year 2013/14, the foreign exchange market was affected by various factors. Among other critical factors was the labour unrest in the country and low economic growth globally that lowered the foreign investor’s confidence with large capital outflows from emerging markets and by implication weakened the Rand over the period under review.

It says the Rand was one of the worst performers among major emerging market currencies in 2013, as it depreciated by almost 24% against the US dollar.

South Africa’s economically active population is growing, an indication that more people are coming into the labour force. Unfortunately, the growth in the number of economically active population does not correlate with the growth in the number of jobs created year-on-year.

According to the Department of Labour’s Annual Labour Market Bulletin –the total number of economically active population has increased by 3.9% between September 2011 and 2012 then 2.3% between September 2012 and 2013. In March 2014, it stood at 20 122 000 people.

The provincial breakdown shows that five out of nine province’s economically active population had been constantly increasing since September 2011 to March 2014. These include the Eastern Cape, Gauteng, Mpumalanga, North West and the Western Cape.

The report says while the National Development Plan (NDP) targets need to be cascaded across all government departments, the challenge of finding employment for more than five million unemployed by 2030 is still evident because of structural nature of the South African economy and labour market.

At the present pace of job creation, it will take months or years for the economic growth to reach the planned 7% growth per annum to create sustainable employment to absorb the growing number of unemployed persons. Sustainable economic growth, restoring the country’s competitiveness in the global economy and better matching of the work-seekers with the jobs are required for Government to be able to find employment for more than 5 million unemployed people.

The report says the country’s labour absorption rates have almost remained the same over the years, at 42.8% which is still below the international standards which is mostly above 60%. In this regard, the role of the Public Employment Services (PES) can be harnessed in finding work in particular for young people. It says this has proven particularly effective in registering and placing unemployed in other countries such as Germany and China.

In the 2013/14, the department of Labour recorded about 607 229 work seekers into the Employment Services for South Africa (ESSA). Out of the total work seekers registered, Gauteng province recorded more than one fifth (23%) followed by KwaZulu Natal (18.1%) and the lowest was in the Northern Cape (3.3%) province. About 2.5% of the total work seekers registered were placed in the same financial year, says the ALMB.

At the international level, the report observes that over the foreseeable future the world economy will probably grow more slowly than was the case before the global crisis. This complicates the task of generating the more than 42 million jobs that are needed every year in order to meet the growing number of new entrants in the global labour market.

Regarding the performance of collective bargaining, the report noted an increase in the trade unions membership at 22.6% in 2013/14 financial year as compared to the previous financial where a decrease of 10.7% in the trade union membership was recorded.

Following this, the South African Government remains hopeful in the sense that an effective implementation of NDP will put the South African economy in a positive recovery direction till 2030. The effort put by government in allocating  large amounts of its budget to education and training coupled with the rising education attainment of work-seekers are welcome and applauded, concludes the report.