Unemployment rate climbs despite more jobs created in third quarter 2016

NOVEMBER 22, 2016

Employment increased in the third quarter of 2016 by 288 000 to 15.8 million people being employed, Statistics South Africa (Stats SA) said on Tuesday. The unemployment rate, however, increased by 0.5% quarter-on-quarter to 27.1% (the highest since 2003). According to the report, there were 5.9 million people that were unemployed in the third quarter.

Releasing the results of the Quarterly Labour Force Survey (QLFS) report, Statistician General Pali Lehohla said the increase follows on two successive quarterly declines.

According to the report, formal sector jobs increased by 112 000 quarter-on-quarter to 11 million.

The QLFS also showed that growth in employment was driven by the construction and finance and other business services, which grew by 104 000 and 103 000 respectively. The agriculture sector saw growth of 56 000 jobs, while trade added 61 000 jobs.

“… [When] people see that there is employment, their job search behaviour changes and they start searching. So we can have those two simultaneously happen… 11 million people are in the formal sector and 2.6 million in the informal sector,” said Lehohla at a media briefing.

52% of employed people in the country in the third quarter were aged between 35 and 54 years.

The services, trade and finances industries accounted for over 55% of the employed and 60% of gross domestic product (GDP), while the community and social services industries remained as the largest employer.

Lehohla said while the number of employed people increased from 14.4 million in 2008 to 15.8 million in 2016, the absorption rate in the country has not recovered to the pre-recession level of 45.8% in 2008. 

Unemployment rate

The unemployment rate among women was at 29.3%, while that of men was at 25.2%.

The report showed that unemployment remained the largest driver of poverty.

“Unemployment has remained stuck at around 26% but its impact as a driver of poverty has been the highest. It has grown from about 33% to 52% now.  While the unemployment rate has remained almost stuck at around 27%, its consequences on poverty have been growing the fastest,” said Lehohla.

Quarterly increases in the official unemployment rate were observed in six of the nine provinces, with the North West experiencing the largest increase at 3.2%.

The expanded unemployment rate, which includes those who wanted to work but did not look for work, decreased by 0.1% quarter-on-quarter to 36.3%

When coming to the ‘not economically active’ group, the report showed that 15 million people aged 15 to 64 years were neither employed nor unemployed.

The majority of discouraged work seekers had an educational level below matric.

“The key message is that while university education is not going to solve all the problems we have in South Africa, when you have it, unemployment becomes less of a problem,” said Lehohla.

National minimum wage

Lehohla said it’s too soon to tell what impact the national minimum wage will have, when it is decided upon. At the weekend, Deputy President Cyril Ramaphosa announced a proposed R3 500 national minimum wage.

“Obviously it’s early days. We will see in the numbers how it impacts employment,” said the Statistician General.

The Deputy President released an expert panel report on Sunday recommending the minimum wage to be set at R3 500 per month or R20 per hour. – SAnews.gov.za