‘Stubborn’ jobless rate hits six-year high
People: Gill Marcus
SOUTH Africa’s unemployment level reached a six-year high in the second quarter — adding weight to warnings that joblessness will plague South Africa for a long time if measures to grow the economy are not implemented immediately.
Reserve Bank governor Gill Marcus warned last week that high unemployment would persist if the economy grew at below its potential rate of about 3.5%, a rate cited often by economists. The Bank cut its growth forecast for this year to 1.7%.
Statistics South Africa’s quarterly labour force survey showed on Tuesday that official unemployment — which takes into account only people actively looking for work — rose for a third consecutive quarter to 25.5% in the second quarter (Q2) from 25.2% in Q1, and 24.1% in Q4 last year.
Data showed that the number of unemployed rose by 87,000 to 5.2-million — the highest since 2008.
The latest jobs numbers reflected the “stubborn” nature of unemployment and that people were still actively looking for work despite weak growth, said Stats SA deputy director-general for population and social statistics, Kefiloe Masiteng.
Expanded unemployment — taking into account people who have given up looking for jobs — rose to 35.6% in Q2 from 35.1% previously.
South Africa’s 30-year growth and development framework, the National Development Plan, says the economy needs to grow 5.4% a year to cut unemployment to 14% by 2020.
Manufacturing, mining, agriculture, and finance and business services recorded big job losses in the three months to June. The 5,000 jobs lost in mining were not attributed to the strike at platinum mines.
Ms Masiteng said the 60,000 jobs lost in manufacturing showed the extent to which the sector was under pressure from the weak economic growth environment that affected productivity.
High electricity and labour costs, a slow pick-up in global demand, and low domestic demand were among challenges facing local producers.
Old Mutual Investment Group chief economist Rian le Roux said implementing the government’s multibillion-rand infrastructure programme, completing the construction of the coal-fired Medupi power plant on time to ease energy supply constraints, and avoiding prolonged strikes would raise SA’s economic growth and employment potential.
However, job prospects would remain poor even if economic growth improved slightly. “Given the rising labour costs, wage settlements that are above inflation, electricity costs, and all the troubles in labour relations, particularly strikes, I think companies will try to limit their employment as far as possible,” Mr le Roux said. The job losses did not mean, however, that no jobs were created at all during the second quarter.
Employment rose by 39,000 in the three months to June, supported by jobs created by private households such as domestic work and those created by the informal sector.
Ms Masiteng said the informal sector was increasing jobs, particularly as low-skilled people and those with no formal education qualifications, who could not find jobs in the formal sector, were finding employment.
http://www.bdlive.co.za/economy/2014/07/30/stubborn-jobless-rate-hits-six-year-high