There is Little Hope for the Unemployed in South Africa

By Vivian Atud

 Johannesburg- Sunburst Africa–As we get to the end of 2014, unemployment continues to grow- dampening any hopes of finding a job for those who have never been employed in South Africa.

According to data released by Statistics South Africa (StatsSA) last week, the number of employees in the formal non-agricultural sector of the South African economy decreased from an estimated 8 669 000 employees in June 2014 to an estimated 8 540 000 employees in September 2014.

The September 2014 Quarterly Employment Statistics (QES) survey showed that an estimated 8 540 000 persons were employed in the formal non-agricultural sector of the South African economy. This reflected a quarterly decrease of 129 000 employees (-1, 5 percent) between June 2014 and September 2014 and an annual increase of 83 000 employees (+1, 0 percent) between September 2013 and September 2014. This is bad news for the unemployed for the following reasons:

Firstly, it is more difficult to find a job in South Africa especially if you have never worked. This is made worse by the fact that many mining companies have indicated their intentions to cut jobs in the coming years as cost of production continues to increase amidst falling resource prices and earnings. Manufacturing production has also performed so poorly in 2014 dashing any hopes of increased employment in the sector in the short term.

Secondly, the power crisis facing Eskom will compound the unemployment problem. The state owned power producer- Eskom is in multiple crisis including operational crisis, financial crisis and governance issues among others. This has reduced prospects of any expansion in various sectors of the economy as there will be no sufficient power to allow for such.

Thirdly the problem of demand and supply mismatch in the labour market continues to compound the unemployment problem. While there are many trained graduates- many of their skills are not what is required by industry. Enough of the bad news. If you are employed in the formal sector in South Africa- things have gotten better for you. Let’s look at why I say so.
According to StatsSA, gross earnings increased between the quarters ended June 2014 and September 2014. Gross earnings paid to employees in the formal non-agricultural sector during the quarter ended September 2014 amounted to R428 billion. This reflected a quarterly increase of R18, 9 billion (+4, 6 percent) compared with the quarter ended June 2014 and an annual increase of R30 billion (+7, 5 percent) compared with the quarter ended September 2013. Average monthly earnings, including bonuses and overtime payments, paid to employees in the formal non-agricultural sector increased by 3, 7 percent between May 2014 and August 2014. The September 2014 Quarterly Employment Statistics (QES) survey showed that an estimated monthly average of R15 770 was paid to employees in the formal non-agricultural sector during August 2014. This reflected a quarterly increase of 3, 7 percent between May 2014 and August 2014 and an annual increase of 6, 6 percent between August 2013 and August 2014.

This indicates that things have gotten better for the employed and the fall in inflation and oil prices leaves more cash in the hands of the employed to spend during this festive season.

However, there is little hope for the unemployed in South Africa as the economy continues to shrink and employers are reducing jobs. There is need for urgent rethink about where the jobs of 2015 will come from.

for more information contact info@atudandassociates.co.za

One comment

  • In the short term new jobs are most likely to come from continuing state creep! The public sector is already bigger than the private sector.
    In the not-too-distant future however the ripple-effect of continuing state creep has to be more red tape and inefficiency, lower business competitiveness, reduced outputs, fewer jobs ….
    So I agree that the unemployed stay in a bad place …

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