Unpacking the Labour Market

Statistics South Africa (Stats SA) reported its highest unemployment rate since 2005, in the first quarter (Q1) of 2016. The unemployment rate currently stands at 26.7% – this means that only 43% of South Africans of working age (16– 65) are employed. Current global economic conditions and those within South Africa are not conducive to economic growth and this has been the main cause of this increase in the unemployment rate.

However, looking more closely at the data yields interesting results about how the South African labour market has progressed in terms of transformation between 2008 and 2016.

The working age population in South Africa has increased by 15% between Q1 of 2008 and Q1 of 2016. Males have experienced the largest increase as well as the black race group having the largest increase across all races. All races other than the white race group have increased working age populations in 2016 compared to 2008 as shown in Figure 1.

Figure 1: Working Age Population Demographics in Sount Africa 2008 to 2016

*Source: Stats SA

The South African unemployment rate has increased by 15% between Q1 2008 and Q1 2016. In terms of gender, men have experienced the largest increase in their unemployment rate as well as the white race group having experienced the largest percentage increase of the different races (albeit off of a low base) as shown in Figure 2.

Figure 2: Unemployment Numbers in South Africa for 2008 to 2016

Figure 3: Employment Numbers in South Africa from 2008 to 2016

Looking at this analysis of the labour market, it indicates that transformation in the South African economy is happening at both race and gender levels. The number of men of working age has increased faster than women yet the number of employed women has increased at a faster rate than men. This is supported by the change in the men’s unemployment rate which has increased at twice the rate of women.*Source: Stats SA

Performing the same analysis on race shows that all race groups other than whites experienced an increase in their population of working age. The white race group also experienced the largest increase in its unemployment rate and were the only race group to have a decline in their number of employed people.

The strong performance of women and the previously disadvantaged race groups compared to men and the white race group indicates that the demographics of the economy is changing in line with the goals of transformation.

 Conclusion

Although transformation is clearly in full force, it does not mitigate the effect of employment rates growing at a slower rate than the growth in the working population. This means that South Africans in general are not gaining overall in economic terms.

Written by:

Bryden Morton
Data Manager
B.Com (Hons) Economics
[email protected]

Chris Blair
CEO
B.Sc Chem. Eng., MBA – Leadership & Sustainability
[email protected]