Despite South Africa’s past goals and targets to find solutions to its unemployment crisis, such as the government’s plan to halve unemployment by 2014, the unemployment rate is not declining at all.
Instead the number of unemployed people has increased from 6-million to 9.6-million between 2001 and 2018.
This is a 60% increase in the broader rate of unemployment, which has had a devastating effect on inequality and poverty in the country, economist Mike Schussler said during a presentation of Uasa’s seventeenth South African Employment Report (SAER), at the University of Johannesburg School of Hospitality and Tourism, in Johannesburg, on Monday.
“South Africa is one of the few countries in the world where there are more adults not at work than adults at work. Along with other factors, such as single female-headed households, this low number of employed results in much of South Africa’s poverty and inequality.
“The magnitude of the crisis is the single biggest crisis facing South Africa. South Africa is the only country that our research finds has had a 20%-plus unemployment rate for over two decades,” he pointed out.
Schussler presented the SAER findings against the backdrop of the stubbornly high and increasing unemployment rate, low economic growth, political and policy uncertainty and poor investor confidence.
His presentation touched on what can be done creatively to grow the economy and thereby create employment opportunities, blockages in the way of job creation, the role of small and medium-sized enterprises and State-owned entities, and the prospects of success for President Cyril Ramaphosa’s Job Summit.
While South Africans make up less than 1% of the world’s population, they make up 3.2% of the world’s unemployed. South Africa’s expanded unemployment number is six times the relative size of its workforce number.
Schussler lamented that working-age South Africans are six times more likely to be unemployed than the average adult worldwide.
Economic growth is the only sustainable way that South Africa can reduce unemployment numbers, he said.
“Over a 17-year period, the yearly gross domestic product (GDP) growth rate has averaged twice the employment growth rate. The rate of GDP growth in many other international regions and countries seems to be about twice the employment growth rate over the long term, too.”
For growth to happen, South Africa needs to create macroeconomic stability and certainty.
“We believe that setting an unemployment goal similar to the average rate of unemployment of the world is something South Africa and its people should strive for, at least in the long term, even if we know that it will probably take decades to reach it,” Schussler averred.
With sensible economic policies, this is something that South Africa can set out to achieve in the next two and a half decades as a realistic goal, within the expected population growth and relatively sustainable growth rates.
That said, a 5.5% average unemployment rate in South Africa in 2043 would still mean that about 1.8-million adults would be unemployed by then, Schussler stated.