South African Labour Market Update
Loane Sharp
2012
Unemployment stats
• One of post-apartheid’s greatest disappointments is the economy’s failure to
create jobs – 13% unemployment in 1994 to 37% currently
• Official labour force size: 17.4 million of which 13 million formally employed
• 4.4 million South Africans are currently unemployed
• 2.0 million permanently discouraged about their prospects of finding
work
• 2.1 million people underemployed (Stats SA)
• 2.7 million (61%) of those officially unemployed have been out of work for
more than a year
• Nearly half (46%) of the economically active population is idle, with a
staggering proportion (74%) of these under the age of 24
• By any measure, unemployment is easily South Africa’s most pressing
socioeconomic problem
• Who are the unemployed?
• Youth, black African, never worked before
2008
2004
2000
1996
100
1992
1988
1984
1980
1976
1972
1968
1964
1960
1956
1952
1948
1944
1940
Economic Activity (Gross Domestic Product at market prices, constant 2005
prices, 1940-1944=100)
800
450
700
400
600
350
500
300
400
250
300
200
200
Economic activity
150
Employment
100
0
50
Data sources: South African Reserve Bank, Statistics SA.
Total Non-Agricultural Employment (1940-1944=100)
Economic activity and employment
Problems
•
•
•
•
•
•
Disaffected youth
Increased levels of crime
Political instability and the rise of radicalism
“Xenophobia”
HIV/Aids, alcohol and drug abuse
Significant drain on the country’s financial resources (social grants, NHI, etc)
Causes
• Restrictive labour legislation – 138th out of 142 by World Economic Forum
• Wage inflation decoupled from labour productivity
• Average wage settlements 2011 – 9.1% (2010 – 8.2%)
• Militant trade union activism
• Working days lost due to strike action rose from 2.9m days in 2009
to 14.6m day in 2010
• Education and training not delivering
• Regional conflicts resulting in unchecked immigration
Adcorp Employment Index
Adcorp Employment Index (2005=100)
Adcorp Employment Index
110
105
100
95
90
85
80
Data source: Adcorp Analytics.
Typical and atypical employment
Typical employment
Atypical employment
180
Temporary employment (2005=100)
Permanent employment (2005=100)
110
105
100
95
90
85
80
160
140
120
100
80
60
40
20
0
Data source: Adcorp Analytics.
Data source: Adcorp Analytics.
Skills shortages
Skilled workers’ remuneration
Skills shortage by occupation
R 500 000
R 450 000
R 400 000
R 350 000
R 300 000
R 250 000
R 200 000
R 150 000
R 100 000
Average after-inflation remuneration high-skilled workers (Rands)
R 50 000
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
R0
1999
Data source: Adcorp Analytics.
Immigrations
Act (2002)
1998
Manager
Professional
Technician
Clerk
Sales and service worker
Skilled agriculture
Craft and related trade
Plant and machine operator
Elementary worker
Domestic worker
Total
Skills
shortage (000s)*
216.2
178.4
432.1
86.6
104.3
3.1
65.5
72.0
-967.6
-247.4
-56.8
1997
Occupation
Data source: Adcorp Analytics.
Labour vs. capital
Usage of labour and capital
900
Usage of capital
800
Usage of labour
700
600
500
400
300
200
100
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
0
Data sources: South African Reserve Bank, Statistics SA.
Labour vs. capital productivity
Capital productivity
Labour productivity
0.5
0.74
Labour productivity
0.7
0.6
0.5
0.4
0.31
0.3
0.2
0.10
0.1
0.0
-0.1
-0.08
-0.2
1970s
1980s
1990s
2000s
Data sources: South African Reserve Bank, Statistics SA.
Percent increase in output due to a unit
percent increase in capital input
Percent increase in output due to a unit
percent increase in labour input
0.8
0.5
0.44
Capital productivity
0.4
0.4
0.3
0.3
0.2
0.20
0.15
0.2
0.14
0.1
0.1
0.0
1970s
1980s
1990s
2000s
Data sources: South African Reserve Bank, Statistics SA.
Migrating to the informal sector?
Number of people trying to start
their own businesses
Number of people running their own
small businesses
3 000 000
300 000
2 500 000
250 000
2 000 000
200 000
1 500 000
150 000
1 000 000
100 000
500 000
50 000
No. running own business
No. trying to start own business
0
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Data source: Statistics SA.
Data source: Statistics SA.
Affirmative action
Average Black income
Number of high-income Blacks
45%
1 400 000
40%
1 200 000
35%
1 000 000
30%
800 000
25%
600 000
20%
15%
Data source: Statistics SA.
10%
Average black income (percentage
of average white income)
5%
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
0%
2001
2011
2010
2009
2008
2007
2006
2005
2004
2003
2001
2000
0
2002
Number of high-income black South Africans (number
earning more than the average white income)
200 000
2000
400 000
Data source: Statistics SA.
Declining union membership
Unionization rate by sector
Unionization rate
Data source: Statistics SA.
Private households
Community, social
and personal services
26%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Financial
intermediation,…
Unionization rate (percentage of workforce unionized)
0.6%
Transport, storage
and communication
27%
4.4%
19.8%
19.2%
Wholesale and retail
trade
28%
11.3%
Construction
29%
36.7%
Electricity, gas and
water supply
30%
59.5%
33.6%
Manufacturing
31%
Unionization rate per sector
55.2%
Mining and quarrying
32%
80.7%
Agriculture, hunting,
forestry and fishing
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
33%
Data source: Statistics SA.
Strikes and intimidation
Strike participation rate
10%
Strike participation rate (% of union members)
9%
Intimidation-related absenteeism
160 000
140 000
8%
120 000
7%
No. citing violence, unrest or
intimidation as the primary
reason for not working
during the year
135 304
100 000
6%
5%
77 259
80 000
4%
3%
60 000
2%
40 000
1%
52 832
28 405
20 000
0%
2006
2007
2008
2009
2010
2011
0
2008
Data source: Statistics SA.
2009
2010
2011
Data source: Statistics SA.
The trouble with Statistics SA’s estimates
Variable
Statistics SA
estimate (QLFS Actual/verified
Q4 2011)
figure
Source for actual/verified figure
No. of taxpayers (individuals and businesses)
7 263 092
7 998 794
SA Revenue Service Tax Statistics 2011
No. of business owners
1 969 767
5 579 767
Net new business taxpayers
Net new individual taxpayers
354 694
9.2%
The Business Trust (2011)
64.7%
–
SARS Tax Amnesty 2003-2010
17.1%
–
SARS Tax Amnesty 2003-2010
42.2%
574 928
664 267
SA Revenue Service Tax Statistics 2011
13.4%
Percent of employees reporting PAYE/SITE deductions by their employers
57.0%
70.0%
SA Revenue Service Tax Statistics 2011
13.0%
Percent of employees reporting UIF deductions by their employers
58.0%
77.4%
SA Revenue Service Tax Statistics 2011
19.4%
6 602 197
7 919 290
Unemployment Insurance Fund Annual Report 2011
16.6%
No. of businesses registered for VAT (active businesses only)
No. of individual UIF contributors
No. of UIF recipients
2 512 397
Undercount
(percent)
80 577
183 040
Unemployment Insurance Fund Annual Report 2011
56.0%
No. of medical aid or health insurance principal members
3 712 168
3 612 062
Council for Medical Schemes Annual Report 2011
-2.8%
Compensation of employees (R millions)
1 066 370
1 317 655
Statistics SA GDP Q4 2011
19.1%
No. reporting did not know/specify or refused to disclose income
1 045 730
Statistics SA QLFS Q4 2011
23.7%
National Association of Bargaining Councils (2011)
41.3%
SA Social Security Agency Statistical Report No. 41 (p. 8)
Statistics SA QLFS Q4 2011
23.5%
74.4%
No. receiving wage increments in line with Bargaining Council agreements
No. receiving social grants (old age, veteran, child support, etc.)
No. underemployed (vs. no. willing to work additional hours/do extra work)
Average undercount (percent)
–
1 035 320
1 765 230
11 500 132
524 998
15 028 969
2 051 894
28.7%
Data sources: Statistics SA Quarterly Labour Force Survey (2001-2011). Other sources as indicated.