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The world’s biggest unemployment crisis is right here in South Africa

UASA Media Release: 3 September 2018

Presentation by Mike Schussler at the UASA 17th South African Employment Report

Click here to download Employment Report pdf

Despite South Africa’s past goals and targets to find solutions to its unemployment crisis, such the government’s plan to halve unemployment by 2014, the unemployment rate is not declining at all. Instead the number of unemployed 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 the inequality and poverty in the country, says economist Mike Schussler who presented the UASA 17th South African Employment Report (SAER) at the UJ Bunting Road Campus Johannesburg this morning.

“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,” Schussler said.

Schussler presented the UASA SAER findings against the backdrop of the stubbornly and increasing unemployment rate, very low economic growth, political and policy uncertainty and poor investor confidence.

The UASA SAER 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 SMME’s and SOE’s, and the prospects of success for Pres. Cyril Ramaphosa’s Job Summit.

Schussler pointed out hair-raising facts:

  • 9,6 million South Africans are unemployed according to the latest Labour Force Survey. The expanded definition includes people who have given up looking for work.
  • 6,1 million South Africans were physically looking for work and did not find any. This is according to the official definition which in 2017 made South Africa the country with the highest unemployment rate in the world.
  • While South Africans make up less than 1% of the world’s population, we make up 3,2% of the world’s unemployed.
  • South Africans makes up 22,1 million of the 3,382 billion people in the world’s labour force. This is less than two-thirds of one per cent of the world’s labour force and is due to a low participation rate as well as a younger than the average population.
  • However, the 6,1 million South Africans that are unemployed make up 3,2% of the world’s 190 million unemployed. This is nearly five times our labour force share.
  • South Africa’s expanded unemployment number is six time the relative size of its workforce number.
  • Working-age South Africans are six times more likely to be unemployed than the average adult worldwide.
  • The unemployment rate in South Africa is higher than that of the United States during the Great Depression when unemployment reached 25%.
  • The number of people unemployed by the expanded definition in South Africa is more than the number of unemployed by the expanded definition in the USA and German standard employment numbers combined. Combined the USA and Germany employ 12 times the number of people while their economies are about 60 times the size of the South African economy. Yet South Africa has more unemployed adults.

How do we solve unemployment?

Economic growth is the only sustainable way that South Africa can reduce unemployment numbers, Schussler said.

Over a 17 year period, the annual 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.

 

What will happen if South Africa plods along as before?

For growth to happen, South Africa needs to create macroeconomic stability and certainty.

“The problem is that if South Africa does not increase its growth rate then at the average rate of growth of the last 17 years, it will take more than a generation to reduce the unemployment rate to the international rate. This average international unemployment rate should be the goal that South Africa wants to achieve.

“No country in the world can tell its citizens that there will be massive unemployment for decades to come.

“We believe that setting an unemployment goal similar to the average rate of unemployment of the world is something the 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 said.

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.

This 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.

For further enquiries or to set up a personal interview, contact

Mike Schussler at 082 417 5542.

 

About UASA

UASA is one of several unions affiliated to the Federation of Trade Unions of South Africa (FEDUSA) which represents approximately 500 000 members at the macro level.

UASA is registered at the Department of Labour as a trade union in accordance with the Labour Relations Act 66 of 1995 as amended in 2002.

UASA is one of South Africa's oldest trade unions with a rich labour history dating back to 1894. The main objective of the Union is to look after the interest of its members and to foster a spirit of unison among workers in general. Our organisation has been formed by the workers, for the workers, to represent their rights and interests in the workplace and to improve working conditions and wages.  

UASA represents close to 60 000 working South Africans across the spectrum of job categories. 

UASA also plays an important role in the international labour arena, joining hands with various international federations that promote global solidarity among workers of the world in their struggle against the negative effects of globalisation. Through its affiliation with ITF and the International Trade Union Confederation (ITUC), UASA has active representation at various international forums.

Issued by: 

Helen Ueckermann

082 603 3335