Explainer: Why South Africa's unemployment is worse than we thought

Explainer: Why South Africa's unemployment is worse than we thought

- New statistics put South Africa's unemployment rate at a staggering 29%

- However, when one uses the expanded definition of unemployment, the situation is actually considerably worse

- This is because official definitions exclude those who want to work but are not actively looking for a job

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Recent figures released by Stats SA show that the unemployment rate increased by 1.4% of the second quarter of 2019 to 29%  -  the highest it has been since 2008.

However, some economists say that a closer look at the numbers paints an even bleaker picture.

This is because these statistics do not count people who are not actively looking for work. When the stats expand to include those who say they want a job but are not currently looking for one, the unemployment is even higher.

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When this expanded definition of unemployment is used, the South African unemployment actually stands at a whopping 38.5%, Briefly.co.za has gathered. This is 3.5 million more jobless people than one would assume based on the official statistics, which put the number at 6.7 million, according to the Mail & Guardian.

For all Cyril Ramaphosa's talk of a 'New Dawn', unemployment in the country is actually worsening, whether one uses official definitions of joblessness or the expanded definition. 

According to UCT economics professor Vimal Ranchhod, there are a number of factors driving South Africa's unemployment (which is consistently among the highest in the world).

One of these is the legacy of apartheid, which prevented many black South Africans from acquiring skills and high-status jobs and created an oversupply of cheap labour, especially in mining and agriculture.

As these industries gradually became more mechanised, the demand for unskilled labour dropped and left many unemployed.

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This problem has since been compounded by a lack of foreign investment in South Africa. The relatively high supply of unskilled labour in the country would usually attract investment, but other factors drive it away. 

Ranchhod says these factors include "threats to property rights, social and political instability, and perceived levels of corruption", among others.

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Source: Briefly.co.za

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