7.9 Million South Africans Jobless, Wits Economist Says Increase in Unemployment Is Concerning
- Statistics SA revealed that the number of unemployed South Africans rose in the last quarter
- The unemployment rate went up from 31.9% to 32.1%, with almost eight million people now jobless
- Dr Kenneth Creamer from Wits University’s School of Economics spoke to Briefly News about the causes of the increase
With seven years at Daily Sun and Vutivi Business News, Tebogo Mokwena, a Briefly News journalist, provided coverage of current affairs news, shedding light on critical social infrastructure challenges and unemployment.
Do you have a hard news story you would like to share? Email tebogo.mokwena@briefly.co.za with 'CA' in the subject line.
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According to Statistics SA, the unemployment rate increased from 31.9% to 32.1% in the previous financial quarter.
In an interview with Briefly News, Dr Kenneth Creamer from the School of Economics and Finance at the University of the Witwatersrand voiced concern about the increase. He mentioned that the rise in unemployment results from the economy heading in the wrong direction.
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He also shared why the economy struggles to accomodate those looking for work.
The unemployment rate increased in the fourth quarter
According to the statistics released by StatsSA, the number of unemployed people increased by 46,000 to 7.9 million. The stats also showed that 22,000 employed South Africans lost their jobs in this period.
“The fact that employment levels fell, driven in the main by a fall in formal sector employment, after eight consecutive quarters of employment growth, is very concerning as it indicates that even the limited growth that the economy has experienced in recent years, is beginning to falter and move in the wrong direction.
"The situation is likely to get worse as a number of large mining and industrial companies have announced the possibility of closures and retrenchments,” Dr Creamer said.
SA economy growing too slowly to employ new entrants into labour market
Economist Dr Creamer said the economy is growing too slowly to hire new graduates who have just joined the labour market.
“Generally, in recent years, the number of people in employment has been rising, and at the same time, unemployment has increased. This is because the economy has been growing, but growing too slowly to absorb new entrants into the labour market."
Dr Creamer said this is why youth unemployment is so stubbornly high at 39% for people aged between 25 and 24, compared to an overall unemployment rate of 32,1% for all working-age people between 15 and 64.
Dr Creamer said the slow pace of creating employment is driven by the low rate of economic growth, which is a consequence of low investment levels. This is largely due to various constraints, including loadshedding, failing rail and logistics systems and poor government service delivery.
"Government efforts to place more young people into employment, such as the Presidential Employment Stimulus and the Youth Employment Service, are a step in the right direction, but they are being held back by extremely difficult macroeconomic conditions, including stagnant growth and low levels of investment."
Amplats, Kumba Iron Ore to retrench workers
Similarly, Briefly News reported that Amplats and Kumba Iron Ore are expected to retrench thousands.
According to the National Union of Mineworkers, Anglo-American Platinum is expected to lay off 3,700 workers and Kumba Iron is looking to retrench 500 workers.
South Africans lamented the negative impact of the retrenchments, pointing out that they will have far-reaching consequences.
Source: Briefly News
