SA’s Unemployment Rate Remains a Concern on Workers’ Day, Stellenbosch Professor Weighs In on Issue

• South Africa’s unemployment rate remains a talking point as the country celebrates Workers’ Day
• Professor Dieter von Fintel from the University of Stellenbosch spoke about the current situation in the country
• The professor from the Department of Economics also noted what needed to be done to improve the situation

Briefly News journalist Byron Pillay has dedicated a decade to reporting on the South African political landscape, crime, and social issues. He spent 10 years working for the Northern Natal Courier before transitioning to online journalism.

As South Africa marks Workers’ Day, questions remain about whether there is much to celebrate.

The unemployment rate in the country is hovering around the 31.9% mark, and opposition parties have criticised the African National Congress for failing to do anything to turn the situation around.

According to the South African government, the youth (15 to 34) remain the most vulnerable when it comes to jobs, with at least 4,8 million youth unemployed as of the third quarter of 2024. With the youth unemployment rate at 45.5%, there’s little hope for youngsters entering the job market.

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Stellenbosch University professor weighs in on the situation

Speaking exclusively to Briefly News, Professor Dieter von Fintel from the Department of Economics at the University of Stellenbosch broke down the situation in the country and what needed to happen to change it.

Addressing the issue of unemployment, Professor von Fintel noted that the formal sector was the country’s biggest job creator, but it had reached capacity.

“Usually in emerging markets in the Global South, workers who cannot be absorbed into the formal sector go into urban informal work or the rural smallholder farming sector. But we have low absorption into those sectors,” he noted.

He added that the pressure would grow on the formal sector to create jobs, and the ability to do so will become harder, especially if job seekers do not adapt their skillsets to the demands of generative artificial intelligence (AI).

“First-time job seekers are finding it hard to break into the job market, and they will have to differentiate themselves to be first in line and to build successful career trajectories.”

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Professor Dieter von Fintel warns of challenges created by AI

The professor also warned that the youth needed to adapt to the challenges created by AI. He noted that if the red tape and costs of doing business didn’t reduce, more businesses would turn to using technology to do the work that people could of.

“South Africa should focus on creating a future-ready workforce that can adapt to the challenges created by AI and existing structural barriers in the labour market,” he said.

Professor believes more can be done

With the country marking Workers’ Day, Professor von Fintel said that policymakers and trade unions needed to promote entrepreneurship, and the hard and soft skills required to generate self-employment going forward.

He explained that large business was still the dominant employment creator in the country, and if large businesses were under pressure, then so would be the job market.

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“This risk will be spread if it also becomes easier for many small businesses to emerge and to create jobs,” he noted.

Unemployment rate drops in 2024

Briefly News reported that the unemployment rate dropped from 32.1% in Q3 of 2024 to 31.9% in Q4 of 2024.

Stats SA noted that the Western Cape, KwaZulu-Natal and Gauteng accounted for the largest increases in employment.

South Africans didn't believe the stats and accused Stats SA of lying to the people about the true state of things.

Source: Briefly News