Four bright spots in SA's lacklustre jobs market

Nick Hedley
  • 11 Months Ago
Under the immense weight of a corrupt and clueless state, South Africa's jobs market has deteriorated significantly over the past decade. There are, however, four noteworthy bright spots.

The government claims that jobs have been created. Indeed, they have, but not nearly enough to keep up with population growth, let alone to make any progress in driving down the unemployment rate.

In the 10 years to end-September 2023, the country's working-age population swelled by 7.4 million people, Statistics SA data shows. Yet only 2.7 million additional jobs have been created since September 2013.

This means that another 4.7 million adults have joined the ranks of the unemployed. Now, 24.1 million people between the ages of 15 and 64 are either searching for jobs that don't exist, have given up trying, or are not economically active for other reasons.

The unemployment rate, including those who've given up looking, has surged to 41.2%, from 35.6% a decade ago. And that's despite an unsustainable increase in the public sector workforce as the state sought to hire more people itself so as to mask its failures.

The mining and manufacturing industries have been particularly hard hit by relentless rolling blackouts and truly bizarre state policies, and that shows up in the jobs data. Even the number of private household jobs – for domestic workers and gardeners – has declined since September 2013, because fewer middle-class families can afford such luxuries.

This is all a tragedy, and is absolutely not sustainable, as we all know. The working age population is growing by nearly 600 000 people a year, which means we need to be creating a lot of jobs just to maintain the status quo.

Corruption

The ruling party's incompetence and corruption has taken its toll on an economy that, in theory, really doesn't need that much to succeed. South Africa has enviable natural resources, deep capital markets, innovative businesses, and a large workforce – all the ingredients needed for success.

What could've been if we'd had even a mildly capable and honest government. Yet, in spite of the ANC, there are some positives.

First, the agricultural sector continues to grow. The industry employs a quarter of a million more people than it did a decade ago.

Our resilient farmers have found a way to succeed despite ongoing challenges with the supply of water and electricity, and crumbling transport infrastructure.

The financial services sector, meanwhile, has added nearly 1 million jobs. It's a highly innovative sector, and one that's carrying the South African flag high as it extends its reach across the continent and beyond.

Third, the one province where the ANC isn't in charge has held up all right.

Even amidst all the load shedding, the Western Cape's expanded unemployment rate has actually declined marginally since September 2013, to 25.6%. The province has added nearly 900 000 jobs in 10 years, meaning it's delivered a third of all the new jobs created.

Minerals

For context, other provinces are generally a bloodbath. In the North West, the unemployment rate has surged to 51.2%, from 42.9%, despite the province's exceptional mineral resources.

In Gauteng – the nation's supposed economic engine room – the rate has soared to 39.4%, from 29%.

It's clear that where the ANC governs, unemployment grows. It's really that simple. What a pity that the DA, which runs the Western Cape, seemingly does what it can to chase would-be voters away.

The fourth bright spot is call centres – an often-overlooked industry in this country, despite being a big job creator in developing markets like India and the Philippines.

South Africa's business process outsourcing sector (which consists mainly of call centres) now provides more than 100 000 jobs – more than the coal mining industry.

Most of those are in the Western Cape, where the industry is highly organised and has lofty growth targets, but there's also been solid growth in eThekwini (mainly uMhlanga).

Most importantly, South Africa and its jobseekers cannot afford another term of ANC rule. And things could get even worse if the governing party forms a coalition with the populist EFF after next year's elections.

We also need to arrest the decline of the mining and manufacturing industries, which will require a resolution to the power crisis and smarter, or just less obtrusive, policy making. From there, our mining and manufacturing industries have a huge growth opportunity in the global energy transition.

In the interim, we must focus on the quick wins. Our agricultural and call centre industries are jobs-intensive, have plenty of room for growth, and can buffer against load shedding more easily than miners and factories can.-Fin24