South African Labour Market Update
Loane Sharp2012
Unemployment stats• One of post-apartheid’s greatest disappointments is the economy’s failure to
create jobs – 13% unemployment in 1994 to 37% currently• Official labour force size: 17.4 million of which 13 million formally employed
• 4.4 million South Africans are currently unemployed• 2.0 million permanently discouraged about their prospects of finding
work• 2.1 million people underemployed (Stats SA)
• 2.7 million (61%) of those officially unemployed have been out of work for more than a year
• Nearly half (46%) of the economically active population is idle, with a staggering proportion (74%) of these under the age of 24
• By any measure, unemployment is easily South Africa’s most pressing socioeconomic problem
• Who are the unemployed?• Youth, black African, never worked before
Economic activity and employment
Data sources: South African Reserve Bank, Statistics SA.
50
100
150
200
250
300
350
400
450
0
100
200
300
400
500
600
700
800
1940
1944
1948
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
Tota
l Non
-Agr
icul
tura
l Em
ploy
men
t (1
940-
1944
=100
)
Econ
omic
Acti
vity
(Gro
ss D
omes
tic P
rodu
ct at
mar
ket p
rices
, con
stan
t 200
5 pr
ices
, 194
0-19
44=1
00)
Economic activity
Employment
Problems• Disaffected youth• Increased levels of crime• Political instability and the rise of radicalism• “Xenophobia”• HIV/Aids, alcohol and drug abuse• Significant drain on the country’s financial resources (social grants, NHI, etc)
Causes• Restrictive labour legislation – 138th out of 142 by World Economic Forum• Wage inflation decoupled from labour productivity
• Average wage settlements 2011 – 9.1% (2010 – 8.2%)• Militant trade union activism
• Working days lost due to strike action rose from 2.9m days in 2009 to 14.6m day in 2010
• Education and training not delivering• Regional conflicts resulting in unchecked immigration
Adcorp Employment Index
Adcorp Employment Index
Data source: Adcorp Analytics.
80
85
90
95
100
105
110
Adco
rp E
mpl
oym
ent I
ndex
(200
5=10
0)
Typical and atypical employment
Typical employment
Data source: Adcorp Analytics. Data source: Adcorp Analytics.
Atypical employment
80
85
90
95
100
105
110
Perm
anen
t em
ploy
men
t (20
05=1
00)
0
20
40
60
80
100
120
140
160
180
Tem
pora
ry e
mpl
oym
ent (
2005
=100
)
Skills shortages
Skills shortage by occupation
Data source: Adcorp Analytics.
Data source: Adcorp Analytics.
Skilled workers’ remuneration
Occupation Skillsshortage (000s)*
Manager 216.2Professional 178.4Technician 432.1Clerk 86.6Sales and service worker 104.3Skilled agriculture 3.1Craft and related trade 65.5Plant and machine operator 72.0Elementary worker -967.6Domestic worker -247.4Total -56.8
R 0
R 50 000
R 100 000
R 150 000
R 200 000
R 250 000
R 300 000
R 350 000
R 400 000
R 450 000
R 500 000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Average after-inflation remuneration -high-skilled workers (Rands)
Immigrations Act (2002)
Labour vs. capital
Usage of labour and capital
Data sources: South African Reserve Bank, Statistics SA.
0
100
200
300
400
500
600
700
800
900
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
Usage of capital
Usage of labour
Labour vs. capital productivity
Labour productivity
Data sources: South African Reserve Bank, Statistics SA. Data sources: South African Reserve Bank, Statistics SA.
Capital productivity
0.10
0.74
0.31
-0.08-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
1970s 1980s 1990s 2000s
Perc
ent i
ncre
ase
in o
utpu
t due
to a
uni
t pe
rcen
t inc
reas
e in
labo
ur in
put
Labour productivity
0.15 0.14
0.20
0.44
0.0
0.1
0.1
0.2
0.2
0.3
0.3
0.4
0.4
0.5
0.5
1970s 1980s 1990s 2000s
Perc
ent i
ncre
ase
in o
utpu
t due
to a
uni
t pe
rcen
t inc
reas
e in
cap
ital i
nput
Capital productivity
Migrating to the informal sector?
Number of people running their own small businesses
Data source: Statistics SA.
0
500 000
1 000 000
1 500 000
2 000 000
2 500 000
3 000 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
No. running own business
0
50 000
100 000
150 000
200 000
250 000
300 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
No. trying to start own business
Data source: Statistics SA.
Number of people trying to start their own businesses
Affirmative action
Number of high-income Blacks
Data source: Statistics SA. Data source: Statistics SA.
Average Black income
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Number of high-income black South Africans (number earning more than the average white income)
0%
5%10%
15%20%25%
30%35%40%
45%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Average black income (percentage of average white income)
Declining union membership
Unionization rate
Data source: Statistics SA. Data source: Statistics SA.
Unionization rate by sector
26%
27%
28%
29%
30%
31%
32%
33%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Unionization rate (percentage of workforce unionized)
4.4%
80.7%
33.6%
55.2%
11.3%19.2%
36.7%
19.8%
59.5%
0.6%0%
10%20%30%40%50%60%70%80%90%
Agric
ultu
re, h
untin
g,fo
rest
ry a
nd fi
shin
g
Min
ing
and
quar
ryin
g
Man
ufac
turin
g
Elec
tric
ity, g
as a
ndw
ater
supp
ly
Cons
truc
tion
Who
lesa
le a
nd re
tail
trad
e
Tran
spor
t, st
orag
ean
d co
mm
unic
ation
Fina
ncia
lin
term
edia
tion,
…
Com
mun
ity, s
ocia
lan
d pe
rson
al se
rvic
es
Priv
ate
hous
ehol
ds
Unionization rate per sector
Strikes and intimidation
Data source: Statistics SA. Data source: Statistics SA.
Strike participation rate Intimidation-related absenteeism
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2006 2007 2008 2009 2010 2011
Strike participation rate (% of union members)
28 405
77 259
52 832
135 304
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
2008 2009 2010 2011
No. citing violence, unrest orintimidation as the primaryreason for not workingduring the year
The trouble with Statistics SA’s estimates
Variable
Statistics SA estimate (QLFS
Q4 2011)Actual/verified
figure Source for actual/verified figureUndercount
(percent)
No. of taxpayers (individuals and businesses) 7 263 092 7 998 794 SA Revenue Service Tax Statistics 2011 9.2%No. of business owners 1 969 767 5 579 767 The Business Trust (2011) 64.7%Net new business taxpayers 354 694 – SARS Tax Amnesty 2003-2010 17.1%Net new individual taxpayers 2 512 397 – SARS Tax Amnesty 2003-2010 42.2%No. of businesses registered for VAT (active businesses only) 574 928 664 267 SA Revenue Service Tax Statistics 2011 13.4%Percent of employees reporting PAYE/SITE deductions by their employers 57.0% 70.0% SA Revenue Service Tax Statistics 2011 13.0%Percent of employees reporting UIF deductions by their employers 58.0% 77.4% SA Revenue Service Tax Statistics 2011 19.4%No. of individual UIF contributors 6 602 197 7 919 290 Unemployment Insurance Fund Annual Report 2011 16.6%No. of UIF recipients 80 577 183 040 Unemployment Insurance Fund Annual Report 2011 56.0%No. of medical aid or health insurance principal members 3 712 168 3 612 062 Council for Medical Schemes Annual Report 2011 -2.8%Compensation of employees (R millions) 1 066 370 1 317 655 Statistics SA GDP Q4 2011 19.1%No. reporting did not know/specify or refused to disclose income 1 045 730 – Statistics SA QLFS Q4 2011 23.7%No. receiving wage increments in line with Bargaining Council agreements 1 035 320 1 765 230 National Association of Bargaining Councils (2011) 41.3%No. receiving social grants (old age, veteran, child support, etc.) 11 500 132 15 028 969 SA Social Security Agency Statistical Report No. 41 (p. 8) 23.5%No. underemployed (vs. no. willing to work additional hours/do extra work) 524 998 2 051 894 Statistics SA QLFS Q4 2011 74.4%
Average undercount (percent) 28.7%
Data sources: Statistics SA Quarterly Labour Force Survey (2001-2011). Other sources as indicated.