Relief in South African unemployment

According to the latest Quarterly Labour Force Survey as published by Statistics South Africa on 7 February 2012, South Africa has achieved a significant victory in the fight against unemployment. The Survey points out that the number of unemployed persons declined by 4, 5 % (198 000) from the third quarter to the fourth quarter of 2011. However, compared to the previous year (fourth quarter of 2010) unemployment has risen by 2, 6% (107 000) during the fourth quarter of 2011.

Looking at the employed persons from previous quarter (third quarter 2011) to the fourth quarter of the same year, there is an increase of 1, 3% (179 000) jobs. Compared to the previous year the number of employed persons also increased by 2, 8% (365 000) during the fourth quarter 2011.

The unemployment rate (calculated as the number of unemployed persons as a percentage of the labour force) declined by 1, 1% from 25, 0% in the third quarter to 23, 9% in the fourth quarter of 2011. Although certain sectors of the economy such as Community and Social  services, Manufacturing and Trade did contribute to this downward movement in the rate of unemployment, the significant rise in the number of discouraged workers from the third quarter is a disturbing factor. According to the Survey the labour force decreased by 20 000 from the third quarter to the last quarter of 2011. The main contributing factor to that decline of the labour force is the fact that the economically inactive population increased by 134 000, of which 111 000 was discouraged job-seekers.

As much as the figures show a promising picture about unemployment, it is still early days for celebrations. What the Survey also tells us is that the majority of our active job-seekers are becoming discouraged to go and look for work, hence the decline in the economically active population (labour force). As these people are leaving the labour force their lives are not better off.

Finally, if we use the expanded definition of unemployment we find that the unemployment rate has indeed fallen from the third quarter to the fourth quarter, but the magnitude of the fall is not as pronounced as the official figures portray. For instance, from the third quarter to the fourth quarter of 2011 the number of unemployed (including discouraged workers) declined by 0.6% (87 000) from 33, 3% to 32, 7 respectively. This means that as a country we are beginning to have a slight impact on unemployment.