The lack of formal employment is a problem that currently affect a vast number of people worldwide. Unfortunately, the situation in South Africa regarding this matter is concerning, and the future ahead does not appear very encouraging.
The latest national unemployment rate presented by the National Statistics Agency of South Africa (Stats SA) was based on the first quarter of 2023. The report indicated that the rate reached 32.9%, showing a 0.2% increase compared to the fourth quarter of 2022.
“The number of unemployed people increased by 179,000 individuals, reaching 7.9 million during this quarter, compared to the 7.8 million registered at the previous one,” stated the agency in a press release. Moreover, they highlighted that this rise occurred after four consecutive quarters of decline in 2022.
The South African agency also reported that the number of salaried employees increased by 258,000 people, reaching a total of 16.2 million workers between January and March 2023. In this respect, the sectors with the highest levels of new hires were finance, community and social services, and agriculture.
Regarding job seekers, there was a decline of 87,000 applicants compared to the fourth quarter of 2022, resulting in a net decrease of 296,000 people in the country’s inactive population. Additionally, some companies also lost workers, especially those related to trade, mining, construction, and manufacturing industries.
Finally, the official Statistics South Africa also drew attention to the vulnerability of young people in the labor market, considering there was an increase of 241,000 unemployed youth, reaching 4.9 million.
In that vein Nedbank, considered one of the main South African banks, stated that the total employment rate remains below pre-Covid-19 levels but has gradually increased. It’s worth noting that official statistics have been published quarterly since 2008.
Moreover, the International Monetary Fund (IMF) also carried out an analysis of unemployment and presented its forecasts for 2023, considering rising inflation, increased interest rates, and economic slowdown. In this context, they indicated that these factors would cause an increase in the unemployment rate, especially in industrialized countries undergoing drastic structural changes.
Unfortunately, South Africa reappears in this IMF analysis, and in a rather negative light. Specifically, it is projected that the country’s unemployment rate would reach 35.6% in 2023, a consequence of slow economic growth and strict labor laws hindering worker hiring.
In addition to the unemployment issue, South Africa’s population is also experiencing high inflation levels. Although inflation has been decreasing in recent months -reaching 5.9% in May- it still affects millions of workers and further harms the poor.
Abigail Moyo, spokesperson for the trade union United Association of South Africa (UASA), said in an interview: “For years, workers have been facing economic pressures beyond their control. With items like maize flour rising 36.5% since last year’s January, onions 48.7%, shampoo 29.6%, and instant coffee 26.4%, it’s clear that tough times are not over for households.”
ILO’s Forecasts and Actions
This year, the International Labour Organization (ILO) Director-General, Gilbert F. Houngbo, made his first official visit to South Africa, emphasizing the need to work towards greater social justice in the country. He also assured that this would contribute to reducing and preventing inequalities and that he would seek to promote the formulation of national and global policies and activities for this purpose.
“We owe it to our future generations to coordinate efforts to realize a fair and safe working environment that leaves no one behind, and that is what social justice is all about… Social justice helps societies, economies, and households become more resilient to socioeconomic, environmental, geopolitical instability, and global health crises,” said Houngbo.
It is essential to note that the ILO asserted that the number of unemployed people worldwide would decrease during 2023. “According to projections based on the most recent ILO estimates, the global unemployment rate will decline by 0.1 percentage point in 2023 to reach a 5.3% rate,” revealed the organization based in Geneva.
There were 192 million people without formal employment worldwide in 2022, a number that would decrease to 191 million in 2023. The report from the international body shows that Latin America and the Caribbean belong to the group of regions that managed to reduce their unemployment rates below pre-Covid-19 levels.
This situation is also observed in Northern, Western, and Southern Europe, as well as in Central and Western Asia. However, in other regions such as North Africa, Sub-Saharan Africa, and some Arab states, the reality is different, as they have not yet returned to pre-pandemic levels.
Given all these circumstances, South Africa needs to take actions that promote both formal employment and job seeking, as the lack of opportunities leads many to opt for informality, another difficult problem to eradicate. All this aside from how the lack of decent work affects the quality of life for countless families, who struggle to subsist with very little or seek alternatives like loans to cope with certain situations.