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How SA is being lied to about unemployment

23 January 2013, 09:31

It is funny when ANC leaders talk about political consciousness and the ability to act as it has been distinctly missing during the rule of the ANC. If one considers how the many aspects of the country under the direct influence of the ANC have suffered it becomes difficult to see how any claim of success can be made by such a government.

But it is also not surprising that the spin-doctoring propaganda machine would try and obscure the many failures of the current government.

So let’s cut through all the rubbish and political campaigning and look at some hard facts about the government’s performance and the state of our country.

South Africa has a population of roughly 50 million people. Statistics South Africa sates that around 17 million of those people are economically active of which close to 13 million are employed leaving more than 4 million people unemployed resulting in an official unemployment rate of approximately 25% which is unfortunately already significantly higher than any other comparable developing country. If one looks at young black African South Africans many of whom have spent the majority of their lives under a free democratic South Africa controlled by the ANC, the unemployment figure shockingly exceeds 50%.

To make things worst these numbers that politicians frequently quote are as a matter of fact complete rubbish and it is just the ANC propaganda machine presenting half-truths again in an attempt to glaze over the true magnitude of their failures. One aspect that is rarely quoted during the reporting of these statistics is our low labour market participation rate. The labour market participation measures the number of economically active people as a proportion of the working age population which as mentioned before stands at 17 million. This figure does not take into account discouraged workers that have given up looking for work and does not take into account people that are not economically active some of which whom are perfectly capable of working.

As many economist, like Mike Shussler, have pointed out our market participation rate stands at roughly 55% which is between 10-15% lower than comparable developing economies. The rate has also dropped by 10% or six percentage points over the past decade from 61% to 55%. A glance at the official statistics shows that the working age population grew by 4.1 million over the past decade; however 3.4 million of those people were classified as not economically active over the same period of time. Government stats further only classified 114 0000 of those 3.4 million as so-called discouraged workers, sweeping the majority of them under the blanket term of not economically active.

It does not take a rocket science to figure that the data seems tampered with, since the number of economically active people, or in other words those who start looking for work, should typically have grown at the same rate as the actual working population grew. Instead only a paltry 538,000 people supposedly entered the workforce. The maths simply does not add up.  
By changing the definitions of how these stats are presented the ANC has managed to significantly bring down the official unemployment numbers for years and hide the truth of the matter that under their rule our unemployment rate in reality has for some time exceeded 30% and more.

To see how much the government massages these facts to hide this fact one only has to compare South Africa's labour force participation rate with that of other countries to find that South Africa’s stated labour force participation rate is one of the lowest in the world today. As Mike Shussler has pointed out we are down amongst countries such as Iraq, the occupied Palestinian territories, Iran, Egypt and Tunisia. As one can see the countries with very low labour force participation rates are generally either wall zones or countries where Muslims believe that woman should not work and therefore exclude a large segment of their population.

The so called employed part of the labour force as a percentage of the adult population in the country is also one of lowest in the world today. In fact not only does South Africa have one of the lowest employment rates in the world it also has one of the lowest employment rates in the history of the world, despite the fact that labour is very well protected in South Africa. 
So it is that the burden comes down to tax payers. But the situation there is equally bleak.

Of the close to 13 million people employed in South Africa approximately 5 million pay income tax the bulk is contributed by round about 1.2 million individuals. Of course other forms of taxation such as VAT and Fuel Levies touch the non-taxpaying base, but the largest income source still remains personal and company income tax. And there is no denying that South Africa has an immensely small tax base to carry the expenditure of the country. A tax base that is continually being eroded away by a large rate of emigration of taxpaying citizens that no longer feels welcome in the country.

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