Unemployment: Statistics not what they seem

2009-04-30 00:00

Given the current economic climate characterised by widespread job losses, it is quite difficult to find many reasons to celebrate Workers’ Day this year.

One prominent union spokesman, Jaco Kleynhans of Solidarity, told The Witness this week that as many as 200 000 people nationwide have lost their jobs since July 1, 2008.

A brief analysis of the latest official unemployment statistics in Stats SA’s quarterly labour force survey (QLFS) surprisingly reveals that the unemployment rate declined by 1,3% points to 21,9% in the final quarter of 2008.

However, this conceals the true nature of the crisis, which is more serious than many would like to believe.

At best, almost four million people were jobless in the final quarter of the year.

Unemployment still sits at more than 20% in eight provinces and hardly a dent was made into unemployment figures during 2008.

Currently sitting at 20,8%, unemployment in KZN remains a major challenge for policymakers and the private sector in the province.

The list of companies contemplating or implementing retrenchment processes continues to grow.

This trend, which began in the mining and manufacturing sectors, has spread across a variety of other sectors.

Standard Bank economist Shireen Darmalingam stressed that, even though the latest labour force survey statistics are encouraging, the performance is not sustainable in the current environment.

“The current slow-down in the economy will over the medium term put further stress on employment creation, especially in the informal sector of the economy, which roughly constitutes eight to 12% of GDP. The formal sectors of the economy are also under immense strain as demand is shrivelling.”

The lack of appropriately-skilled labour, poor or inadequate education and relatively high unit labour costs are also major challenges.

Dr Cees Bruggemans, FNB’s chief economist, believes that the latest unemployment figures point to a long-term trend related to the slumping productivity of our nation’s workforce.

The second half of 2008 “recorded a net gain of 115 000 jobs [0,8%] which, annualised, translates into 1,6% gain at a time when economic activity shrunk by at least 1,6% annualised”.

“If these trends carried on for long enough, one would end up with everyone employed, yet nobody producing anything, just like in real communist states.”

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