Run on Numbers: Unemployment rate in SA has disturbing stats

Published Mar 11, 2024


“I have a dream that my four little children will one day live in a nation where they will not be judged by the colour of their skin but by the content of their character … we will be able to speed up that day when all of God’s children, black men and white men, Jews, Gentiles, Protestants, and Catholics, will be able to join hands and sing in the words of the old Negro spiritual: Free at last! Free at last!” Dr Martin Luther King jr

1. Promises

South Africa’s president also has a dream. President Cyril Ramaphosa has promised 2.5 million job opportunities to the Tintswalos in the next five years. Tintswalo is Ramaphosa’s fictitious born-free girl child who was born on April 27, 1994, who grew up in an ANC government-funded RDP home, received a child grant, went to a no-fee school and free public health care, studied in university/TVET through the National Student Financial Aid Scheme (NSFAS) and now had a career and her own family.

EFF leader Julius Malema also promised jobs: “These jobs are going to come from social housing and roads infrastructure just and we are going to build and create four million jobs.” The DA promised to create two million jobs if elected.

The Cambridge definition of a dream is: “a series of events or images that happen in your mind when you are sleeping”.

2. Reality check

The Expanded Public Works Programme (EPWP) has its origins in the Growth and Development Summit (GDS) of 2003. At the summit, four themes were adopted, one of which was “More jobs, better jobs, decent work for all”. The GDS agreed that public works programmes “can provide poverty and income relief through temporary work for the unemployed to carry out socially useful activities”. The last decade of job creation has been a dismal failure. The Minister of Employment and Labour, Thulas Nxesi, promulgated the following minimum wages in March 2020: farmworkers are entitled to a minimum wage of R18.68 per hour; domestic workers are entitled to a minimum wage of R15.57 per hour; workers employed on an expanded public works programme are entitled to a minimum wage of R11.42 per hour. Fast-forward to 2024 and the position is as follows: farmworkers are entitled to a minimum wage of R27.58 per hour; domestic workers are entitled to a minimum wage of R27.58 per hour; workers employed on an expanded public works programme are entitled to a minimum wage of R15.16 per hour. This dual system is hypocrisy and is not fair labour practice and is in need for reform.

Surely the above wage regulations are nothing more than an acknowledgement that a minimum wage restricts the job formation process. If it is good for the government to pay R11.93 per hour, why must the average household pay for a domestic worker be almost double that and the wage is not tax deductible for the employer? How many more domestic workers would be able to find jobs if it were a free-market system and there were tax-deductible expenses as for any other employer? (Currently, there are just over 1.1 million such workers, making up approximately 10% of total formal employment numbers.) What is now happening is that the average household reduces the days that they can offer employment to domestic workers as they are under increasing inflationary pressures. Making the wages tax deductible would make a substantial difference to employment in this sector. The chart below indicates that we have lost 200 000 jobs over the last decade from this important source.

3. South Africa has a population of over 62 million

Recently, the president appointed a Minister of Electricity to support the Eskom board and Minister Pravin Gordhan, who holds the reins over all of South Africa’s SOEs. Another area of great concern in our economy is the railways, Prasa and the freight division. They link up with a further problem child, the ports and harbour bottlenecks and inefficiencies. We also have a tsunami on its way regarding our water infrastructure. These are all areas of great concern and in need of government attention. However, there can be no question as to who the most important minister in South Africa – it ought to be Minister Nxesi. He has a long history of serving in leadership roles within the ruling party and the national government. His various positions include the following: general secretary of the South African Democratic Teachers Union (Sadtu) 1990–2009; president of the World Teachers Body 2004–2009; President of Education International 2009–2010; Deputy Minister of Rural Development 2010–2011; Minister of Public Works 2011–2017; Minister of Sport and Recreation 2017–2018. His stronger traits and experience are more in line with the Teachers Union.

We recently sent some questions to the minister to which we have not yet had a reply. One such question was: “In addition, I would like to know why you, as Minister of Employment and Labour, do not sit on the Reserve Bank’s Monetary Policy decision-making board. The MPC consists of up to seven members from the SARB: the governor, the three deputy governors, and selected senior officials appointed by the governor. Inflation is not the only parameter of importance. Jobs are immensely important, and decisions that influence job creation and job reductions are to be represented at this forum.”

5. Getting our priorities right

The NSFAS spent R47.3 billion funding the tertiary education of 691 432 students in the 2022 academic year. Of the approved applicants, 462 983 were female and 227 072 were male. There is a further strong bias towards black students, exceeding their representation on the national population register. We must assume that a student with a qualification less than a matric will have a small chance of finding a job, and the jobless rate for this group is a staggering 38.8%, and that is not even at the extended definition of unemployment. The person will most probably earn the minimum wage should he find a job. Such a person starts at R4 500 per month. The person with a tertiary education will have a small chance of not finding a job, being at 8.5%. The majority will find jobs and earn the average wage, and more than R26 000 per month for the rest of their working lives of more than 40 years. Is it right that we plough so much money into one sector of the population and leave the other to fend for themselves? It is time to rethink this policy. It would be fairer to expect students who upon graduation, earn salaries five times higher than the minimum wage to repay at least 50% of their student loans. These funds can go towards a fund as much as the UIF for application for job creation initiatives for the section left behind. A fund that grows by R26bn per annum can go a long way.

We do remember the upheaval that accompanied the Fees Must Fall campaign, but so too must we remember the 2021 riots and the underlying reasons that gave rise to that situation. However, we must not move out of fear of retaliation and upheaval, but out of common human decency and moral persuasion.

There is a very disturbing statistic, the unemployment rate for people in the age group 15–24 years is as high as 58%. This number leaves no doubt that the situation cannot be left to resolve itself. Immediate and a well-planned and well-funded effort must be implemented. No nation can live with such inequality. It is not someone else’s problem, it is every citizen’s problem to find and answer. If there is no better plan than what business executive Roger Jardine has proposed, then we must implement actionable plans in line with the proposals suggested by him.

It is time for those who dream of job creation to wake up and deliver concrete actions. How many government jobs are vacant? The Portfolio Oversight Commission wrote to the Director-General and the Minister of Forestry, Fisheries and the Environment (DFFE) and put the following to them: “The Committee was concerned about the 487 frozen posts as well as 291 vacant positions and wanted to know whether this did not pose any challenge to the work of the department?”

We have asked the Director-General as well as the Minister of the DFFE to answer the following questions: Why does the department award so many tenders (more than 34) A) to one company Green Development NPC? B) Why does the department not build capacity within the department for such basic functions, and create meaningful permanent jobs with the money awarded to the tender company? C) Does the Minister of Employment and Job Creation not intervene and give his input and direction in these matters?

* Kruger is an independent analyst