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The SA Daily 06 August 2020

Pressing unemployment

  • The stated aim of the National Development Plan (NDP) of an unemployment rate of 14.0% by 2020 and 6% by 2030 has remained out of range since 2010. Per the NDP, it requires leadership, difficult political choices and effective implementation.
  • The 2Q20 Quarterly Labour Force Survey (QLFS) results next week will likely show a far worse unemployment rate due to the pandemic’s impact on SMMEs, including the informal economy.
  • 1Q20 data precedes Level 5 lockdown but, even then, the unemployment rate had already increased to 30.1%, from an average of 28.7% in 2019; the IMF forecasts it to average 35.3% in 2020.
  • SA’s unemployment is one of the highest in the world, and high among those without tertiary education. It is also very high for females compared to males, demonstrating a longstanding unemployment gender gap.
  • The employment-GDP elasticity for the South African economy has fallen from just over 1% in the late 1970s, to 0.5% recently, implying that very robust and sustainable real GDP growth is required to create large-scale jobs and help the economy move closer to the NDP vision of reducing the unemployment rate to 6% by 2030. Indeed, government’s policy measures targeted at labour-intensive industries and SMMEs should curb unemployment, but far more wide-reaching measures are clearly required.

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