<\/p>\n
Everybody in South Africa is aware that the country faces severe unemployment. The problem is evident even without looking at the statistics and is felt by all \u2013 irrespective of age, gender, level of education, or understanding of economic data.<\/p>\n
Independent economist John Loos says the scale of unemployment has become so big that it is simply being accepted as an economic constant \u2013 a long term, effectively fixed variable for all intents and purposes.<\/p>\n
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\u201cPeople simply stopped talking about the severity of the problem,\u201d says Loos.<\/p>\n
\u201cPerhaps unemployment [has become] too big to solve. It is easier to accept the high unemployment rate and take it as a given in planning or when doing economic forecasts.\u201d<\/p>\n
It became a fixed variable, he adds.<\/p>\n
One problem is that many economists, businesses and executives have a short-term planning horizon.<\/p>\n
\u201cThey might have an opinion whenever unemployment figures are announced, mainly focusing in the short-term trend. [But] the severity of the problem is being ignored. It is not being talked about.\u201d<\/p>\n
The trend is shocking \u2026<\/p>\n
Looking at the figures over a longer period, rather than quarter-on-quarter or annual changes, highlights the problem.<\/p>\n
The number of unemployed people in SA increased by nearly 80% from less than 4.4 million in 2008 to more than 7.8 million at the last count during the fourth quarter of 2025.<\/p>\n
These are idle workers actively searching for work every week.<\/p>\n
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When discouraged work seekers are included, the total rises to almost 11.6 million \u2013 versus less than 4.6 million in 2008.<\/p>\n
Thus, the total number of people who are unemployed, and who can and potentially want to work, has increased by 153% since 2008.<\/p>\n
Even worse, unemployment durations have lengthened, with around 80% of those without jobs having been unemployed for more than a year.<\/p>\n
The statistics were easy to find in an attachment to the latest Quarterly Labour Force Survey conducted by Statistics SA in the last quarter of 2025. Monthly data since 2008 clearly shows the unmistakable trend.<\/p>\n
The working-age population increased by 33%, and people entered the labour force at a similar rate, also growing by close to 33%. However, employment rose by only 18.4% over the same period, leading to the increase of nearly 80% in the sheer number of unemployed workers.<\/p>\n
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The result was the increase in the unemployment rate from 23.2% at the beginning of 2008 to 31.4% by the end of December 2025, according to the narrow definition of unemployment.<\/p>\n
When adding discouraged work seekers to the mix, the picture worsens significantly. The number of discouraged work seekers (those who just gave up and did not look for a job in the four weeks prior to the survey) increased by 209%, from 1.2 million in 2008 to 3.7 million coming into 2026.<\/p>\n
The expanded unemployment rate increased from 27.8% in 2008 to 40.3% at the end of 2025.<\/p>\n
Expanded unemployment rate<\/p>\n
Source: Based on historic employment statistics from Stats SA<\/p>\n
Loos says high unemployment is one of the reasons for the \u201cterrible state\u201d of SA\u2019s national finances. \u201cThe main reasons for the challenges faced by National Treasury are the high interest rate payments on debt and the high dependence on social grants.<\/p>\n
\u201cInterest and social grant payments are crowding out fiscal spending. It is a massive problem: There is no money to grow the economy and unemployed keeps getting worse,\u201d he says.<\/p>\n
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\u201cThe payment of social grants to a large part of the population that is not contributing to the economy puts strain on the whole system, from education to health.\u201d<\/p>\n
Decades<\/p>\n
Loos says the massive unemployment problem can improve, but it will take decades of hard work.<\/p>\n
\u201cAnybody who is 60 years old will not see a significant, long-term improvement in the unemployment rate in their lifetime.<\/p>\n
\u201cThere is no easy fix. It will take hard policy decisions and years of dedicated, hard work.\u201d<\/p>\n
However, he says the situation can improve, and quite quickly \u2013 if government gives the private sector the freedom to get involved.<\/p>\n
\u201cWe can see a quick improvement with structural reforms.\u00a0Privatise the economy. Allow [the] private sector to supply goods and services. SA has the biggest and best developed private sector on the African continent, and it is well funded.<\/p>\n
\u201cEconomic growth of 3% and 4% is possible if government makes policy changes. There has been success in this with the recovery in electricity supply, as well as transport and logistics. We need more.<\/p>\n
\u201cI see the role of government largely as a regulator, rather than a supplier of goods and services. Regulate and regulate well,\u201d says Loos.<\/p>\n
\u201cUnemployment will reduce, quite quickly.\u201d<\/p>\n
Ricardo Smith, chief investment officer at Absa Investments, says the downward trend in employment levels over the past couple of years has resulted in low confidence and spending levels from both consumers and businesses.<\/p>\n
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\u201cThis led to anaemic levels of economic growth, an increasing dependency ratio, fiscal pressure on government\u2019s budget and rising government debt levels, amongst other things.<\/p>\n
\u201cStemming from this is the sideways growth sectors that absorb large numbers of workers, such as construction, mining and manufacturing. Sectors like agriculture have largely grown on the back of mechanisation and productivity gains.<\/p>\n
\u201cThis has been even more pronounced in the SMME space, which typically provides a large portion of employment,\u201d says Smith.<\/p>\n
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Recently, geopolitical tensions have resulted in policy shifts from global and open trade to a scenario of protectionists, which has exacerbated the situation.<\/p>\n
\u201cSome positives, which should hopefully curb this trend in the future, include changes in government spending allocations prioritising economic development and debt containment, budgeted infrastructure spending of over R1 trillion over the next three years, and a lower inflation target which should ease government fiscal pressure and correlate to lower interest rates over the long term,\u201d says Smith.<\/p>\n
\u201cIt can lead to a repricing of SA assets and improving confidence and spending levels, and a strong focus on SMMEs by the financial sector \u2013 which has been the fastest growing sector over the past 15 to 20 years.<\/p>\n
\u201cHowever, commitment, transparency and accountability will be crucial to turn the employment trend around.\u201d<\/p>\n
Dr Elna Moolman, head of SA macroeconomic research at Standard Bank, says there is deep concern about SA\u2019s weak employment trends and elevated unemployment.<\/p>\n
\u201cRelatively sluggish average economic growth over this period would have weighed on job creation. Of particular concern is the weakness in the manufacturing sector, in which both employment and real GDP declined over this period.<\/p>\n
\u201cThe sector is facing a range of structural and cyclical headwinds that will likely continue weighing on growth and employment,\u201d she adds.<\/p>\n
\u201cThe impact of manufacturing weakness was, over this period, counteracted by stronger employment and GDP trends in some of the services sectors, notably the finance, business services and real estate sector, which was one of the strongest performing sectors.\u201d<\/p>\n
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#Unemployment #problem #big #solve<\/p>\n","protected":false},"excerpt":{"rendered":"
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