iJob iJob: The mystery of unemployment increases! – GG Alcock

By GG Alcock

Do journalists interrogate the news, or do they rehash press releases and report summaries and don’t interrogate the details?  

The headlines once again scream unemployment rises.  

SA’s unemployment rate rises to 32.9%, 

Now I must say upfront I have no qualification in stats, finance or in fact anything really.  My primary school was at a stone bench under an acacia tree with my mother as teacher. I passed matric at Greytown High School, which was not known for its academic record, which I made worse with a lowly D.  I could not afford university, and after some anti-apartheid human rights jobs became a bricklayer before practically pioneering the world of kasinomics and township marketing.  

But having looked at the latest figures I must say that although I do not challenge that formal unemployment is dire and I deliberately highlight formal, I challenge the nature of and scale of unemployment.  Let’s look at the stats SA report that is blazing across headlines in all media .. here it is.  

https://www.statssa.gov.za/publications/P0211/P02111stQuarter2023.pdf

The summary of the Stats SA report is a paragraph check the media release here,

https://www.statssa.gov.za/publications/P0211/Media%20release%20QLFS%20Q1%202023.pdf

and it is in essence what the media have reported on more or less word for word. I will bet a case of my delicious Soweto Chakalaka Sauce that most media reports were not based on reading the full 133 page report but the short summary!  And the full report is quite interesting.

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I downloaded the report and this was the first thing that confused me…. Maybe that Greytown school matric is the problem.

“It was observed that a large number of persons moved from the ‘not economically active’ category to ‘employed’ and ‘unemployed’ statuses between the two quarters, which resulted in an increase of 0.2 of a percentage point in the unemployment rate to 32.9%,” Stats SA said. 

Ok so the primary reason for the 0.2% increase is that not economically active people decided to change their status, it was NOT that actual unemployment increased!     In fact, employment increased in numbers according to the Stats SA report.   But the impression created by the headlines is that unemployment has risen, and we descend into depression and misery, doomsday scrolling through the news!

So, I moved onto the graph, see below, copied and pasted from the Stats SA report.

Now again I am uneducated in the fine arts of statistics, but I can read, I read this below figure 1…. ” employment increased by 258 000 in the first quarter of 2023, following an increase of 169 000 in the fourth quarter of 2022.” And then further on “The results further confirm that this was the sixth consecutive increase in employment since Q4: 2021.” 

Jeez if I was the media my headline would have led with “Sixth Consecutive Increase in Employment since Q4: 2021.” 

A quick search found this handy graph by TradingEconomics.com, their source, Stats SA.  Look at that graphs upward trajectory.

The number of employed persons in South Africa increased to 16192.28 in the first quarter of 2023 from 15934.49 in the fourth quarter of 2022. source: Statistics South Africa

So employed people grew in absolute numbers?  So, employment has improved i.e. more people are employed today than this time last year.  Is that a headline, is that good, is that something we should celebrate?  I would have said so, and that’s not even considering my hobby horse which says that the informal economy employment is under measured!

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I challenge the media to change their headline policy.

OK so our population growth according to the SA General Household Survey between 2002 – 2022, was 1.35% pa, and population growth of +1.07% in 2022.  So, what is happening, is our population growing faster than employment i.e., jobs not keeping up with a 1% population growth?  

The working-age population increased by 141 000 or 0,3% in the first quarter of 2023.  source: Statistics South Africa

So, the working age population grew by 141 000 and employment increased by 258 000 in the first quarter of 2023.  So how does the unemployment rate rise?  Even if the 141 000 did not get a job and we employed from the unemployment pool we still employed 119 000 more people!  I get it that we still have millions of unemployed and we need more than 258 000 jobs a quarter to eat into that.  But the unemployment rate is at worst static!

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Anyway, let’s move on and stay with the report…

“Employment gains were observed in the formal sector (up by 209,000), the informal sector (up by 107,000) and agricultural sector (up by 27,000), while losses were observed in private households (down by 85,000) in Q1 2023,” Stats SA said.  

Look at that informal economy rate of employment growth… only half formal but both grew.  

Assuming of course that Stats SA is measuring informal employment accurately, which I believe it is not and that there are a lot more people in in the informal economy either working or owning businesses or earning passive incomes that are not measured.  A job in SA is largely defined by having a payslip.  Formal or informal respondents are not going to say they are employed if they don’t have a payslip or if they are not employed but the job could be earning rent.  One simple example a R 20 billion a year backyard rental sector which the Department of Housing says in 2016 constituted 26 % of all rental in SA.  Another example is spaza rental incomes of another R 25 billion rand a year.  Passive incomes i.e., not employment but jobs and a massive income stream to SA households.  I go into much more details on this in my chapter iJob iJob in my new book White Born Zulu Bred.

Read more: Unemployment in SA now third highest in the world

Stats SA has an expanded definition of unemployment

Unemployed persons according to the Expanded definition are those (aged 15–64 years) who:

  1. Fall under official unemployment (searched and available); 
  2. and b) Were available to work but are/or: Discouraged work-seekers Have other reasons for not searching

Yo aged 15 – 64!  In fact, the Stats SA definition of the total labour force is unemployed and unemployed people aged 15 – 64.  There are 5.1 million youth aged 15 – 19 years as of 2022.  Are we really adding 15-year-olds to the labour force?  

In my humble opinion Stats SA should be thinking of an “expanded” definition of employment as well? A little balance might be useful.  

Let’s resist the temptation to use click bait style headlines which create misconceptions and negatively skewed national heartache.  

And maybe we need a few investigative journalists and less reporters!

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