Risenga Maluleke’s Insights on the Rising Unemployment Crisis in South Africa

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JEREMY MAGGS: South Africa’s employment scene is set to undergo statistical changes. Statistics South Africa (Stats SA) is overhauling its Quarterly Labour Force Survey this third quarter, enhancing its evaluation of informal employment and underemployment. The aim is to present a more accurate representation of the labor market, aligning with global standards to include street vendors and gig workers.

I’m keen to discuss this topic, but today’s newly released employment statistics provide a last look at trends before this new methodology takes effect. I’m currently joined by Statistician-General Risenga Maluleke. Welcome, Risenga. Let’s start with today’s figures. The unemployment rate has risen to 33.2%. What factors do you believe are contributing to this increase, despite the fact that more people are finding jobs?

RISENGA MALULEKE: Jeremy, it’s crucial to understand that the factors affecting employment changes fluctuate each quarter. However, we have noted a steady upward trend in unemployment across the nation.

This quarter, a major contributor to the rising unemployment is the surge of new entrants into the job market, especially recent high school and university graduates. Yet, the corresponding increase in employed persons has been minimal.

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In the first quarter, we reported 16.8 million employed individuals, with an insignificant rise of just 19, holding steady at 16.8 million. In contrast, the number of actively job-seeking unemployed rose from 8.2 million in the first quarter by 140,000 to 8.4 million.

This data suggests that more individuals are seeking jobs than there are job opportunities, which has caused the unemployment rate to tick up by 0.3 percentage points to 33.2%.

JEREMY MAGGS: If we’re seeing fewer discouraged job seekers, shouldn’t that translate into a more noticeable decrease in unemployment?

RISENGA MALULEKE: It’s important to remember that the headline rate of 33.2% does not take into account discouraged job seekers.

The number of discouraged job seekers stands at 3.5 million, having decreased by 28,000 to 3.4 million.

However, those previously discouraged are now actively searching for work. The headline unemployment rate measures only those actively looking for employment.

When we combine the 8.4 million actively seeking employment with the 3.4 million discouraged job seekers, plus about 800,000 who choose not to seek work for various reasons—not solely discouragement—we reach a total of 12.6 million. This figure represents the expanded unemployment rate, which is at 42.9%.

JEREMY MAGGS: A lingering issue is the youth unemployment rate, which remains at 46.1%. I’d like to know why it hasn’t shifted, despite evidence suggesting that more young people are gaining employment according to the data.

RISENGA MALULEKE: It’s vital to recognize that youth often contribute to the increases in unemployment numbers.

Each year, a new cohort of young individuals enters the job market. Their ability to secure jobs varies widely. Some will choose to continue their education, but without admission to programs, many begin job hunting. This situation can lead to an uptick in unemployment if they struggle to find positions, or their rate may stagnate from quarter to quarter.

JEREMY MAGGS: From a provincial perspective, Gauteng and the Eastern Cape are observing job growth, whereas the Western Cape and KwaZulu-Natal are facing significant losses. Can you briefly discuss these notable provincial disparities?

RISENGA MALULEKE: Each province has unique economic factors influencing employment. For example, Gauteng and the Western Cape are known as the strongest economies, primarily driven by finance, real estate, and business services.

Additionally, retail plays a crucial role, especially in urban centers. The Western Cape also enjoys a strong agricultural sector, yet the region saw a loss of 24,000 agricultural jobs. In total, the Western Cape lost 117,000 jobs.

Listen/read: Youth unemployment crisis: 10.3 million young people jobless.

Conversely, Gauteng—while comparatively lacking in trade—has benefited from job growth thanks to its larger population and household dynamics, resulting in an increase of 88,000 jobs in trade, alongside another 28,000 from private households.

JEREMY MAGGS: Focusing on the Quarterly Labour Force Survey, there have been major modifications in the questionnaire. How will these changes impact our perception of unemployment, especially among young people?

RISENGA MALULEKE: I don’t believe that the updates to the questionnaire will significantly impact the total number of jobs created or lost. These modifications will mainly improve our ability to analyze matters surrounding unemployment and underemployment.

Listen/read: Rethinking career guidance to address South African youth unemployment.

To clarify, it’s akin to a community where 100 individuals are employed and 10 are unemployed; asking more detailed questions won’t change those figures, but it will enhance our understanding of the characteristics of those groups.

JEREMY MAGGS: Was there any prompting to alter the survey format due to critiques from former Capitec CEO, Gerrie Fourie?

RISENGA MALULEKE: Not at all, Jeremy. Our changes have been part of a long-term process related to the International Labour Conference, and we have been refining the Labour Force Survey since its inception nearly two decades ago, especially since 2008.

What we must stress at Stats SA is that while public feedback is appreciated, criticisms should not be taken as evidence that our numbers are incorrect. They present a chance to elaborate on our methodologies and discuss potential improvements but do not guide our decisions.

A crucial mistake we cannot afford as a nation is to assume we do not have a considerable unemployment issue.

Stats SA is tasked with providing an unbiased depiction of the situation. We cannot succumb to external pressures.

JEREMY MAGGS: It is vital to emphasize the importance of presenting unaltered facts. Thank you for your insights, Statistician-General Risenga Maluleke.

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