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SA's unemployment crisis set to worsen

Publish date: 09 August 2017
Issue Number: 199
Diary: Legalbrief Workplace
Category: General

The unemployment crisis is expected to worsen in the third quarter as more companies have issued section 189 notices to employees, according to labour federation Cosatu. Business Day reports that this comes as the latest Quarterly Labour Force Survey showed that the dire unemployment rate remained high at 27.7% in the second quarter. Commenting on the jobs situation, Cosatu spokesperson Sizwe Pamla said: ‘Eighteen months ago, it was a crisis, it is still a crisis and it’s worsening. When you consider the fact that over the last six months, we’ve seen more section 189 applications, it’s clear the third quarter is going to be worse.’ South African Federation of Trade Unions (Saftu) general secretary Zwelinzima Vavi said: ‘The job loss blood bath is unprecedented. The slaughter has continued unabated.’ Saftu had seen indications there would be thousands of job losses by the third quarter. Business Unity SA CEO Tanya Cohen said SA was likely to see more of the same in future. ‘It seems the statistics are a reflection of the economy being in recession and the poor levels of business confidence.’ ‘Heightened ... uncertainties have impacted the economy, particularly where substantial capital outlays are needed,' NKC African Economics economist Elize Kruger said. Investec economist Kamilla Kaplan said: ‘The declining growth trend since 2011 and stagnation in 2016 have pushed up the unemployment rate.’

Full Business Day report

Survey

Unemployment in the second quarter of 2017 stayed steady at 27.7% from the previous quarter, but declined by 1.1 percentage point year-on-year, Fin24 reports that Statistics SA announced. The current unemployment rate is the highest figure since September 2003. Statistician general Pali Lehohla, who released the survey for the second quarter of this year, said the labour absorption rate, which is a proportion of those who are employed among the population aged 15 to 64, declined by 0.4 of a percentage point to 43.3%. The expanded unemployment rate – which includes those who wanted to work but did not look for employment – increased by 0.2 of a percentage point and now stands at 9.3m people. Reserve Bank governor Lesetja Kganyago told Parliament during a recent briefing that SA will not be able to create jobs at an economic growth rate of below 3%. He noted that more people are entering the job market than the number of jobs being created.

Full Fin24 report

Some good news is that the Passenger Rail Agency of SA (Prasa) has announced that about 1 500 people will be permanently employed at their R1bn local train manufacturing plant at Dunnottar Park in the City of Ekurhuleni, with 99% of the total number of people to be employed, South Africans. According to Business Report, Prasa has received the last of the of the 20 trains, which were manufactured outside of SA and is now gearing up to manufacture the remaining 580 trains locally. The manufacturing activities in Brazil has allowed the manufacturer Gibela to train the SA teams who are involved in the design, engineering and manufacturing in preparation for local production of the remaining 580 trains. The company has also prioritised historically disadvantaged individuals who will make up a total of 85% of the employees with 25% of these being women.

Full report in Business Report

And the Land and Agricultural Development Bank of SA created 15 000 jobs in the agricultural sector in the year to March by providing finance for emerging farmers, the state-owned lender said. HR Pulse quotes CEO Petrus Nchocho as saying: ‘We are happy 15 000 jobs in the agricultural sector were created through our involvement. However, overall we had set aside an R4.8bn loan disbursement for the period and R2bn went to emerging farmers.’ The bank achieved some notable highlights during the year, including supporting farmers impacted by the drought with at least R100m under its Drought Relief Programme. It also increased support to female farmers, with 262 loans of R161m now on its books.

Full HR Pulse report