The South African labour market: All the facts

Issa Saunders
News
The South African workforce is composed of all the people who are either working or available to work and are actively seeking work. Not everyone of working age participates in the work force. In South Africa the overall percentage of the working age population that participates in the work force is about 62%.

Workforce participation should not be confused with employment. Not everyone in the work force is necessarily working and the work force is composed of both the employed unemployed.

The employed are members of the workforce who currently hold jobs. The overall number of South Africans employed in 2012 was 13,447,000 people. The unemployed are members of the work force who are actively seeking work but unable to find it. South Africa has one of the highest rates of unemployment in the world. According to this definition, the overall unemployment rate of South Africa in 2012 was 25.2%. There are of course also people who have given up looking for work. If the definition of unemployment were expanded to include these discouraged workers the rate of unemployment would be 33.8%.

The economy of South Africa grew at an average rate of 4.6% between the years of 2003 and 2008 but has been severely affected by the global financial crisis of 2008. As a result, by the end of the 2008 financial year about 800,000 jobs were lost in the country. Those most affected by job losses were the youth and those with lower levels of education.

According to Statistics South Africa 39.2% of African people and 26.7% of Coloured people are unemployed whereas only 7.4% of Whites and 10.5% of Asians are unemployed. Unemployment is higher amongst women – 37.5% of females are unemployed, whilst 30.6% of males are unemployed.

There is a very high rate of youth unemployment and over 62.4% of 15-24 year olds in the workforce are unemployed. Unemployment is lowest amongst the 45-54 (18.4%) and 55-65 (11.5%) ages groups. Unemployment is highest amongst those who left school without a Grade 12 and lowest amongst those with a Diploma or a Degree.

The number of people employed in each sector of the economy varies greatly. Some sectors have fared better than others in terms of growth in the last few years. The wholesale and retail trade is the biggest employer of people in South Africa, employing 22.8% of the labour force, followed by community, social and personal services (CSP), which employs 21.5% of the workforce. The manufacturing, utilities and construction industries have all had a net decrease in jobs between 2010 and 2012.

One of the key issues facing the South African labour market is as an excess of unskilled labour. The government in its aims to redistribute wealth more equitably in South Africa has pushed for an increase in skilled labour. In 2012 unskilled labour accounted for a still high 28.9% of all labour.

The government has sought to “up-skill” the labour force by introducing the Skills Development Act (SDA) in 1998 (amended in 2003 and 2006). The Act seeks to develop the skills of the South African workforce, increase investment in education and training in the labor market, encourage employers to make provide opportunities for learning for their employees, and to redress inequality in employment prospects.

The Act relies on a coalition of government, organized labour and organized business to fulfill its aims. The National Skills Authority (NSA) was created by the Act to advise the Minster of Labour on the creation and implementation of skills policy. Organized business and organized labour both form part of the NSA. The Act also created the Sector Education and Training Authorities. These authorities deal with the creation and implementation of policy at the sector level and also include organized business and labour. One of the practical things that SETAs do is establish learnerships to help grow the skills base in their sectors.

Other legislative measures introduced by the government to improve the quality and strength of the South African labor market are:

• Labour Relations Act of 1995 • Basic Conditions of Employment Act of 1997 • Employment Equity Act of 1998

Under the Labour Relations Act, National Bargaining Councils were created to allow for a collective bargaining of the minimum wages in different industries. These wages vary greatly and are determined by through the agreement of organized labour and organized business in the NBC’s.

Even within industries minimum wages vary based on the type of job that one has. This is illustrated by the current minimum wages in the Taxi industry, where what is considered an acceptable base wage differs for drivers and administrative workers, and taxi rank marshals.

Drivers and Admin Workers: R 565.40 per week

Rank marshals:R 452.20 per week

Minimum wages for all industries can be obtained by contacting the Ministry of Labour.

www.labour.gov.za

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