What is SA's real jobless rate?
After Kabelo Khumalo's article 'Capitec CEO argues SA's jobless rate as low as 10%' in Business Day, he sits down with Arena's editor-at-large S'thembiso Msomi to break down the issue further.
Is it true or not? How are we collecting the data and what more do we need to add to the conversation?
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IOL News
15 hours ago
- IOL News
The real story behind South Africa's unemployment figures
South Africa's unemployment rate has risen to 32.9%. Image: File SOUTH Africa's unemployment rate is a lightning rod for political debate, economic anxiety, and public frustration. In the wake of Capitec CEO Gerrie Fourie's claim that the 'real' unemployment rate is closer to 10%, far below Statistics South Africa's official 32.9%, the national conversation has reignited. Critics of Statistics South Africa (StatsSA) suggest that the official figures are not just technical measures but political artefacts that erase the economic activity of millions in the informal sector. But does this criticism stand up to scrutiny? The answer is more nuanced than the headlines suggest. Capitec CEO, Gerrie Fourie. Image: Supplied Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Why Would Anyone Overstate Unemployment? Let's start with the most provocative claim: that StatsSA and the government have a motive to overstate unemployment. This accusation defies both political logic and institutional practice. High unemployment is a political liability, not an asset. It invites criticism, undermines investor confidence, and puts government performance under the microscope. If there were any incentive, it would be to understate the problem, not exaggerate it. A trend we see in a number of African countries where the official unemployment rates are so low they defy logic and reality. StatsSA is an independent institution that, while not perfect, has a lot of credibility. Its data is scrutinised by economists, international agencies, and the media. Any manipulation or systematic bias would be quickly exposed by these watchdogs. In reality, the agency's credibility depends on its objectivity and adherence to global standards. Does StatsSA Ignore Informal Work? The Evidence Says No A central argument in the current debate is that StatsSA's methodology 'renders millions invisible' by failing to count informal work. This is simply not true. StatsSA's Quarterly Labour Force Survey (QLFS) is designed to capture all forms of work, including informal jobs, self-employment, and unregistered businesses. The QLFS asks about any activity, formal or informal, that brings in income, whether it's selling vetkoek, running a backyard salon, or hustling as a car guard. If you worked for at least an hour in the reference week, you're counted as employed. Both current and former statisticians-general have clarified that informal work is counted, as required by the International Labour Organisation (ILO) standards. Recent Stats SA research confirms that the informal sector employs about 19.5% of the workforce, nearly one in five jobs. This includes street vendors, home-based businesses, and unregistered enterprises, all of which sustain households and fuel local economies. Comparing Apples and Oranges: International Context The arguments supporting Fourie's claims point to countries like India, Brazil, and Zimbabwe, where unemployment rates are low despite massive informality, and suggest South Africa is an outlier. But this comparison ignores key differences: Economic Structure: South Africa's informal sector is smaller than in many developing countries, partly due to regulatory and historical factors. In India, almost any economic activity, no matter how marginal, is counted as employment, even if it's not enough to survive on. Definitions Matter: Some countries use looser criteria for employment, counting sporadic or survivalist activity as work. South Africa's approach is more rigorous, aiming to distinguish between meaningful employment and mere survivalism. Policy Hostility: South Africa's informal sector faces regulatory barriers, policing, and licensing bottlenecks that suppress its growth, unlike in countries where informality is the norm and often the only option. Is the Quarterly Unemployment Report Flawed? StatsSA's quarterly unemployment report is not methodologically flawed. There is also no evidence that it is politically manipulated. The agency publishes detailed methodological notes, welcomes peer review, and its data aligns with other indicators of economic hardship, like sluggish GDP growth, high poverty, and social grant dependency. If millions of informal workers were being missed, we'd see glaring inconsistencies elsewhere, which we do not. The QLFS is transparent about its limitations and is constantly evolving. For instance, the latest data shows that while formal sector employment decreased, informal sector employment actually increased by 17,000 in the first quarter of 2025. This demonstrates that informal work is not only counted but also tracked over time. The Real Issue: Structural Barriers, Not Statistical Tricks The real challenge is not statistical invisibility but structural exclusion. South Africa's informal sector is not as robust as in other developing countries. Regulatory barriers, monopolistic competition, and a lack of support mean that informal work is often precarious and low-paid. The country's economic structure is dominated by large corporations, making it hard for micro-enterprises to thrive. Even where state policy recognises informal activity, it rarely dismantles the barriers that prevent informal traders from scaling up. The shift in informal enterprises toward home-based operations and the stagnation of licensing reveal a sector that is surviving under constant threat, not thriving. Hybrid Measurement: A Welcome Innovation, Not a Silver Bullet Calls to supplement survey data with financial transaction records and digital platform data are valid and should be explored. Capitec's own data on township transactions could offer valuable insights. But these are refinements, not fundamental corrections. The current statistics are not a 'mirage'; they are a sober reflection of a society where too many are locked out of meaningful work, formal or informal. Let's Fix the Economy, Not the Messenger It is true that black South Africans face disproportionately high unemployment rates and that the legacy of apartheid continues to shape economic opportunity. But this is not the result of statistical erasure; it is a reflection of structural realities. StatsSA's data exposes these inequalities; it does not create them. Nco Dube a political economist, businessman, and social commentator. Image: Supplied
TimesLIVE
18 hours ago
- TimesLIVE
What is SA's real jobless rate?
After Kabelo Khumalo's article 'Capitec CEO argues SA's jobless rate as low as 10%' in Business Day, he sits down with Arena's editor-at-large S'thembiso Msomi to break down the issue further. Is it true or not? How are we collecting the data and what more do we need to add to the conversation?
The Citizen
a day ago
- The Citizen
Taking unemployment lessons from a bank boss who can't count?
There is no way that SA's unemployment rate is only 10%. More than 8.2 million people were unemployed in the first three months of this year, 237 000 more than the three months before. But if Capitec CEO Gerrie Fourie is to be believed, most of those don't count. Fourie said this week that the unemployment crisis, which swallows more than one in four people in this country (43.15%), is being inflated and 'is actually around 10%'. He claimed this is because official government statistics exclude those who sell amagwinya and others who rent out their backrooms to put food on the table. He said these hustles are comparable to employment and encouraged entrepreneurship. While most observers will tell you that small and medium business development should be the priority and entrepreneurship is essential to our economic future, surely we shouldn't be encouraging bylaw violations in our grand quest to create jobs? Is suburban decay just job creation? Both townships and suburbs are battling mushrooming land grabs and room renting as the demand for housing in urban areas continues to grow. Away from official statistics, just driving down the road or turning on the tap will show you how much of a strain this has on already frail infrastructure. Illegal connections are found on many streets, hastily built rooms are erected without plans, approvals, or necessary skill, and spaza shops are opened with little regard for food safety. If the millionaire rode down the same street, he might have to dodge the unroadworthy school transport drivers who pack the future generation into a taxi like sardines to maximise profit. We have laws that prohibit these kinds of 'hustles' to protect infrastructure and people's lives. Such criminality should be policed, not encouraged. ALSO READ: A VIEW OF THE WEEK: So what if there is a shack in the back? Making the informal formal Fourie has repeated the call for the unemployment stats to include the informal sector, like other developing nations have. This has been on the request list for 30 years and has been blue-ticked by the government because the sector is so fluid. Defining what sector falls under the informal economy is also problematic and requires regulations. But where do we start regulating and enforcing rules on the taxi industry, or on Tannie Marie selling doilies on Facebook? And what about those in the illicit market? If the person begging for money at a robot is employed, then does that make the drug dealer sharing the corner employed too? Giving government a pass The problem with watering down the definition of employment is that it downplays the government's failures in addressing inequality and job creation. There are dedicated ministries to labour, employment, and small businesses, and yet the scourge of joblessness continues. Instead of holding the government accountable, it gives the impression that SA's job market is far better than it actually is. This may help corporates like Fourie sell a good image when trying to secure international deals, but it invalidates and silences the poor in the country that these businesses are built on the back of. Allowing a corporate bigwig to tweak what employment means is as concerning as sending a billionaire to the White House to present government policy. Sadly, like when Johann Rupert went to visit Donald Trump last month, that has already happened. NOW READ: A VIEW OF THE WEEK: Don't give BEE bully Musk your lunch money
