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IOL News
7 days ago
- Business
- IOL News
Why fewer young South Africans in the workforce won't solve the youth unemployment crisis
In many sectors, particularly construction, infrastructure, and logistics, demand for specialised, high-risk or niche skills far outpaces local availability. Image: Henk Kruger/Independent Newspapers Despite the number of young people aged 15 to 24 joining the labour market being expected to decrease over the next decade, structural barriers such as a lack of skills among young South Africans, limited job creation, and slow economic growth continue to impede progress. As a result, a shrinking youth population does not automatically translate into improved youth unemployment rates or ease the pressures on the economy and society. According to Statistics South Africa's 2025 mid-year population estimates, the country's total population stands at 63.1 million. Population growth has stabilised at around 1.23% annually, below pre-pandemic levels, driven by declining mortality and a rebound in positive net migration following COVID-19, the agency's figures show. According to the latest Quarterly Labour Force Survey (QLFS) it shows that 41.7 million South Africans are currently of working age. The working-age population, defined as those aged 15 to 64, grew by about 1% between mid-2024 and mid-2025, adding roughly 400,000 individuals, based on data from Statistics South Africa and the OECD. Young people aged 15 to 34 make up about half of this group. Within this segment, those aged 15 to 24 face the highest barriers to employment, with unemployment rates far exceeding those of older youth. Over the past decade, youth unemployment has climbed sharply, from 36.9% in early 2015 to 46.1% in 2025, according to the QLFS. 'Youth unemployment remains one of South Africa's most pressing challenges,' Statistics South Africa has said. While these labour market pressures mount, South Africa's demographic profile is shifting. Statistics South Africa's mid-year population estimates show that about 82% of the population is Black African, around 8% identify as coloured, 7% as white, and 3% as Indian or Asian. Women slightly outnumber men, making up 51% of the total population. At the same time, the number of young people entering the workforce is falling. Statistics South Africa's data shows that the number of children aged 0 to 14 has declined by 4.6% in a single year, dropping from roughly 17.3 million in 2024 to 16.5 million in 2025. This trend aligns with a continuing drop in South Africa's crude birth rate, now at 17.8 births per 1,000 people in 2025. Statistics South Africa further reports that improvements in infant and child survival rates have partially offset these declines. Infant mortality has dropped from 61.9 deaths per 1,000 live births in 2002 to 23.1 in 2025, and the under-five mortality rate has fallen similarly. Yet, total fertility has steadily declined from 2.78 children per woman in 2008 to 2.21 in 2025, meaning that future cohorts of working-age youth will continue to shrink. 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 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. Next Stay Close ✕ Children under the age of 15 make up about 26,2% of South Africa's population — an estimated 16,5 million people. Meanwhile, around 10,5% of the population, or 6,6 million people, are aged 60 and older. Image: Stats SA Taken in combination, although there are fewer young people entering the workforce, which could reduce the total number of unemployed youth, it does not guarantee a drop in youth unemployment rates or resolve structural employment issues. Persistent challenges such as mismatched skills, limited job opportunities, and economic stagnation continue to block young people's access to employment. Moreover, slower growth in the working-age population will place greater pressure on economic growth and productivity. Based on Statistics South Africa's data, we can surmise that, with an ageing population, a shrinking youth base means fewer people will contribute to the labour market, while an increasing share of elderly dependents will require support. Provincially, Statistics South Africa shows that Gauteng remains the most populous province, housing about 25.5% of the national population, followed by KwaZulu-Natal. Limpopo and the Eastern Cape have the highest proportions of children under 15, respectively, while the Northern Cape has the smallest share of the population. Fewer young South Africans entering the workforce should not be mistaken for an easing of youth employment challenges. As Statistics South Africa's data make clear, the structural barriers remain and may be exacerbated by demographic shifts. Policymakers must prioritise sustainable economic opportunities and inclusive labour market interventions to secure a prosperous future for the country's youth. IOL
TimesLIVE
27-07-2025
- Business
- TimesLIVE
Youth unemployment won't be solved by deregulation
South Africa's youth unemployment crisis is deepening — again. Stats SA's latest Quarterly Labour Force Survey (QLFS) shows that youth employment dropped by 153,000 in the first quarter of 2025, and formal sector jobs are in retreat. These findings prompted the Daily Maverick to warn of 'The Great Unworking' — an era where the promise of jobs is collapsing, particularly for the young...
The Citizen
15-07-2025
- Business
- The Citizen
Why SA has 32.9% unemployment and Zimbabwe 8%
We're counting different things. Someone growing vegetables in their garden for their own consumption is counted as employed in countries such as Zimbabwe, but not in SA. Picture: iStock Capitec CEO Gerrie Fourie recently claimed South Africa's unemployment is closer to 10% than the official 32.9% if we count the enormous informal sector – which, by some accounts, represents more than 15% of GDP and 2.7 million jobs. Fourie suggested the actual unemployment rate may be closer to 10% based on observations of informal economic activity. With 24 million customers, Capitec has a fair grasp of the transactional activity of nearly half the SA population and estimates the informal sector at nearly nine million – far larger than estimates by Statistics SA. Stats SA hit back at this claim, pointing out that it does in fact measure the informal sector in its various surveys, but added that improvements could be made by gathering better data. It says in a statement that it is 'committed to advancing data integrity and is evaluating additional statistical tools, including a register for informal enterprises'. ALSO READ: Is South Africa's unemployment rate really only 10%? This is no idle debate. Unemployment figures are highly politicised. They are a useful battering ram to shame the government – rightly so – and advance various political agendas. Stats SA says it recognises that its unemployment figures are among the most scrutinised in the country, and that it welcomes this. In South Africa, informal employment, defined by tax registration status and enterprise size, is captured in the Quarterly Labour Force Survey (QLFS) using International Labour Organisation (ILO) methodology. To qualify as part of the informal sector, employees must be unregistered for income tax and work in establishments with fewer than five individuals. This encompasses employers, own-account workers, and those providing unpaid assistance in household businesses who do not register for income tax or value-added tax (Vat). ALSO READ: Government meets with Capitec CEO about unemployment statistics Same methodology, different results? How we measure unemployment is of vast importance. It makes no sense that Zimbabwe claims an unemployment rate of around 8%, a quarter of that of SA, when it supposedly uses the same ILO methodology used by Stats SA. In other words, you are considered unemployed if you are without work, available to work and have been actively looking for work in the last four weeks. The Zimbabwe informal economy accounts for 70-80% employment according to stats collection agency ZimStat, with millions involved in subsistence farming or small-scale trading. Brazil and India, both fellow Brics countries, measure their unemployment at 6.2% and 7.9%. These seem extraordinarily low in countries with populations of 213 million and 1.46 billion respectively. Both also adhere to ILO methodology, but India defines the informal sector as 'unorganised or unregistered enterprises' employing fewer than 10 workers, or without social security benefits. You are also counted as employed if you worked sporadically over the last year. On this basis, India's low unemployment rate is flattered by its inclusion of a massive informal sector. Brazil, too, includes its huge informal sector in its employment data. You are considered employed if you worked at least one hour for pay or profit in the week in which the survey is conducted – or had a job but were temporarily absent. It separately measures underemployment as workers desiring more hours within the informal sector. On this measure, roughly a quarter of informal workers are underemployed. Clearly, we need to know what is being measured when comparing national employment rates. ALSO READ: Are you employed if you work an hour a week? Stats SA says yes Stats vs bank accounts 'We do not intervene in the labour market,' says Stats SA in a statement in response to Fourie's comments. 'We do not regulate the informal sector. We do not enact economic policy or comment about policy due to the independent nature of our work. 'We measure. And in measuring, we provide the data that allows others – government, business, civil society – to act with insight and intent.' Capitec – the country's largest bank in terms of customers – has unique insights into the transactional nature of much of the population. Many customers appear to be receiving irregular income that seems to signify informal sector activity. 'The problem with this is that they could also have accounts with other banks where salaries are received,' says Solly Molayi, acting deputy director-general of population and social statistics at Stats SA, speaking to Moneyweb. 'Then there's remittances to family members, such as siblings, from those who may be working in other parts of SA or other countries. 'So one has to be careful when talking about the informal sector. This is a term with widely differing meanings in different parts of the world.' For example, someone growing vegetables in their garden for own consumption would be considered part of the informal sector in countries such as Zimbabwe – and therefore counted as employed – but not in SA. ALSO READ: SA youth not unemployed, rather under-employed Youth stats? Evans Maphenduka, executive coordinator for the Development Microfinance Association (DMA), an umbrella body for several microfinance organisations, notes that youth unemployment at 62.4% is especially worrying. Very few of the three million odd informal businesses in SA are owned by the youth. What's needed, he adds, is a dedicated and appropriate microfinance and informal sector policy framework that separates them from small and medium businesses. 'Only then can we, as a country, know how many informal businesses there are, and what their contribution to employment is,' he says. 'Right now, statements made by different people such as those made by Capitec CEO Gerrie Fourie cannot be substantiated, and may be regarded by some as speculation and bordering on neglecting our responsibility to create the needed employment in our country.' ALSO READ: How SA's youth make and (should) spend their money Standardised global measurement Measuring employment and the informal sector is an issue that has seized the attention of the ILO, which in 2023 passed a resolution to standardise stats on the informal sector across the world. Not everyone has yet adopted this new definition of informal employment which is 'any activity of persons to produce goods or provide services for pay or profit that is – in law or in practice – not covered by formal arrangements such as commercial laws.' Informal employment would also cover anyone not covered for formal procedures to report economic activities, income taxation, labour legislation and social security laws and regulations. That would cover family members helping out in the business without any formal employment arrangement, as well as employees and 'dependent contractors' not formally recognised by the employer. Molayi says Stats SA is now implementing this definition, the real benefit of which will be to provide more granular detail on the informal sector which is already well measured. As more countries adopt the same measure, cross-country comparisons of unemployment and the informal sector will become more meaningful. This article was republished from Moneyweb. Read the original here.
IOL News
08-07-2025
- Business
- IOL News
Stats SA and Capitec Bank CEO discuss South Africa's unemployment crisis
A street vendor pushes his trolley in the Pretoria CBD. Stats SA has defended its unemployment statistics after questions were raised about whether the informal economy was taken into consideration. Stats SA has defended the integrity of its official unemployment statistics following a high-level meeting with Capitec Bank CEO Gerrie Fourie, who recently questioned the credibility of the country's 32.9% unemployment rate. The meeting, held in Stellenbosch last week, brought together Minister in the Presidency Khumbudzo Ntshavheni, Statistician-General Risenga Maluleke, senior Stats SA officials, and National Treasury representatives to address comments made by Fourie, who suggested South Africa's real unemployment rate might be closer to 10%, based on Capitec's observations of informal economic activity. In response, Stats SA gave what it described as a 'comprehensive presentation' of the methodology used in its Quarterly Labour Force Survey (QLFS), which it said adheres to International Labour Organization (ILO) standards and includes informal and self-employed workers. 'Stats SA methods remain robust,' Maluleke said. 'We do not fix statistics to feel better about our reality. We reflect that reality so the country can make evidence‑based decisions to change it.' Fourie, who welcomed the engagement, said: 'We are committed to working with the government and the private sector to help South Africa grow. The informal market is vibrant and dynamic, but we believe this growth will only be achieved once the informal economy is properly understood and supported with the right policy frameworks, infrastructure, funding, and skills development.' Maluleke acknowledged that Stats SA was open to further improving the quality of labour market data, including exploring the development of a statistical register for small and informal businesses. 'We have listened to them, and we need to investigate the issues of a statistical register for small business,' he said. The meeting followed Minister Ntshavheni's comments during Stats SA's Budget Vote debate in Parliament. She said more consultations were expected with other stakeholders, including in the short-term insurance sector. In a joint commitment, Stats SA and National Treasury affirmed their support for stronger data systems and continued engagement with both public and private stakeholders. 'Future updates will be communicated as developments occur,' the statement read. Stats SA stated it would conduct "methodological tests and innovations" in the coming years to refine labour indicators and ensure better capture of the informal economy within the National Statistics System. THE MERCURY
The Citizen
07-07-2025
- Business
- The Citizen
Government meets with Capitec CEO about unemployment statistics
The CEO of Capitec does not think Statistics SA considers informal employment sufficiently when calculating the unemployment rate. After the CEO of Capitec, Gerrie Fourie, recently said he believes South Africa's unemployment rate should be 10% instead of the 32.9% as Statistics SA reported, government met with Fourie and his management team to discuss it. Minister in the presidency, Khumbudzo Ntshavheni, the Statistician-General, Risenga Maluleke and senior representatives from Statistics SA and National Treasury met with Capitec to discuss Fourie's statement that the unemployment rate should be 10% based on observations of informal economic activity. According to Statistics SA, its delegation gave a comprehensive presentation detailing the methodology behind the Quarterly Labour Force Survey (QLFS), a nationally representative, household-based survey that already includes informal and self-employed workers in line with International Labour Organisation standards. Ntshavheni first announced the meeting during Statistics SA's budget vote debate in parliament and also mentioned that the meeting will be followed by a meeting with other stakeholders. ALSO READ: Capitec's outgoing boss bemoans SA's high real interest rates Statistics SA will explore development of register for small business After the meeting, Maluleke described the discussions as cordial and constructive and indicated that Statistics SA remains open to exploring the development of a statistical register for small-scale and informal businesses, which he said would strengthen the quality and granularity of labour market data and support policy initiatives from the Department of Small Business Development. 'We listened to them, and we must investigate the issues of a statistical register for small businesses. Statistics SA methods remain robust. We do not fix statistics to feel better about our reality. We reflect that reality to enable the country to make evidence‑based decisions to change it.' Fourie welcomed the engagement with the Minister, the Statistician-General, and Treasury, and said Capitec is committed to working with the government and the private sector to help South Africa grow. 'The informal market is vibrant and dynamic, but we believe this growth will only be achieved once the informal economy is properly understood and supported with the right policy frameworks, infrastructure, funding and skills development.' ALSO READ: Is South Africa's unemployment rate really only 10%? Capitec and government will work together on unemployment statistics Maluleke said Statistics SA is committed to advancing data integrity and is evaluating additional statistical tools, including a register for informal enterprises. If implemented, this register will complement the QLFS and serve as a valuable sampling frame for improved labour market analysis. Capitec and the government delegation agreed to explore ways to continuously enhance understanding of the informal sector by leveraging a range of available data sources, including administrative records and research studies. Maluleke said that as part of coordinating producers and stakeholders within the broader data ecosystem under the National Statistics System (NSS), a series of methodological tests and innovations will be conducted over the coming years to refine labour market indicators and support inclusive economic policymaking. Ntshaveni and National Treasury also affirmed their support for open dialogue with stakeholders and for strengthening data systems across the economy.
