Labour Market Dynamics

Labour Market Dynamics in South Africa

2 April 2020: Labour Market Dynamics in South Africa for 2018

We cover the latest data regarding South Africa's Labour Market Dynamics in 2018 as published by Statistics South Africa. The report covers the period 2013 to 2018. A brief summary of the main economic variables movement over the time period is provided below:

Over the period 2013–2018, employment levels increased by 1,5 million from 14,9 million to 16,4 million. During the same period, both the unemployment rate (27,1%) and absorption rate (43,2%) increased by 2,4 percentage points and 0,5 of a percentage point, respectively. Economic growth has declined from a high of 2,5% in 2013 to 0,8% in 2018.

Labour market dynamics

In 2018, approximately 94,0% of employed persons remained employed between quarter 3 and quarter 4 of 2018, while those who remained inactive were about 90,0% in 2013 and 90,1% in 2018. On the other hand, the unemployment retention rates increased over the period from 68,1% in 2013 to 71,8% in 2018. The results from panel data indicate that the employed and the inactive population were more likely to remain in the same status.
Provinces that recorded the highest employment retention rates were Western Cape at 96,9%, followed by KwaZulu-Natal (95,6%) and Gauteng (94,9%). Limpopo (90,0%) and Eastern Cape (90,1%) recorded the lowest employment retention rates in 2018. Employment retention rates increased in six of the nine provinces in the country, with the largest increase observed in KwaZuluNatal (3,7 percentage points), followed by Mpumalanga (2,9 percentage points). Free State recorded the largest decline of 2,0 percentage points.
During 2018, about 10,6% of the unemployed found employment between Q3 and Q4 while only 7,8% of those who were discouraged found employment in the same period.
In terms of the informal sector's contribution to employment, out of the 16,4 million employed persons, the informal sector employed about 2,9 million; this is 17,9% of the total employed population in 2018. The informal sector serves as a point of entry to the formal sector; however, provincial disparities are evident. Between Q3 and Q4: 2018 nationally, 14,6% of informal sector workers found a formal sector job, while provincially this ranged from a high of 18,4% in Gauteng to a low of 10,6% in Free State. The panel data analysis also finds that the informal sector does not provide for stable employment; in North West, close to one in five (18,9%) of those employed in the informal sector moved out of employment in the subsequent quarter.
The analysis identifies that unemployed women, youth and those who have no previous work experience are less likely to transition into employment. While the unemployed have a low transition rate into employment, those in short-term unemployment in 2018 were about three times more likely to find employment in the following quarter relative to those in long-term unemployed.
The type of contract a person is employed on can also point to vulnerabilities in the labour market; in particular, those employed on a contract of a limited and unspecified duration are less likely to retain employment on these contract types and were, therefore, more likely to move out of employment on a quarterly basis.
Employees in skilled occupations were more likely to remain in the same occupation compared to those employed in semi-skilled and low-skilled occupations. Skilled occupations and tertiary industries are associated with higher employment retention rates. Between Q3 and Q4: 2018, the employment retention rate in the tertiary industries was 92,4%.
While improving educational outcomes remains crucial to reducing unemployment, providing work experience (formal or informal) holds the key to lowering unemployment in the short run (IMF Working Paper, 2016).¹ The 2018 provincial results show that the transition rates into employment amongst the unemployed with previous experience were highest in Limpopo (16,3%), North West (11,9%) and Free State (11,4%). In the same year, the transition rate into employment amongst the unemployed who had a tertiary qualification was 6,5% compared to 5,0% of those whose education levels were below matric.

17 February 2020: Positions occupied by men and women in the SA labour market

We take a look at the latest employment data published by Statistics South Africa in their quarterly labour force survey (QLFS) and focus on the positions occupied by men and women who are employed in South Africa

Women

Manager: 447 000 (6.19%)
Professional: 514 000 (7.12%)
Technician: 742 000 (10.27%)
Clerk: 1 256 000 (17.39%)
Sales and services: 1 287 000 (17.83%)
Skilled agriculture: 23 000 ( 0.31%)
Craft and related trade: 230 000 (3.19%)
Plant and machine operator: 167 000 ( 2.31%)
Elementary: 1 600 000 (22.16%)
Domestic worker: 954 000 (13.21%)
Other: 2 000 (0.02%)
Total: 7 220 000 (100.00%)

Men

Manager: 993 000 (10.80%)
Professional: 456 000 (4.96%)
Technician: 659 000 (7.17%)
Clerk: 477 000 (5.19%)
Sales and services: 1 451 000 (15.77%)
Skilled agriculture: 56 000 (0.61%)
Craft and related trade: 1 677 000 ( 18.23%)
Plant and machine operator: 1 208 000 (13.13%)
Elementary: 2 162 000 (23.50%)
Domestic worker: 59 000 (0.64%)
Other: 1 000 (0.01%)
Total: 9 201 000 (100.00%)

In total there were 9.201 million men employed during the 4th quarter of 2019 while there were 7.220 million women employed during the said period. 23.5% of men were employed in elementary jobs, with 22.16% of women employed in elementary jobs. Almost a million women (954 000) were employed as domestic workers (13.2% of the women employed in South Africa), while only 59 000 men were employed as domestic workers (including gardeners etc.), which makes up 0.64% of all men employed in South Africa

23 March 2018: Paid work per age and gender group

Source of the data is Statistics South Africa's Labour Dynamics Data.

The graphic below shows the percentage contribution of each age and gender group to the total number of people that was involved in some form of paid work. The total number of people between the age of 15 and 65+ involved in some form of paid work amounted to 11,3 million people.

Its clear from this graphic that the majority of South Africa's workforce is between the age 25-39 with roughly 48% of all people employed in some form of paid work coming from this age grouping (with 21% of that being made up by women and 27% being made up by men).

chart created with amCharts | amCharts

The graphic to the left shows the percentage contribution of each age and gender group to the total number of people that was not involved in some form of paid work. The total number of people between the age of 15 and 65+ not involved in some form of paid work amounted to 24,3 million people. This figure is far larger than those involved in paid work, but this includes unemployed people, retired people and those who run their own businesses.

The interesting thing to note is the large contribution of grouping 15-24. While a large number of those include school/varsity going children, a big part of it is unemployed youth not going to school or studying. One of South Africa's single biggest problems is dealing with youth unemployment.

Hours worked:

chart created with amCharts | amCharts

The above graphs shows how much each gender/hours worked grouping contributes to the total hours worked. As a regular working week is 8 hours 5 days a week (giving 40 hours), its no surprise that the largest number of people worked between 31-40 hours a week (45.7% of all people reported to work between 31-40 hours a week).

What is interesting to note is the big divergence between males and females in the working hours 41-50 hours a week. Males do seem to be working longer hours on average than females, while more females reported shorter working weeks than males. Is this perhaps due to females working short hours to look after children and "run" the house so to speak?