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< What the Big Mac index says about the value of the rand
Economics Main Page >

Labour force participation rate in South Africa
​​​
Date: 17 October 2018
Category: Economics

Related Topics

We take a look at South Africa's labour force participation over time and compare it across age groups and race groups. We also compare high level labour force participation rates of South Africa to that of the United States of America.
Picture
  • SA manufacturing industry
  • ​South Africa's GDP

So whats the labour force participation rate of South Africans

Generally labour force participation rate is defined as the proportion of working age population that are either employed or actively seeking employment. So what does the labour force participation rate among different race groups in South Africa look like?
chart created with amCharts | amCharts
The plight of Black/Africans in terms of employment and seeking employment in South Africa is clear for all to see. Black/Africans labour force participation rate is by far the lowest of all the race groups, and is currently sitting at 57.6%, below the national average of 59.1%. Black/Africans labour force participation rate is also far below that of the second lowest race group in terms of labour force participation, which is Indian/Asians whose labour force participation rate in the 2nd quarter of 2018 was sitting at 60.9%

Whites have by far the highest labour force participation rate, with it currently sitting at 67.5% and Coloureds labour force participation rate sitting at 65%, the second highest of all the race groups. Historically Whites and Coloureds had the highest and 2nd highest labour force participation rates respectively of all race groups in South Africa. But in saying that, the labour force participation rate has been declining for these two race groups over time. Especially Whites, which has seen the labour force participation rate drop from 71.6%  at the beginning of 2008 to 67.5% in the 2nd quarter of 2018.

The chart below takes a look at the labour force participation  rate per age bracket in South Africa.

chart created with amCharts | amCharts
While the average labour force participation rate across all age groups of working age (the black dotted line) is hovering just below 70%, it is clear that the youngest group (15-24) has the lowest labour force participation rate, the reason for this they are all hopefully in school busy getting an education. The second lowest labour force participation rate is in the older age group of 55-64 years old, with a labour force participation rate of under 50%. However this has started to tick up in recent quarters and we expect this to continue as older folks need to re-enter the market to look for employment as the continued escalation of South Africa's cost of living is forcing elders out of retirement to work to ensure they can make ends meet. The same phenomenon is happening in the United States of America. The image below shows the USA labour force participation rate among the elderly.
Picture

This is a sign of the times, with people living longer, the retirement age of 60 or 65 is quickly under threat as those that were looking at retiring at that age might be forced to work longer (not force by the government or the state, but by their economic circumstances). This drives the point home again that those that can should make sure that they plan adequately for retirement.

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