Unemployment in South Africa

According to Reuters, the unemployment rate in South Africa rose 32.9% in the first quarter and 32.7% in the final quarter, let alone in 2023. Most of it is accredited to the nationwide power crisis. The state power utility Eskom has implemented some of the worst power outages on record, partially because of its inability to meet the energy demands.

Here is a complete guide on the unemployment situation in South Africa, along with its reasons and impact on the average citizen. So, don’t waste more time and give it a quick read.

Current Unemployment Rate in South Africa

This year, up until now, the power crisis has impacted many households and businesses, and they are struggling to remain in operation. According to the QLFS Quarterly Labor Force Survey, the number of unemployed persons in 2023 increased by 399,000 to 16.7 million in the third quarter, marking a massive increase in the unemployment rate in South Africa.

In the next quarter of 2024, South Africa is expected to witness around 31.9% of the country’s labor force being unemployed – though lower than last year’s but still high. However, what’s worse about this rate is that a large share of youth (around 11%) is included in these statistics. These stats coming just before the national elections do not seem promising for the country.

In addition, women are yet another demographic group facing high unemployment, around 6.6% in comparison with men. For two consecutive years, Djibouti and South Africa topped the ranking for the unemployment workforce in the African continent, whereas Niger, Burundi, and Chad witnessed the lowest unemployment rate.

Reasons for Unemployment in South Africa

South Africa is currently experiencing a massive increase in its unemployment rates. Here are a few reasons for this high unemployment influx in the country.

Lack of Education/ Training

Lack of training and relevant education is a root cause of unemployment in the country, mostly among the young people of the country. Students are not prepared to start from the bottom and make their way up. In addition, the limited number of apprenticeship programs, responsible for training new employees further result in skill shortage and lack of experience across the board.

Role of Trade Unions

The role of trade unions in the South African political arena is pretty high and it usually gives a great deal of bargaining power to the parties. However, with every new quarter, these trade unions come up with higher wage demands, which usually lead to a decline in employment. Moreover, the strikes discourage investors from putting in their money, resulting in a drop in the employed workforce.

Lack of Support for Entrepreneurs

In South Africa, there is not much support for startups and entrepreneurs, resulting in the discouragement of fresh graduates to venture into something new. In 2023, only 6% of the youth population was involved in any entrepreneurship program, making it hard to create new jobs for people with less educational credentials. Part of the reason is complicated and costly government legislation in South Africa.

Mismatched Labor Demand-Supply

Because of no new business activity in the country, the labor demand and supply in South Africa do not match. In this case, the jobs available nationwide are unable to accommodate everyone entering the market. The power crisis and the inability of businesses to operate make the situation even more challenging for new people entering the workforce.

Impact of Unemployment on an Individual

Like society and the economy, unemployment hits an individual a lot in his/ her personal and professional life. Here are a few ways unemployed people get hit by high inflation rates and then get out of work.

Reduced Income

Unemployment in a country can significantly affect a person’s earnings and eventually his/ her ability to maintain basic necessities like food, housing, and transportation. It is common knowledge that a person relies on his/ her salary for basic things, and when they are unemployed, they lose the social support network. In this case, government services and unemployment insurance may help you pay for essential items and bills.

Disturbed Physical Health

Being unemployed is highly stressful and can often lead to stress-related heart issues like high blood pressure, diabetes, heart diseases, headaches, insomnia, and back pain. It comes with increased visits to the doctor and overwhelming medication to treat these health conditions.

Similarly, many people rely on their salaries and jobs to cover health insurance and when he/ she is unemployed, they do not have access to free health care. These people are also less likely to spend on health-related expenditures like gym memberships, healthy diet, etc.

As they skip these preventive measures, individuals experience a higher risk of decline in physical health. Simply put, it takes their health trajectory downhill.

Negative Familial Effects

Being unemployed also takes a negative toll on your relationship with children, as they are less likely to give their children time while working on additional jobs. Even when they are not working overtime and do not have access to a parent’s support program, they experience issues with self-esteem and confidence. Simply put, it wouldn’t be wrong to say that families with money issues often feel stressed and engage in conflicts.

Mental Health Issues

Just like physical health issues, unemployed people also undergo mental health issues like anxiety, anger issues, and depression. People out of work generally feel overwhelmed by their emotions and engage in conflict with others or make poor decisions, directed by their mood. It is better for people around them to give them support and help them ease their pain with possible treatment options.

Why is South Africa Unemployment So High?

According to a presentation prepared by QLFS, the massive unemployment in South Africa in 2024 is a result of social services, construction, agriculture, and trade sectors. The head of labor statistics, Desiree Manamela, indicated that the drop in employment in these sectors, especially the trade sector during the last quarter, was quite unusual.

According to the World Bank, South Africa marked the highest unemployment rate in the year 2024, outstripping Kosovo and Djibouti. In this year alone, the youth unemployment rate is 61% for people between 15 and 24 years old and a staggering 71% for those who are no longer striving for job opportunities. The Social Policy Initiative in the country suggested that 24 million adults out of 60 million are out of jobs.

Given this situation of high unemployment and weak economic growth, the ANC African National Congress has received a lot of backlash. According to experts, the ANC will lose its parliamentary majority for the first time in three decades. Particularly, last year, because of the high unemployment rate, the ANC struggled a lot in winning over young voters.

Pearl Pillay from the Youth Lab think-tank suggested that the lack of entrepreneurial support and business opportunities for young people is almost negligible. She said that the government is not striving to draft policies addressing the issue. The only way out of this situation is state policies for better business opportunities, especially targeting young people in the country.

FAQs

Which country in Africa has the highest unemployment?

In the African continent, Djibouti and South Africa topped the unemployment rate chart for two consecutive years.

What is the current youth unemployment rate in South Africa?

In the last quarter of 2023, the South African youth unemployment rate was 61% for people between 15 and 24 years old. In contrast, the youth unemployment rate for the previous year was around 49.83% with a decline of 0.03 percent from 2022.

What is the unemployment rate in South Africa?

According to QFLS, the official unemployment rate in the third quarter of last year was around 32.1% and 31.9% before this.

Why is the unemployment rate really high in South Africa?

There are several reasons why the unemployment rate is high in South Africa, including low education statistics, a limited number of opportunities for vocational training, and a lack of entrepreneurial support across the country.

Final Thoughts

In essence, the unemployment rate in South Africa is really high and comes down to factors like low education, no job prospects, and limited business support from the government. Just before the national and provincial elections, this situation does not seem like a good signal for a country’s GDP growth. I hope this guide was helpful for anyone interested in knowing more about the unemployment rate in South Africa.