New labour stats present a rosier picture of the crisis years since 2008 and confound some economists, writes Dewald van Rensburg
This week’s labour statistics have confounded some economists with the apparently new phenomenon of “growth-less jobs” – a sharp rise in employment when every other economic indicator predicts the exact opposite.
According to Stats SA’s latest Quarterly Labour Force Survey, covering the last three months of last year, the country gained 653 000 jobs in 2013 and slightly lowered its unemployment rate from 24.5% to 24.1%.
The “expanded” unemployment rate that includes discouraged jobseekers actually fell to its lowest level since 2009, a still-horrifying 34%.
That is despite falling economic growth and a general expectation that the unemployment rate should be rising.
The new numbers have already been seized on by the ANC for bragging rights, with deputy secretary-general Jessie Duarte this week stressing the record level of employment: 15.18 million.
The new figure was also one of the first things mentioned by President Jacob Zuma in his state of the nation speech on Thursday evening. “There are now 15 million people with jobs in the country, the highest ever in our history,” he said.
A part of the explanation is that Stats SA this week reviewed the past six years’ labour statistics in light of the 2011 census.
Thanks to the revision, South Africa has soundly beaten its old employment record from 2008.
While the new numbers do not fundamentally rewrite history, they do present a noticeably rosier picture of the crisis years since 2008 and also result in a much better job-creation scenario throughout 2013 than has been officially reported before.
The new revised estimate puts an extra 1.3 million people in the labour force, of whom a million are estimated to have jobs.
But the revision also adds more unemployed people.
The record for unemployment, using the expanded definition, was reached in the second quarter of 2013 and totalled 8.3 million unemployed and “discouraged” people against the old estimate of 7.98 million.
But this had also fallen dramatically by the end of the year to 7.8 million.
The net effect of the revision is to shave the expanded unemployment rate down by about half a percentage point for just about every quarter in the past six years.
Some economists were wary of the new stats.
This is “reminiscent of the precrisis boom”, said David Faulkner from HSBC Global Research. “We remain cautious about cheering the data, given the apparent inconsistency with other economic developments,” he continued.
Kevin Lings from Stanlib called it “clearly very impressive”, but also “at odds with recent anecdotal evidence”.
He also cited the possibility of “sampling error”, which is always present with surveys like the Quarterly Labour Force Survey.
Before Stats SA’s revision the old employment record from 2008 stood at 14 027 000, a level equalled in the third quarter last year when jobs were estimated at 14 029 000.
In the new revised stats, the old record was higher at 14 769 000 and far surpassed by the third quarter last year when the revised estimate counts 15 036 000 jobs. Since then, employment has grown further.
Where are the jobs?
The estimated year-on-year gain in jobs of 653 000 is spread mostly across the service sectors, retail and the state with manufacturing continuing its long-term contraction.
This echoes the shift taking place since the old precrisis peak in employment in 2008 with “community services” becoming the major source of employment.
This category includes the state and its roughly 2 million employees at national, provincial and municipal levels, including universities.
It also includes private security, NGOs and public works programmes.
Since 2008, these jobs have increased by at least 22.5% to 3.47 million.
The other major source of jobs has been “financial services”, where jobs grew 15% since 2008 to 2.04 million.
The formal and informal trade sector has treaded water, shedding 3% of its jobs to now employ 3.2 million.
The only sector that lost lots of ground in the crisis and did not gain it back is manufacturing, which has shed 16% of its jobs to now employ 1.77 million.
Agriculture has also lost 11.5% of its jobs to employ 713 000 people at the end of 2013.