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Unemployment in South Africa Soars

Unemployment in South AfricaUnemployment in South Africa reached new highs at the end of 2021, equating to more than 7.9 million individuals between October and December 2021. Typically, high unemployment rates spur predictions of economic decrease and little mobility for the coming fiscal year. The finance ministry expects South Africa’s economic growth rate to reach 2.1% in 2022, however, experts say this is insufficient “to make a meaningful dent in unemployment and poverty.” Despite the economic downturn that South Africans face, especially South African manufacturing and construction workers, there is some hope.

History of Unemployment in South Africa

Unemployment in South Africa has an extensive history and myriad reasons. The unemployment rate is dependent on which unemployment type one is referring to. There is the “standard definition” by which people between 15 and 64 actively search for employment while without a job for a specific time. Then, the expanded definition of unemployment refers to the unemployed “who have stopped looking for work.”

By the end of 2021’s third quarter, unemployment in South Africa stood at 34.9%, according to the standard definition, but stood at 46.6%, according to the expanded definition. Countless factors contribute to unemployment in South Africa. The most significant factors stem from the nation’s “legacy of apartheid,” shortages of jobs and “slow economic growth.”

Unemployment began to drop in South Africa after 2002 when the nation’s unemployment rate was about 34% if using the standard definition. It fell to 22%, the lowest percentage for decades, in 2008, but then, the unemployment rate began to rise again over the years. The 2008 recession hit the global economy and impacted jobs worldwide. South Africa has yet to recover from its losses in 2008. Furthermore, COVID-19 exacerbated the economic downturn and unemployment issues in South Africa.

COVID-19’s Impact on Construction and Manufacturing Workers

Specifically, the losses seem to be impacting the construction and manufacturing industries most in South Africa. Across South Africa, all the provinces had more than 1.3 million employees in the construction industry in the first quarter of 2020. By the last quarter of 2021, the construction industry lost at least 25,000 jobs.

Manufacturing in South Africa is suffering just as much economic downturn as construction, though, having lost 80,000 jobs in the last quarter of 2021. The manufacturing sector faced a 3.3% economic contraction in 2008. Like many areas of South Africa’s economy after the recession, manufacturing is still working to bring back more jobs and support all its workers. Though the outlook may be grim, critical steps can address South Africa’s unemployment drop.

How South Africa Can Recover

According to the standard and expanded definitions of unemployment, South Africa has many courses of action that can help those facing unemployment. The most significant hope across South Africa is that the government will intervene and create policies to help all business sectors in South Africa, not only construction and manufacturing.

There are hopes that more trade in 2022 with the U.S. and China will secure enough work for the country to help the manufacturing industry rebound.

Experts predict that the construction sector will bounce back. Projections indicate that the industry will “rebound in 2022 and expand by 9.1% in real terms.” Then, the construction sector will “stabilize at an annual average growth of 3.1% between 2023-2025, although output will not return to pre-pandemic levels during the entire forecast period.” Government investments in large-scale projects will support this recovery.

Presidential Employment Stimulus

The South African government initiated the Presidential Employment Stimulus (PES) in response to COVID-19’s impact on employment in South Africa. Overall, the program’s “aim is to create jobs and strengthen livelihoods, supporting meaningful work while the labor market recovers.”

The government implemented the PES in October 2020 to provide economic support to publicly-funded jobs. The stimulus has two phases. Phase 1 worked with regional and national departments to invest in job creation to provide the unemployed with new skills in jobs that could lead to long-term employment. As of January 2022, the PES created more than 673,000 jobs while supporting more than 140,000 livelihoods. Youths made up 85% of the program beneficiaries and females made up 63% of all program beneficiaries.

Officially, Phase 2 is currently in progress with no specific end date as yet. Overall, the PES is beneficial to South Africa in combating unemployment. PES encapsulates several different unemployment-fighting programs in South Africa, which serve to boost the economy and reduce poverty.

Looking Ahead

Several strategies have the potential to decrease unemployment and, in the long run, reduce poverty. In April 2020, the poverty rate in South Africa stood at 55.5% and the predicted economic growth in 2022 is only 2%, which would not significantly improve South Africa’s poverty levels. However, if the government continues to prioritize programs to provide employment opportunities and fund projects to ignite growth in struggling sectors, 2022 may hold greater improvements.

– Clara Mulvihill
Photo: Flickr

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Giraffe: Addressing Unemployment in South Africa

Unemployment in South Africa
Although South Africa’s GDP is the second-highest in Africa, more than 50% of the population lives in poverty. One of the factors preventing people from escaping poverty is the nation’s staggering unemployment rate. With over 28.18% of the population looking for work in 2019, South Africa’s unemployment rate is one of the highest in the world. Giraffe is a job recruitment platform that Anish Shivdasani created in 2015 with the mission of alleviating unemployment in South Africa.

3 Causes of Unemployment in South Africa

  1. Apartheid systematically excluded black people from the educational system and the skilled workforce throughout the 20th century. Recently, there are more women and people of color participating in the education system and receiving training. As a result, there are more job seekers in South Africa than there are hiring employers.
  2. South Africa’s labor market favors highly skilled workers. This results in few accessible jobs for the general public. The nation’s labor laws, which include high wages and policies that constrain employers from letting employees go, discourage employers from hiring young workers with minimal experience.
  3. Despite the government’s increased spending on education, the South African education system does not provide students with adequate training or skills necessary for the type of employment available in the formal sector. Additionally, many students are unable to finish school and are, therefore, highly likely to experience unemployment. The problems within the nation’s education system resulted in a youth unemployment rate of 55.97% in 2019.

Giraffe: A Solution

More than 1 million job seekers use Giraffe’s platform, and the software has invited more than 500,000 applicants for an interview in the last five years. The app is convenient for both employers and applicants, as it takes just a few minutes to post a job with the employer’s desired criteria. Here are three ways Giraffe addresses the problem of unemployment in South Africa.

3 Ways Giraffe Addresses Unemployment

  1. Giraffe aims to empower its employers by focusing on the problem of job retention in South Africa. The technology screens candidates so that employers only have to assess applicants that meet their qualifications. Giraffe even provides an option for a voice recording through which applicants respond to a question that the employer poses. Therefore, when candidates receive a request to come in for an interview, employers are confident that they have picked the right person for the job.
  2. Giraffe is the platform with the most medium-skilled workers in South Africa, including recent graduates and students. The app offers jobs for many levels of training rather than just providing jobs to wealthy, highly educated applicants. This could eventually serve to reduce the youth unemployment rate by providing opportunities to young people with mid-level training.
  3. In 2019, Giraffe announced that it would provide its services “for free to exempted micro-enterprises (EMEs) who are willing to hire first-time job-seekers.” This helps small businesses who are often unable to afford job-recruitment technology. In South Africa, where economic competition is rare and small businesses struggle to gain traction, Giraffe’s services could serve to invigorate entrepreneurial culture while actively reducing unemployment.

Impact of COVID-19

With more than 380,000 cases and over 5,000 deaths, COVID-19 has taken a toll on unemployment in South Africa, which experts expect to increase to 35.31% by December 2020. Additionally, 8.1% of people reported having closed their businesses or lost their jobs due to the COVID-19 lockdown in May 2020.

Giraffe’s platform will be integral to the thousands of people who lose their jobs in the wake of COVID-19, as more people will be looking for work once the virus subsides. The company also adapted to COVID-19 by educating other start-ups about how to conduct business productively from home.

Looking Forward

In the future, Giraffe aims to provide job training through its app. This should provide even more opportunities for job seekers to improve their skills, become qualified for higher-paying jobs and to meet more employers’ criteria. The start-up also intends to expand internationally and to continue to narrow its focus on small businesses.

Giraffe is a fast-growing company using modern technology that has garnered support and funding from around the world. Unemployment remains one of the most pressing issues in South Africa. However, companies like Giraffe provide tangible solutions that will help address the issue of unemployment in South Africa.

– Melina Stavropoulos
Photo: Flickr