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South African Jobless Rate Increased to 23.6%


In the midst of the recession, many unemployed individuals in South Africa stopped looking for jobs due to the gloomy recession and shrinking economy. According to Statistics South Africa, the jobless rate increased from 23.5 percent to 23.6 percent in the first three months of the year, with the number of employed people falling 267,000 to 13.37 million in the quarter. Mike Schussler, director of Economists.co.za in Johannesburg said, “People are clearly discouraged from finding work. There is certainly big discontent out there.” The unemployment rate has changed very little

 

Protests have begun in several townships near Guateng, the country’s most well-off province in the past week Protesters demand health housing, clean water and heath-care services the president promised upon election.

 

So far, the number of discouraged workers increased from 302,000 to 1.52 million, which reduced the number of unemployed from 4.18 million to 4.13 million. On July 23, President Zuma said, “Even if the economy begins to grow again next year, we will have to wait a little longer for a significant increase in new job creation.” The biggest job losses were in the trade industry, manufacturing and mining, which shed about 82,000 jobs combined.


South Africa’s unemployment rate was little changed in the second quarter after many people gave up looking for work as the economy fell into recession, threatening to stoke social tensions that have sparked a wave of protests.

The jobless rate, the highest of 62 countries tracked by Bloomberg, increased to 23.6 percent from 23.5 percent in the first three months of the year, Statistics South Africa said in a report released in Pretoria today. The number of employed people fell by 267,000 to 13.37 million in the quarter.

“These are absolutely dire numbers,” said Mike Schussler, director of Economists.co.za. in Johannesburg. “People are clearly discouraged from finding work. There is certainly big discontent out there.”

President Jacob Zuma is facing mounting pressure to deliver on his election promises to boost jobs and reduce poverty. Protests have erupted in several townships around Gauteng, the country’s richest province, since last week, with residents blockading streets and throwing stones at vehicles, in support of demands for housing, clean water and health-care services.

The number of people who haven’t actively looked for a job in the past month, referred to as discouraged workers, surged by 302,000 to 1.52 million, reducing the number registering as unemployed to 4.13 million from 4.18 million.

“The unemployment rate was relatively stable,” the statistics office said. “This stability masks a continued deterioration in the South African labor market.” Many “individuals gave up hope of finding work.”

Recession

Gross Domestic Product fell an annualized 6.4 percent in the first quarter, the most in almost 25 years, as the global recession slashed manufacturing and mining exports. That is undermining an election pledge by Zuma to cut the unemployment rate to 14 percent by 2014.

“Even if the economy begins to grow again next year, we will have to wait a little longer for a significant increase in new job creation,” Zuma said on July 23.

Anglo Platinum Ltd., the world’s biggest producer of the metal, is cutting more than 10,000 jobs and may suspend more output in South Africa, the company said yesterday.

“South Africa’s labor market is in a far worse quandary than its emerging market counterparts,” Shireen Darmalingam, an economist at Standard Bank Group Ltd., Africa’s biggest lender, said in a report today. In order to meet its unemployment goal, the government will need to create about 700,000 jobs a year, she said.

Worse Off

South Africa’s jobless rate compares with 8.3 percent in Russia, 14.9 percent in Turkey and 4 percent in Malaysia.

Zuma is also facing pressure from labor unions for higher wages. Thousands of council workers, who went on strike yesterday to demand a 15 percent wage increase, marched through Johannesburg’s city center, dumping trash in the street and disrupting local businesses. About 40,000 workers in the chemical, energy and paper industries have been on strike since July 19.

The unemployment data is based on a labor force survey of both formal and informal businesses. A survey of companies in the formal industry, published by the statistics office on June 23, showed non-farm jobs fell by 179,000, or 2.1 percent, in the first quarter.

The biggest job losses were in the trade industry, which shed 59,000 jobs in the second quarter from the previous three months. Manufacturing, which makes up 16 percent of the economy, lost 9,000 jobs, while employment in mining declined by 14,000.


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