Lothar
SA 'needs 60 000 new jobs a month'
I-Net Bridge and Sapa
Tue, 25 Apr 2006
SA's economy will have to grow by some 9.3 percent until 2014 just to halve the broader unemployment rate, a report said on Tuesday.
This is the equivalent of some 60 000 jobs per month.
The formal sector was a currently growing at about 30 000 new employees a month.
According to the United Association of South Africa's (Uasa) third South African Employment Report, to halve the narrow or official unemployment rate, which excludes those who want to work but have given up searching for employment, by 2014, GDP must grow at about 6.5 percent per year.
Moreover, South Africa had the lowest employment rate of all the countries surveyed in the third employment survey.
Only 39% employed
While only ten emerging markets were included due to a lack of data for many countries, these countries managed an average of 55.1 percent of employed persons as a percentage of the working age population in that year.
South Africa only had 39.4 percent of its working age population in some type of employment. The developed country average employment as a percentage of working age ratio is 65.1 percent and same ratio is 67.9 percent for the G7.
Annual negative decline
Of all the countries for which data is available over the last 25 years,
South Africa is the only country to have had an annual negative compounded annual decline.
The report, released on Tuesday, was prepared by Mike Schüssler, chief economist of T-sec.
The Saer added that in 2005 South Africa had formal employment growth of 4.5 percent. However, the growth in employment was mainly driven by small and medium sized firms, as large companies only showed growth of around two percent in job creation.
The report shows that while 357 000 jobs were created, less than ten percent of these jobs were created in large firms.
Medium sized companies had growth of around four percent, but it was smaller companies that created the bulk of new jobs in areas such as construction, retail and general services.
Highest growth in ten years
Last year South Africa had its highest employment growth in at least a decade. Both AMPS and LFS data indicated that South Africa had the fastest employment growth in years and the Saer statistics also underpin this trend with an estimated worker growth rate of 4.5 percent.
However this growth spurt came after years of negative and later low growth in employment. South Africa still has a very low employment to working age population ratio, Schüssler said.
In 2005 the average salary growth of formally employed South Africans was 5.3 percent, which was slightly lower than the 5.5 percent growth in 2004. Salaries after inflation grew by 1.9 percent, which was much lower than the 4.1 percent achieved in 2004.
"Nonetheless those in employment have in the last three years had a total real increase in salaries of around 7.5 percent," he added.
However, long-term employment is disappointing, said Schüssler.
Must boost GDP
"More worrying is the fact that the South African economy needs to grow its GDP at 6.5 percent to halve just the narrow or official unemployment, by 2014. To halve the broader unemployment rate, which includes people who want to work but have given up searching for work, South Africa would have to grow its GDP by at least 9.3 percent until 2014," said Schüssler.Only one country — China — has done this on a sustainable basis over a period of ten years.
Uasa urged government not to limit its growth rate target to six percent, but to look towards ten percent GDP growth.
"Government has to wipe out all the bottle necks such as skills shortages, limitations to hiring, as well as review conservative budget constraints as government remains the biggest employer with the most vacancies and may be shooting itself in the foot by not filling posts." said Uasa CEO Koos Bezuidenhout.
I-Net Bridge and Sapa
Tue, 25 Apr 2006
SA's economy will have to grow by some 9.3 percent until 2014 just to halve the broader unemployment rate, a report said on Tuesday.
This is the equivalent of some 60 000 jobs per month.
The formal sector was a currently growing at about 30 000 new employees a month.
According to the United Association of South Africa's (Uasa) third South African Employment Report, to halve the narrow or official unemployment rate, which excludes those who want to work but have given up searching for employment, by 2014, GDP must grow at about 6.5 percent per year.
Moreover, South Africa had the lowest employment rate of all the countries surveyed in the third employment survey.
Only 39% employed
While only ten emerging markets were included due to a lack of data for many countries, these countries managed an average of 55.1 percent of employed persons as a percentage of the working age population in that year.
South Africa only had 39.4 percent of its working age population in some type of employment. The developed country average employment as a percentage of working age ratio is 65.1 percent and same ratio is 67.9 percent for the G7.
Annual negative decline
Of all the countries for which data is available over the last 25 years,
South Africa is the only country to have had an annual negative compounded annual decline.
The report, released on Tuesday, was prepared by Mike Schüssler, chief economist of T-sec.
The Saer added that in 2005 South Africa had formal employment growth of 4.5 percent. However, the growth in employment was mainly driven by small and medium sized firms, as large companies only showed growth of around two percent in job creation.
The report shows that while 357 000 jobs were created, less than ten percent of these jobs were created in large firms.
Medium sized companies had growth of around four percent, but it was smaller companies that created the bulk of new jobs in areas such as construction, retail and general services.
Highest growth in ten years
Last year South Africa had its highest employment growth in at least a decade. Both AMPS and LFS data indicated that South Africa had the fastest employment growth in years and the Saer statistics also underpin this trend with an estimated worker growth rate of 4.5 percent.
However this growth spurt came after years of negative and later low growth in employment. South Africa still has a very low employment to working age population ratio, Schüssler said.
In 2005 the average salary growth of formally employed South Africans was 5.3 percent, which was slightly lower than the 5.5 percent growth in 2004. Salaries after inflation grew by 1.9 percent, which was much lower than the 4.1 percent achieved in 2004.
"Nonetheless those in employment have in the last three years had a total real increase in salaries of around 7.5 percent," he added.
However, long-term employment is disappointing, said Schüssler.
Must boost GDP
"More worrying is the fact that the South African economy needs to grow its GDP at 6.5 percent to halve just the narrow or official unemployment, by 2014. To halve the broader unemployment rate, which includes people who want to work but have given up searching for work, South Africa would have to grow its GDP by at least 9.3 percent until 2014," said Schüssler.Only one country — China — has done this on a sustainable basis over a period of ten years.
Uasa urged government not to limit its growth rate target to six percent, but to look towards ten percent GDP growth.
"Government has to wipe out all the bottle necks such as skills shortages, limitations to hiring, as well as review conservative budget constraints as government remains the biggest employer with the most vacancies and may be shooting itself in the foot by not filling posts." said Uasa CEO Koos Bezuidenhout.