South Africa in need of policy implementation that would incentivize job creation as labour market recovery remain fragile – Department's report
29 Oct 2012
The South African labour market’s recovery still remain fragile, with limited jobs being created against a large number of job seekers, a Department of Labour (DoL) Report has revealed.
According to the Department of Labour ’s - Job Opportunity and Unemployment in the South African Labour Market Report - the situation is true because the labour absorption rates in the country have remained almost ‘stable’ in particular over 12 months in the financial year 2011/12.
Through the report, the Department of Labour provides an overview analysis on the number of vacancies recorded through media against claims for ordinary unemployed received from the Unemployment Insurance Fund (UIF) from April 2011 to March 2012. The department also uses labour force statistics from the Statistics South Africa.
The report is intended to inform policy makers about the gaps identified regarding skills shortages in order to develop interventions that could assist to fight the triple challenges of unemployment, inequality and poverty in the country.
Overall, the report shows that almost the same number of vacancies that were recorded in the Department (60 433 in 2011/12 but 60 345 in 2010/11) as compared to the previous financial year 2010/11. When job vacancies remain low for a sustained period, job losers as well as new entrants in the labour market are unable to find work quickly. They have a greater risk of becoming long term unemployed,” the report said.
The report further indicates that the highest vacancies advertised were full-time positions at 89.4% and 10.3% being contract employment with part-time as the lowest at 0.3%.
Amidst all this the report said: “The skill mismatch still remains a problem due to move from unskilled and semi-skilled to skilled labour absorption in the South African labour market”.
This is proven by the highest demand of professionals and managers with the lowest demand of machinery operator and drivers, elementary workers and sales workers.
According to industrial analysis, the community services and personal services industries shows a huge improvement in demand, increasing by 587 more than a half, to 1 021 of quarter four from 434 in quarter three of 2011/12.
The Job Opportunity and Unemployment Report had noted an alarming statistics, that out of 4.5 million jobless in March 2012, 71% are youth, 67% are unemployed for more than one year, 47% had not completed secondary school and about 31% are new entrants into the labour force.
“So South Africa as a small open economy is not alone with this high trend of youth unemployment as we move into uncertainty about the new era of politics in the Eurozone. This implies that the youth problem is now a worldwide challenge. In South Africa, as the economic growth remains locked into a 3-4% growth path, it is recommended that sustainable solutions be sought by all parties in dealing with youth unemployment,” the report said.
The report highlighted a number of policy implications to address the challenge of job creation. These include:
- There is a need for strong sustainable economic growth to increase vacancy rate, hiring and a sustained job expansion.
- The continued fragility of the economy and the sustained jobless recovery represent a call for immediate policy to expand employment that would incentivise job creation.
- The “youth wage subsidy” policy could provide a useful incentive to speed up private sector employment growth. It needs to be tested in the labour market.
- There is a need for government to focus and support the acceleration of growth of labour intensive industries.
In conclusion, the report noted that the unemployment situation is still very tense and the South African labour market might not be able to achieve the job creation target of 5 million jobs in 2020.
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Issued by: Department of Labour
29 Oct 2012
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