Labour market report bad news for the unemployed
Those with jobs are likely to remain employed, and those who have been unemployed for more than a year have less hope of ever finding a job.
This is according to the latest labour market dynamics report released by Statistics South Africa, which reflects that employment trends are showing an entrenchment of the status quo.
“The analysis suggests that the employed are most likely to stay employed, with as many as 93.2% keeping their jobs. The unemployed will struggle to get jobs, with only 10.6% finding employment.”
The research shows that experience is the determining factor in how likely a person is to gain formal employment. As many as 14.1% of unemployed people with work experience had found a job in the next quarter, against only 6.2% of those without work experience.
This factor was of exaggerated importance for young people, where those with work experience were six times more likely to find a job than those without, the study said.
This notion held true at all levels of education. “Even at the tertiary level, whereas 9.6% of those with work experience found a job, only 6.5% of people without work experience in that education category found a job,” the study noted.
Scarring effects affect future employment outcomes
And the longer unemployment persisted, the less likely a person was to find a job, the statistics showed. Almost 22% of short-term unemployed adults (those who had been unemployed for less than a year) found jobs in the next quarter.
Only 7.9% of those who had been unemployed long-term (for more than a year) found jobs in the same period of time.
For the youth, 15.7% of those who had experienced short-term unemployment found jobs in the next quarter, and only 6.9% of young people who had been unemployed long-term had the same success.
“Long-term unemployment increases so-called scarring effects, which affect future employment outcomes,” said the report.
“The consequences of long-term unemployment, particularly for the youth, include the loss of work experience and the erosion of skills. When young people experience unemployment early on in their working lives, it could result in wage scars that continue to depress employment and earnings prospects for decades to come.”
The number of people in long-term unemployment in South Africa increased by more than a million over five years to 3.1-million in 2012, up from 2.1-million in 2007.
Youth Wage Subsidy Bill
Kevin Lings, chief economist at Stanlib, said the findings underscored the importance of helping the youth enter the job market.
“Helping young adults get their first formal-sector job is absolutely critical to a more vibrant labour market in South Africa,” he said in a note.
“Overall, the [report] argues overwhelmingly that the country should be doing a lot more to help young adults find their first job, especially in the formal sector.”
Programmes such as the so-called Youth Wage Subsidy Bill, which was recently passed in Parliament, would address this need, he said.
“It also seems logical that there should be a much closer link between education institutions and work opportunities. Equally, there needs to be a lot more support for helping people who have lost their jobs find additional work, especially if it requires re-training.”
The good news is that, according to the statistics, if you’re in, you’re in. For the time period covered by the report, the chances of staying in employment for those who had scooped a job offer was more than 93.2% in the formal sector and 90.2% in the informal sector.
Retention rates are high
Retention rates were high across all race groups, but highest among the Asian/Indian population at 98%, followed by whites at 97.3%.
Coloureds had the highest unemployment retention rate at 69.6%, followed by black Africans at 66.6%. A total of 56.8% of black Africans were recorded as discouraged jobseekers, the highest of all race groups, followed by the coloured population at 46%.
Among both men and women, the number of discouraged workseekers had increased since 2008. Total employment in South Africa increased by only 58 000 jobs between 2007 and 2012, rising from 13 467 000 jobs to 13 523 000 jobs.
In every year, there was a higher number of unemployed women than men, and women were also absorbed into the workforce at a lower rate.