Job bloodbath ‘not so’

ERROR OR FACT?: Some analysts have questioned the latest Stats SA figures showing unemployment rising by a staggering 521000 jobs in the first quarter of 2016 this year. PICTURE: SABC

There is no such thing as a “bloodbath” in the country’s job market as experts question the validity of the latest quarterly employment survey.

According to the latest survey released by Statistics South Africa last week, unemployment went up by a staggering 521000 jobs in the first quarter of 2016.

Statistics South Africa also said the total unemployment rate was 26.7%, with an absorption rate of 43% and a labour force participation rate of 58.7%.

The figures paint a dark picture for the South African economy expected to grow at levels below 1% for 2016.

Other analysts have delved into the figures, questioning the validity of the unemployment rate and the methodology of calculations used by the bureau of statistics in arriving at the figures.

Trade and industry policy economist Neva Makgetla yesterday noted that the astonishing figure of 2.2% decline in employment in a single quarter was unreliable and reflected an error of calculation by Statistics South Africa.

In her trade and industry policy strategy report, The Bloodbath That Wasn’t, Makgetla said the data likely reflected an effective correction “to overestimates of job creation in the previous four quarters, rather than a sharp contraction in the real world”.

“Obviously, it seems unlikely that this kind of jobs bloodbath could have occurred without significantly more impact on communities and workers. “So what is really going on? The short answer is that we can’t tell because of statistical problems,” she said.

She said figures showed that yearly employment rose by 204000 or 1.3%, in line with the previous year as well as with expected gross domestic product (GDP) growth.

“The only time since 2008 when more jobs were reported lost in a single quarter was in the third quarter of 2009, when the economy expanded by just 0.23% following three quarters of decline during the global financial crisis – the worst economic downturn since the Great Depression,” she said.

However, Cosatu spokesperson Sizwe Pamla said although it was difficult for unions to estimate employment figures, the federation’s observations were that most sectors in the economy were applying for section 187, which relates to company retrenchments.

Freedom Market Foundation labour economist Loane Sharpe said the Statistics South Africa figures did not count the informal sector correctly, but were most accurate in assessing the formal sector.

Sharpe said losing jobs in the formal sector was a concern as these jobs were the most secure, decent and paid well.

“The DTI cannot have it both ways. When unemployment grows they question figures, when unemployment shrinks they question figures. They do not propose an improved statistical methodology, they simply have a feeling that the numbers are wrong and may not reflect the true picture,” he said.-Vusumuzi Shabangu