Author: Mike Schüssler
The one thing that everybody forgets to compare South Africa on is our labour force participation rate. We all read the headline unemployment number or trey to work out the broader unemployment number which includes discourage work seekers. Just as a reminder the labour force includes everybody who works, or who wants to work and can start reasonably quickly (the official unemployed “workers”).
The latest labour force survey showed a downward trend in the unemployment number and reasonable improvements in the employment number; however the biggest increase of all was of adults who were not economically active. The term “Not Economically Active” may be slightly misleading in that it includes students and housewives where people actually add value at least to their own lives. But what is concerning this that the “Not Economically Active” part of the adult population (which includes discouraged work seekers too) increased with 5% over the last year or with 711,000 people.
Out of all the major categories in the quarterly Labour Force Survey the “Not Economically Active” population showed the highest growth of all. This is the most consistent economic trend in South Africa over the last two decades. By being “Not Economically Active” you cannot be unemployed or at least officially unemployed anywhere in South Africa or indeed the world. Not Economically Active means you actually don't want to make the effort to work or to find a job or you don't think earning an income is a great idea, if I were horrible I would call you lazy if you were not economically active.
What concerns me is that these survey statistics rely on definitions. And by making small changes to these definitions, countries all around the world have succeeded in bringing down their official unemployment numbers for years. Two factors in the definitions have simple trends. The term employed today means not 40 hours of work or even 20 hours of work a week no it means one hour of work week even when not been paid in anything but a belief in the future. To be honest I have lost track all the official definitions of unemployment years ago wanting the job was enough to make you unemployed, while today you have to have looked for a job in the last week you must be prepared to start in the next day or two and you cannot merely have a CV lying to personnel agency's Often there is big jubilation in the media when unemployment rates for and as very few of us actually watch the changing definitions of terms such as labour force, unemployed person, discouraged work seekers and even the term employed. You would be considered employed if you helped your father in the Spaza shop for an hour in the last week and he gave you a broad smile and a hard and said thank you for helping us in the family.
Summing up it is very easy to be employed but it is becoming increasingly difficult to be unemployed based on changes in definitions in South Africa and in other countries around the world. This means at least one part of the labour force is very difficult to become part of while the other part is relatively easy. The labour force participation rate is simply the employed and the unemployed combined as a percentage of the adult population.
When you compare South Africa's labour force participation rate with that of 189 other countries you find that South Africa has one of the lowest labour force participation rates in the world today. We are down amongst countries such as Iraq, the occupied Palestinian territories, Iran, Egypt and Tunisia. As one can see the countries with very low labour force participation rates are generally either wall zones or countries where Muslims believe that woman should not work and therefore they would not be part of the labour force.
The International Labour Organisation keeps statistics on the labour force participation rates and the South African one has been falling for many years now. Our labour force participation rate of 53.6% in the latest quarterly Labour Force survey would put us in the bottom 10 countries in the world today.
The employed part of the labour force as a percentage of the adult population in the country is the third lowest number in the world today. It says a lot that are unemployment number is one of the highest in the world today even though it is very difficult to make this definition.
Not only does South Africa have one of the lowest employment rates in the world it also has one of the lowest employment rates in the history of the world, despite the fact that labour is very well protected in South Africa. Aven while the definition of somebody employed is one of the widest in the world today. Believe it or not both Tunisia and Egypt are our neighbours in the labour force participation rate in the world.
Taking a broader look at labour force statistics one gets the clear impression that South Africa has not heard a decent conversation about getting out of the muddle. Decent conversation is difficult when one does not have a broad view of statistics and the definitions.