Latest news with #GerrieFourie
The Citizen
3 days ago
- Business
- The Citizen
Are you employed if you work an hour a week? Stats SA says yes
The unemployment rate depends on your definition of employment … It's complicated: A single hour of paid work the week prior to being interviewed by Stats SA counts as 'being employed' – and being 'employed' could put a social grant at risk. Picture: Adobe Stock It happens from time to time that someone questions the integrity of the survey methods and accuracy of the figures produced by Statistics SA. The result is always the same – the head of Stats SA comes out all guns blazing to prove the statistical validity of his team's work. The most recent debate around Stats SA's figures erupted when Capitec CEO Gerrie Fourie remarked that the unemployment rate in South Africa could be as low as 10%. Stats SA sticks to its estimate of an official unemployment rate of nearly 32.9% – and the expanded unemployment rate of 43.1%. Fourie argues that Stats SA does not count everyone who is working in the informal sector. His view is probably influenced by the fact that Capitec has 24 million clients. He noted that nearly three million of Capitec's clients earn an income without formal employment, and more than one million use their bank accounts to operate a small business. Fourie says the data suggests that some four million people are earning an income in the informal sector. In addition, the latest figures from the different banks in SA show that Standard Bank has around 12 million local clients, Absa has 12.7 million, FNB has 8.6 million, and Nedbank has 7.6 million. TymeBank states that it has 10 million clients. The total comes to nearly 75 million. It raises the question of why anybody would need a bank account – and apparently multiple accounts at more than one bank – if they don't have money or don't earn money somehow. Perhaps these figures support Fourie's argument. ALSO READ: Is South Africa's unemployment rate really only 10%? Not so, says Stats SA head But the Capitec CEO received more criticism than support. Statistician-General Risenga Maluleke issued a statement saying that Stats SA does measure the informal sector. 'The informal economy is not ignored,' says Maluleke. 'Stats SA produces several statistical products that measure this sector, including the Quarterly Labour Force Survey (QLFS) and the Survey of Employers and the Self-Employed. The informal sector is measured, tracked and reported on consistently. Stats SA follows the guidelines set by the International Labour Organisation (ILO) for defining the informal sector, which is characterised primarily by the registration status and size of enterprises or businesses. 'Our methods stand open to rigorous examination, inviting scrutiny to ensure integrity and trustworthiness. 'The data we produce is publicly accessible, fostering a culture of openness,' he adds. ALSO READ: Minister agrees unemployment statistics should include work in informal sector 'Our concepts, definitions and classifications are meticulously crafted, guided by the highest global standards and best practices. We take pride in our commitment to transparency, clearly articulating what we measure, and the methods employed to derive our insights.' Maluleke appeared on national television to assure people that the statistics are accurate. He took Fourie on: 'If he says unemployment is sitting at 10%, it means 10% of 25 million, we'd have 2.5 million people who are unemployed in South Africa and then it means that we have 22.5 million people who are employed. The Sars [South African Revenue Service], from personal income tax doesn't even have such numbers for starters.' He says it is incorrect and misleading to suggest that Stats SA somehow 'misses' those who are employed in the informal sector. The latest QLFS for the first quarter of 2025 estimates the working age population at 41.7 million of which slightly more than 25 million are considered to be in the labour force. The rest of the people are not working and not looking for work, including those still at school or studying, in jail or those who have a (wealthy and generous) spouse or family to provide for them. Around 16.8 million are classified as employed, including 3.3 million in the informal sector and more than one million in private households (domestic workers and gardeners). That leaves 8.3 million unemployed and looking for work. There are another nearly 3.5 million people who are classified as discouraged workseekers. The Stats SA report defines a discouraged workseeker as 'a person who was not employed during the reference period, wanted to work, was available to work or to start a business, but did not take active steps to find work during the last four weeks' preceding the date of the survey. ALSO READ: Unemployment underscored by weak economic activity – 1 in 3 unemployed in SA The employed, by gender and hours of work Source: Stats SA How Stats SA gets its data Stats SA says its sampling method is statistically correct and representative. The QLFS surveys households directly and collects information from approximately 30 000 dwelling units. It collects data on the labour market activities of all individuals aged 15 years and above in the selected dwellings. Desiree Manamela, chief director of labour statistics at Stats SA, says data collectors visit the selected dwelling units once every three months and interview all the people residing in the dwelling. 'There can be multiple households within a dwelling unit. Everybody in those households will be interviewed,' she says. 'The survey is structured in such a way that we don't simply ask people whether they are employed or unemployed. There is a series of questions that we ask people within households and then we analyse the answers based on international standards to classify them according to different labour force statuses – meaning individuals are classified into three mutually exclusive and exhaustive categories following ILO hierarchy. 'We have employed persons, we have unemployed persons, and we have people that we call inactive. These three labour market statuses are supposed to sum up to the working age population,' she says. 'Employment takes priority over unemployment, and unemployment takes priority over inactivity. The first status that we derive is employment. 'We first want to know, of the people who are in the working age population, how many are employed. Then, once you have classified the people that are employed, we move on to the next status, which is unemployment. Now we ask people questions where we are going to classify them into the unemployed or the inactive. Unemployment will take priority over inactivity.' ALSO READ: 'Government initiatives alone can't address SA's unemployment rate' Odd jobs regarded as employment It is quite a lengthy questionnaire that collects a lot of data. One should keep in mind, though, that the questionnaire has been designed to ensure that, based on individual responses, respondents are only asked questions that are relevant to them. Questions are arranged in six sections totalling approximately 30 pages. The questionnaire starts by identifying the respondents and covers basic aspects such as age, population group, sex, marital status, and education. The questions on employment details are asked of all persons aged 15 years and above who indicated that they did work for pay or profit – even if a person worked only for an hour during the week preceding the interview – or if they were temporarily absent. Odd jobs for payment and even unpaid work in a household business is regarded as employment. Stats SA asks about the type of work, main tasks at work, working hours, type of business, type of products produced, income, and participation in public work programmes. ALSO READ: Economy sheds jobs again in first quarter, unemployment worse than year ago Time-related underemployment The QLFS collects data on how many people worked and for how many hours. A single hour of paid work during the past week classifies a person as employed. Some employed persons may report that they would like to work additional hours if the extra hours are paid. This information assists in deriving persons in time-related underemployment. The QLFS report for the first quarter of 2025 discloses that of the 16.8 million employed persons, only 9.4 million work a standard work week of 40 to 45 hours. Approximately 518 000 'employed' persons worked less than 15 hours a week. Stats SA measures this time-related underemployment by the more than 781 000 workers who said that they would like to work more hours for additional pay. We asked Manamela for a simple explanation of these statistics to confirm the information. 'We don't say a person who is working 40 hours a week is employed and somebody who is working only 20 hours is half-employed. You are either employed, unemployed or inactive; and for those employed, if they work less than 35 hours a week and are available and want to work more hours, then they are regarded as underemployed,' she says. These statistics prove Fourie wrong. If anything, most people may actually think that Stats SA is underestimating unemployment. ALSO READ: SA youth not unemployed, rather under-employed People lie or leave out information There is also the possibility that the respondents in the survey are lying to the data collectors when asked whether they are employed. There are many reasons to lie, including those among the 18 million social grant beneficiaries who also work a day or two per week. Evading income tax is another reason to lie. And criminals wouldn't be honest. Robbery, hijacking, drug dealing, cigarette smuggling, rhino poaching, investment scams, and prostitution generate an income, but these 'self-employed workers' won't reveal their employment status. They simply bank the cash quietly. This article was republished from Moneyweb. Read the original here.
News24
19-06-2025
- Business
- News24
Capitec CEO isn't wrong: Unemployment data needs work
• For more financial news, go to the News24 Business front page. In June 2025, Capitec CEO Gerrie Fourie suggested that South Africa's real unemployment rate might be closer to 10% than the official 32.9% - the reaction was swift and unforgiving. Critics accused him of 'madness,' misunderstanding labour metrics, and trivialising the economic struggles of millions. But amid the furore, Fourie touched a nerve, one we can no longer afford to ignore. We need to be forthright. Any figure of the unemployment rate represents an enduring crisis that continues to erode our democratic dividend and undermine our efforts to build a more equitable and prosperous society for all South Africans. At the same time, we must all visit the fundamental assumptions guiding our understanding of the problem itself. What if the way we measure unemployment is not just analytically contested but structurally flawed? What if the very tools we rely on to understand our labour market are obscuring its most vital dynamics? This is not to say that our government, through Statistics South Africa, has been dishonest or missed the point through the years, but rather that the instruments and definitions used, while internationally accepted, may not fully capture the unique complexities and realities of South Africa's diverse economy, particularly its significant informal sector. South Africa's massive informal sector fundamentally challenges standard unemployment metrics. Millions officially classified as 'unemployed' are actively engaged in vital, though precarious, economic activities, such as street vending, waste recycling, home-based production, subsistence farming and numerous micro-services. These generate essential income and sustain communities, forming a vast parallel economy. Therefore, standard definitions, which prioritise formal employment structures like fixed hours, registered businesses, and regular wages, fail to capture this fluid, irregular, and self-directed work, misrepresenting significant economic participation as idleness. The fact that one is not seeking employment, is discouraged, or does not report any 'income' or 'wage' in the conventional sense, should not imply economic inactivity or irrelevance. Limitations Our unique economic landscape, shaped by historical exclusion and inequality, demands context-sensitive metrics. The rigid employed-unemployed binary obscures critical nuances, including underemployment, sporadic work, unpaid family labour and discouraged workers who actively survive informally. Relying on tools designed for smaller informal sectors misdiagnoses exclusion and risks policies that fail to support or integrate this vital economic segment. Admittedly, the official unemployment rate, derived from Statistics South Africa's Quarterly Labour Force Survey (QLFS), uses International Labour Organisation (ILO) standards, as rightly confirmed by our Statistician-General, Risenga Maluleke. It is important to acknowledge that although the ILO provides a standardised framework for measuring unemployment, it has limitations. A key limitation is the exclusion of 'discouraged workers,' those who have stopped actively seeking work, from the official count. This can lead to an underestimation of the true extent of unemployment, particularly among women. Additionally, the ILO definition relies on individuals actively seeking work in the past four weeks, which may not capture those who have been unemployed for extended periods and may have become less active in their job search. These standards are internationally recognised and sound in principle; however, they have limitations. Statistically invisible They were likely designed for economies where formality dominates, yet they tend to undervalue the reality of emerging markets where survivalist and informal economies are not only widespread but essential. It is necessary to emphasise that South Africa has a particularly complex labour market: sophisticated in parts yet exclusionary in others. Many South Africans are not unemployed in the literal sense; they work long hours selling food on the roadside, fixing shoes, braiding hair, or delivering packages via digital platforms. However, because their activities often lack legal status, banking records, or employer verification, they are statistically invisible. This invisibility is not benign. As Michel Foucault noted, how a state 'sees' its citizens, through censuses, surveys and indicators, is not just descriptive but political. It determines where resources flow, which sectors are prioritised, and who is included in the policy imagination. Troubling reality Across the Global South, countries with expansive informal sectors report strikingly low unemployment rates. India, with an informality rate above 90%, records unemployment rates under 5%. Mexico, Nigeria, Zimbabwe and Ethiopia—despite structural challenges—report similarly low rates. South Africa, with an informal economy estimated to comprise 40% of total employment, somehow reports the highest unemployment rate in the world. There is a profoundly troubling reality in our labour market, mirroring trends across the Global South: the relentless informalisation of the African worker. As scholars like Guy Standing illuminate, this creates a growing 'precariat' or workers stripped of stable contracts, benefits and legal protections, existing in perpetual insecurity. This is evident in models like Shoprite's Sixty60 delivery service. Reports suggest deep labour rights transgressions and potential circumvention of migration laws, potentially relying heavily on vulnerable foreign nationals and drivers operating without proper licensing. While such practices may fuel corporate profits and boost tax collections, they fundamentally erode worker dignity and flout our migration laws. Enhanced tax revenue may be problematic when achieved through the systemic exploitation and informalisation of labour. We urgently need businesses committed to ethical conduct, recognising that loyal and honest citizenship demands treating workers with dignity, not as disposable cost centres. Dogmatic fixation on formality This crisis reflects our nation's unresolved struggle: building a vibrant economy that simultaneously protects labour rights. Our history is one where economic progress was built upon the foundation of cheap, exploitable black labour. Disturbingly, many companies remain anchored in this unpalatable logic. Their substantial profits are too often subsidised by poverty wages and resistance to adhering to labour laws, perpetuating a modern form of exploitation. The Shoprite case highlights a critical flaw in our current statistical lens: even those formally recognised as 'employed' can face severe decent work deficits – insecure incomes, unsafe conditions and denied benefits - which our rigid metrics fail to capture. Formal employment status, in such contexts, offers no guarantee of dignity or security. The human cost of this informalisation extends far beyond wages into wellbeing and visibility. Informal wage workers at the foot of the formal economy, such as Sixty60 riders, face significantly heightened health and safety risks due to unregulated work environments. In South Africa, informal workers experience injury rates 2-3 times higher than their formal counterparts, alongside severe psychological stress, with women disproportionately affected. Critically, this precarity is structurally reinforced, since only 10.7% of informal enterprises hold municipal licenses, thereby denying workers access to basic infrastructure and legal recourse. Unlike the often entrepreneurial, family-driven informality seen in parts of West Africa or South Asia, South Africa's informal sector reflects not prosperity, but our dogmatic fixation on formality. Suppressing informality does not create formality; instead, it traps workers in a vulnerable, invisible underclass. Right tools, wrong terrain The Sixty60 paradox, characterised by soaring profits and tax contributions alongside alleged deep-seated worker indignity, exposes the dangerous fallacy of equating state revenue with societal well-being or ethical progress. True dignity requires labour security and voice, neither of which is inherent in precarious gig work. To turn moral clarity into action, we will work with other government entities, including Statistics South Africa and the National Treasury, to address our concerns. We will also ramp up our labour inspection efforts to improve enforcement and compliance. Our view is that this disconnect is not purely economic but methodological. We could be using the right tools for the wrong terrain. Again, we must stress that this is not about pushing the black majority further into an abyss; we acknowledge vast swathes of surplus labour that continue to characterise the South African labour market. However, our immediate concern is solely whether the statistical measures accurately reflect the nature of economic activity, particularly informal survivalist efforts, within this complex reality. As the Department of Employment and Labour, we are addressing this definitional challenge. In our internal policy discussions, we are advancing a more nuanced classification of employment, distinguishing between formal unemployment (individuals actively seeking or available for formal sector work) and economic participation (those actively engaged in the informal economy or self-employed outside regulated sectors). This is not an attempt to mask the crisis or rewrite history. Instead, it is a genuine bid for clarity, so that policymakers, economists and communities alike can operate from a shared and realistic understanding of South Africa's complex labour market dynamics. Resilience is not success Yet, our data underscore a profound crisis: official unemployment stands at 32.9%, rising to 43.1% under the expanded definition (which includes discouraged job seekers). Youth unemployment (15–24 years) is staggering at 62.4%, while graduate unemployment stands at 11.7%, revealing deep-seated structural challenges, even for the educated. Furthermore, there are currently 3.8 million young people classified as NEET (Not in Employment, Education or Training). These figures demand urgent, comprehensive reform and a labour market framework that recognises the diverse forms and complex realities of all economic activity, both formal and informal. Behind each statistic lies a human story of effort, ambition, exclusion and resilience. It is essential to stress that this resilience should not be mistaken for success; the informal sector is not thriving, but merely surviving under conditions of precarity and exclusion. Research from the UCT-Harvard Growth Lab identifies South Africa's informality rate as 'abnormally low' relative to peer economies, not due to prosperity, but rather to state-imposed constraints, including hostile zoning laws, bureaucratic red tape and over-policing. Crucially, unlike entrepreneurial, family-driven informality in West Africa or South Asia, South Africa's informal economy is predominantly employee-based, precarious and excluded from support systems. This vulnerability is strikingly illustrated by the fact that only 10.7% of informal enterprises held a valid municipal licence in 2023. These figures demand urgent, comprehensive reform and a labour market framework that recognises the diverse forms, complex realities and systemic barriers facing all economic activity, both formal and informal. We need to distinguish between informal and illegible. Just because someone is not counted does not mean they are not making a contribution. New tools needed If we want a policy that reflects the realities on the ground, we need new tools. A hybrid data ecosystem, combining the QLFS with alternative indicators such as mobile money flows, anonymised bank transaction data and digital platform work patterns, can provide a more complete and human-centred picture of labour in South Africa. Crucially, unlocking this invisible economy requires collaboration. Private sector players, including Capitec, which processes billions of township-based transactions annually, may hold part of the key to decoding our invisible economy. However, this must be done with ethical safeguards, public oversight and institutional collaboration, not in corporate isolation. Gerrie Fourie may have overstated his case, but he also illuminated a critical truth: our unemployment narrative is not just technical; it is moral. A country that fails to see the economic contributions of its people, no matter how unorthodox, fails to recognise and thus harness its potential. We are at a crossroads. Either we continue to wage policy wars based on partial metrics, or we build a statistical framework that honours the full complexity of labour in South Africa. One pathway leads to ongoing crises, while the other results in inclusive renewal. Let us choose to see. Let us choose to count. Let us choose to act. Nomakhosazana Meth is Minister of Employment and Labour.
IOL News
17-06-2025
- Politics
- IOL News
Dr Pali Lehohla: Debating the labour force survey- a response to Fourie's critique
Gerrie Fourie. Image: File. When Ashraf Gadar said he sensed anger in my voice during an interview on the topical labour force survey, I said certainly there is anger in my voice. This is because if Fourie's rendition of the Labour Force is an understanding and representative of what goes on the in Boardrooms of business in South Africa then only god must help us. Through Statistics South Africa the citizens of this country have engaged in a dialogue about their lives and have made South Africa and South Africans discoverable and knowable to themselves and about themselves. Anything else equivalent to what Fourie was saying is abracadabra and can only be adjudicated by magicians. You see StatsSA runs a national statistics system which implies that it has designed a project based on systems design and driven by systems thinking. In such a system I had to listen to Tito Mboweni when he said, Statistician-General the Producer Price Index (PPI) is fine but the Consumer Price Index (CPI) does not make a lot of sense. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ I had to listen to John Stopforth of Investec when he said the housing index is wobbly. I had to listen to Trevor Manuel when he arrived huffing and puffing from Automn meetings in Washington asking about why the CPI is stubbornly on the up. Certainly, the system did not cohere then. The reason was that the national treasury had stubbornly refused to depart with a R 6 million for a general household survey that would have provided us weights for housing measurement component in the CPI. We put up a fight, they would not budge. Since 2003, StatsSA has not made any silly mistake save for a typo on the manufacturing statistics matrix over which I tendered my resignation in 2005, but the resignation was not processed. The typo in a thousand cells is a discussion for another day, suffice to say yet again there, the 2005 typo emerged from a 2003 dossier alleging corruption and theft of money and the process I intended to implement to avoid such was sabotaged internally. It is a topic for another day. There was an arduous process of reengineering the CPI which included direct price observation in outlets by data gatherers instead of telephone based surveys which could run the risk of the Portuguese pyjama CPI syndrome. One is mindful of the fact that citizens inform themselves by freely providing their most precious of themselves to Statistics South Africa in the firm belief that society cares and those to whom society has entrusted with the care will respect their trust which is the result of what they have provided for policy attention. StatsSA processes the responses dutifully following acclaimed standards. The United Nations Statistical Commission convenes annually in New York to address methods. Over five days the bean counters of the world prepare and present methodological programmes on population, economic and social statistics. They interrogate geospatial data and now the focus is on information technology and the world of data and how statisticians lead in this role. The World Data Forum which Statistics South Africa had the benefit of hosting as an inaugural programme of the commission in 2017 shows where Statistics South Africa ranks in the world. Whilst questioning and contesting is not a problem by itself, but failure to inform oneself before contesting can be a source of great anger to the listener, especially when the soliloquy becomes equivalent to somnambulism. Reading Fourie's soliloquy was annoying because it showed that he did not bother to read the methodological notes because if he did, he would have answered himself. But more irritating and annoying were the ANC MPs in the portfolio committee and Minister Tau who amplified Fourie's soliloquy and resisted to pay attention to the MKP and EFF MPs who actually understood and explained in detail not only the numbers but expatiated on the context of their meaning and implications. As though it was not enough my brother Siyabonga Radebe has amplified the debate and I thought I should shed light on this before it goes out of hand based on misinformation and speculation. You see Bungani I have to provide history to the QLFS. I may appear abrasive but I am actually factual and the concerns and comparative analysis is all answered in a report that prompted StatsSA to adopt a quarterly labour Force survey. In 2004 government was concerned that despite rise in fixed capital formation and growth in the economy, there was no corresponding growth in jobs. Then we were conducting the Labour Force Survey twice in a year. Given the concern, I roped in two experts who provided a critique on the labour force survey and one of them was from Brazil. They made a number of observations and recommendations that we adopted. These included amongst others line of questioning but the most fundamental recommendation was to run a quarterly labour force survey to capture seasonality. We then roped in two Canadian experts from Statistics Canada who helped us to answer and implement the recommendations and their counterpart group was under the leadership of a formidable Yandi Mpetsheni who ran with the ball over the four years of implementation of methods. A parallel survey of the old method and the new method was conducted throughout and a major one for implementation was in 2007. Linking factors for the old and new survey were implemented and in 2008 the new quarterly survey was implemented after a four year period of careful work. Bungani's balancing act from interesting corners of the mouth is appreciated. However, if he read the expert critique and recommendations, as well as the report on implementation of the recommendations which considered especially comparisons with Brazil and other countries, he will discover that he has no case to argue. There is no legacy to protect on my part Bungani nor language to polish. When a lie is told there is no reason to give it a different word. It is simply a lie and when an argument does not make sense it is called nonsense in the English language and when nonsense is given wheels and wings to fly it is called rubbish. Those who wish to opine should do so from research rather than from a hailer. Two issues stood out in the expert report, the question of agricultural activity linked to land ownership and high levels of concentration answers Bungani's balancing and supposition act. That is why South Africa is unique and an outlier. The land question is not just a fleeting imagination by the EFF and other parties in Parliament. It is at the core of differentiated employment status with all other countries referred to. South Africa Land Act systematized impoverishment of skill, practice, participation and empowerment. So, it is not surprising that its unemployment is an outlier, it is an outlier in land ownership too. All the other speculations have no room to sleep in this debate. Closed case. If there is anything important that Fourie's provocation elicited in this debate is the land question and parliament should engage fully if it wants unemployment of South Africa to be in line with that of other comparable countries. Dr Pali Lehohla is a Professor of Practice at the University of Johannesburg, a Research Associate at Oxford University, a board member of Institute for Economic Justice at Wits and a distinguished Alumni of the University of Ghana. He is the former Statistician-General of South Africa. Dr Pali Lehohla is a Professor of Practice at the University of Johannesburg, among other hats. Image: Supplied BUSINESS REPORT Visit:
TimesLIVE
17-06-2025
- Business
- TimesLIVE
To allow ignorance about Stats SA to run supreme should not be allowed
I had hoped the forthcoming title And December Came: The Odyssey of Leadership —Navigating in Silence and Building Audaciously would hit the shelves in another six months, but a glimpse and preview had to come earlier. It was prompted by the unwelcome and vulgar articulations of Gerrie Fourie ( the CEO of Capitec, and trade and industry minister Parks Tau ( who decided to echo Fourie, and then ANC choristers were unleashed to lampoon the national numbers. Baas Fourie had spoken. ..
IOL News
13-06-2025
- Business
- IOL News
The real story behind South Africa's unemployment figures
South Africa's unemployment rate has risen to 32.9%. Image: File SOUTH Africa's unemployment rate is a lightning rod for political debate, economic anxiety, and public frustration. In the wake of Capitec CEO Gerrie Fourie's claim that the 'real' unemployment rate is closer to 10%, far below Statistics South Africa's official 32.9%, the national conversation has reignited. Critics of Statistics South Africa (StatsSA) suggest that the official figures are not just technical measures but political artefacts that erase the economic activity of millions in the informal sector. But does this criticism stand up to scrutiny? The answer is more nuanced than the headlines suggest. Capitec CEO, Gerrie Fourie. Image: Supplied Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Why Would Anyone Overstate Unemployment? Let's start with the most provocative claim: that StatsSA and the government have a motive to overstate unemployment. This accusation defies both political logic and institutional practice. High unemployment is a political liability, not an asset. It invites criticism, undermines investor confidence, and puts government performance under the microscope. If there were any incentive, it would be to understate the problem, not exaggerate it. A trend we see in a number of African countries where the official unemployment rates are so low they defy logic and reality. StatsSA is an independent institution that, while not perfect, has a lot of credibility. Its data is scrutinised by economists, international agencies, and the media. Any manipulation or systematic bias would be quickly exposed by these watchdogs. In reality, the agency's credibility depends on its objectivity and adherence to global standards. Does StatsSA Ignore Informal Work? The Evidence Says No A central argument in the current debate is that StatsSA's methodology 'renders millions invisible' by failing to count informal work. This is simply not true. StatsSA's Quarterly Labour Force Survey (QLFS) is designed to capture all forms of work, including informal jobs, self-employment, and unregistered businesses. The QLFS asks about any activity, formal or informal, that brings in income, whether it's selling vetkoek, running a backyard salon, or hustling as a car guard. If you worked for at least an hour in the reference week, you're counted as employed. Both current and former statisticians-general have clarified that informal work is counted, as required by the International Labour Organisation (ILO) standards. Recent Stats SA research confirms that the informal sector employs about 19.5% of the workforce, nearly one in five jobs. This includes street vendors, home-based businesses, and unregistered enterprises, all of which sustain households and fuel local economies. Comparing Apples and Oranges: International Context The arguments supporting Fourie's claims point to countries like India, Brazil, and Zimbabwe, where unemployment rates are low despite massive informality, and suggest South Africa is an outlier. But this comparison ignores key differences: Economic Structure: South Africa's informal sector is smaller than in many developing countries, partly due to regulatory and historical factors. In India, almost any economic activity, no matter how marginal, is counted as employment, even if it's not enough to survive on. Definitions Matter: Some countries use looser criteria for employment, counting sporadic or survivalist activity as work. South Africa's approach is more rigorous, aiming to distinguish between meaningful employment and mere survivalism. Policy Hostility: South Africa's informal sector faces regulatory barriers, policing, and licensing bottlenecks that suppress its growth, unlike in countries where informality is the norm and often the only option. Is the Quarterly Unemployment Report Flawed? StatsSA's quarterly unemployment report is not methodologically flawed. There is also no evidence that it is politically manipulated. The agency publishes detailed methodological notes, welcomes peer review, and its data aligns with other indicators of economic hardship, like sluggish GDP growth, high poverty, and social grant dependency. If millions of informal workers were being missed, we'd see glaring inconsistencies elsewhere, which we do not. The QLFS is transparent about its limitations and is constantly evolving. For instance, the latest data shows that while formal sector employment decreased, informal sector employment actually increased by 17,000 in the first quarter of 2025. This demonstrates that informal work is not only counted but also tracked over time. The Real Issue: Structural Barriers, Not Statistical Tricks The real challenge is not statistical invisibility but structural exclusion. South Africa's informal sector is not as robust as in other developing countries. Regulatory barriers, monopolistic competition, and a lack of support mean that informal work is often precarious and low-paid. The country's economic structure is dominated by large corporations, making it hard for micro-enterprises to thrive. Even where state policy recognises informal activity, it rarely dismantles the barriers that prevent informal traders from scaling up. The shift in informal enterprises toward home-based operations and the stagnation of licensing reveal a sector that is surviving under constant threat, not thriving. Hybrid Measurement: A Welcome Innovation, Not a Silver Bullet Calls to supplement survey data with financial transaction records and digital platform data are valid and should be explored. Capitec's own data on township transactions could offer valuable insights. But these are refinements, not fundamental corrections. The current statistics are not a 'mirage'; they are a sober reflection of a society where too many are locked out of meaningful work, formal or informal. Let's Fix the Economy, Not the Messenger It is true that black South Africans face disproportionately high unemployment rates and that the legacy of apartheid continues to shape economic opportunity. But this is not the result of statistical erasure; it is a reflection of structural realities. StatsSA's data exposes these inequalities; it does not create them. Nco Dube a political economist, businessman, and social commentator. Image: Supplied
