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South Africa – Temporary job numbers improve

13 January 2014

The number of jobs in South Africa’s temporary and informal sectors rose toward the end of 2013, according to the latest Adcorp Employment Index. Significant job gains were observed in construction and transport, which grew by +7.4% and +6.5% respectively. In contrast, the financial sector shed 13,000 jobs and the mining sector scaled down by 1,000 jobs.   

Loane Sharp, Labour Market Economist for Adcorp, commented: “The biggest gains occurred in the informal sector, which created 12,722 jobs during the two-month period, and the temporary work sector, which created 5,922 jobs. For the first time in 16 months, permanent work grew as well, adding 5,271 jobs during the month. Since January 2013, the informal sector has generated 73,799 jobs, compared to a total decline of 241,536 permanent and temporary jobs, reflecting the growing importance of the informal sector in the South Africa labour market.”

“Since the global financial crisis in 2008, approximately 359,000 high-skilled South Africans have returned from foreign work assignments,” Mr Sharp said.

South Africa’s demand for high-skilled workers has remained relatively stable over the past decade.  Due to a consistent shortage of high-skilled workers there are around 829,000 unfilled vacancies, i.e. positions that could be easily or immediately filled if only the requisite skills were available. In other words, the high-skilled segment of the South African labour market is persistently in a state of excess demand.

The unemployment rate for high-skilled workers has remained roughly constant at around 0.4% (compared to an unemployment rate of 37% for the workforce as a whole). At the same time, the supply of high-skilled foreign workers has been negligible due to strict immigration measures adopted by the Department of Home Affairs in 2002, which were further tightened in 2008 and 2010.

Since the onset of the global financial crisis in 2008, the wages of high-skilled South Africans have declined by -23% in real terms.. This decline is consistent with an increased supply of 359,000 additional workers, namely South Africans returning from work assignments abroad. This is a sizeable number, representing 18% of the total pool of managers and professionals in South Africa and 12% of the total pool of graduates.

Mr Sharp concluded: “These estimates suggest several things, namely that South Africa’s skills shortage is substantial and is not being met by the local supply of high-skilled workers. Therefore the restrictions on foreigners living and working in South Africa should be relaxed, since this would supplement the dwindling local supply of skills.”

“These stats also suggest that the living standards in South Africa have remained relatively high during the global financial crisis, certainly compared to other English-speaking countries where emigrant South Africans have taken up residence; and that South Africans who emigrated to other countries prior to the 2008 financial crisis were possibly over-confident about the security of their jobs in foreign countries.”

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