Unemployment crisis in South Africa

Unemployment crisis in South Africa

The Institute for Race Relations has released a report which reveals that low-skilled black-african workers are the most impacted by the employment crisis.

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The Institute for Race Relations (IRR) has released a report highlighting serious labour market problems in South Africa. The think tank found out that fewer than half of working-age people in South Africa are employed, with young, low-skilled black Africans bearing most of the brunt of joblessness. Trade unions called upon the government to take urgent measures to address employment of low-skilled workers.

According to IRR report, despite the significant job growth since 1994, there was also a dramatic increase in unemployment, and most significant job losses were in mining and manufacturing. At the same time, IRR noted, there was a shift towards more skilled jobs. As a result, most impacted by the current unemployment crisis are people with only primary and secondary education.

Statistics SA found that in 2015, a quarter-to-quarter unemployment rate increase was 0.5 percent. South Africa, a country with population of almost 55 million, has a working-age population of 36.1 million. Among those who are working age, 15.8 million are employed, 5.4 million are unemployed and 14.9 million are not economically active. Overall unemployment is 25.5 percent.

Policy reform sought to end the unemployment crisis

To meet the South African unemployment challenge, serious policy reform is needed, according to IRR. Trade unions have already proposed possible solutions.

For example, Anglo American mining company announced the plan to cut 85 000 workers jobs worldwide. In December, the Congress of South African Trade Unions (COSATU)opposed the decision, as Anglo South Africa employs 45 000 workers and South Africa would be hardest hit. The news came shortly after another mining company, the world third largest platinum producer Lonmin announced planned layoff of 6,000 people in response to falling commodity prices and high costs of production.

The union called upon the government of South Africa to find the way to influence the mining corporations, which made high profits in the last few decades and have to be more socially responsible during the ongoing crisis.

The union proposed to cancel the mining licences of companies that do not keep their mines operational. The government should also oblige the mining companies to develop the plans to re-train mineworkers. Further on, the union proposed to develop concrete proposals on how mining companies could be assisted to cut the costs of operations without having to dismiss their workers. South Africa could also consider suspending royalty taxes for those companies to lower costs as Zambia did during its recent copper crisis.

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