Employment gains mask deep youth job crisis

You can also listen to this podcast on iono.fm here.

JEREMY MAGGS: Now, you’ll know that South Africa’s official unemployment rate has edged down to 31.4%. That’s the lowest level in more than five years. On the surface, that looks like real progress, but I think the deeper data might tell us a more complex story.

Read: SA unemployment falls to lowest level since 2020

Discouraged job seekers are rising, youth unemployment remains painfully high, and the broader measure of labour under-utilisation still sits around 44%.

So is this a real turning point in the jobs crisis or just statistical relief?

I’m in conversation now with the Statistician-General Risenga Maluleke. SG, a very warm welcome to you. The unemployment rate falling to 31.4%, as I mentioned, but is this genuine job creation or simply people leaving the labour force? What’s the assessment here?

RISENGA MALULEKE: Well, we are seeing two measures that have made this unemployment rate decline. One, an increase in the number of people who are employed and of course, a decrease as well in the number of the unemployed who are actively looking for employment.

So let us look over the past three quarters, maybe all four quarters of 2025. Coming back from 2024, we had recovered some jobs.

But what happened in the first quarter, almost all those jobs that we had recovered were wiped out because the highest we got in 2024 was in quarter three, where we saw growth by 294 000 jobs.

Read:

Indeed, in the first quarter, we lost 291 000 jobs. But after that, we have been recovering. Second, third and fourth quarter have shown and seen recoveries in jobs, which has made us go beyond the 17 million-mark of employed people.

We are currently sitting at 17.1 million people who are employed.

Having said that, the number of people who are unemployed but actively looking for employment, who help us to compute the headline unemployment rate, at some stage we were sitting at 8.4 million, we dropped down to 8.2 million and stayed too long around that space.

We have now dropped to 7.8 million, so below the 8 million-mark. So in terms of that rate, this is the second quarter in a row that we see the rate starting to decline.

But when we look at the absolute numbers, it looks like we are starting to see a drop and of course, our job is to measure, it’s not to speculate. So we are still going to see what is going to happen in the first quarter of 2026.

JEREMY MAGGS: Let me ask you this. Formal sector jobs rising by 320 000. But there’s been a sharp drop in informal jobs. Is this structural improvement or economic strain, do you think, in the informal economy? How do you read that?

RISENGA MALULEKE: Well, usually what we see is the informal sector does fluctuate from time to time. But I don’t want us to read the informal sector alone.

I want us to look at the industries that have lost or shed jobs. Trade shed 98 000 jobs and of course, we lost other jobs in manufacturing, as well as in mining, but particularly in trade. We have seen a lot of jobs being lost from the informal sector.

We know that Gauteng accounts for about 33%, sometimes up to 35% of our share of nominal GDP (gross domestic product).

The city of Joburg does have a big share in terms of our employment and unemployment numbers, depending on which direction it goes.

ADVERTISEMENT:

CONTINUE READING BELOW

So what happened, particularly in the informal sector, is that in the lead up and indeed during the G20 summit, a lot of informal traders who didn’t meet the prescripts of the city of Joburg were removed from the streets.

This has contributed greatly to the informal sector declining by about 293 000 jobs, including what would have happened in other provinces.

JEREMY MAGGS: Let me pick you up on a geographic point if I can. Gauteng losing 54 000 jobs, the Western Cape has gained 93 000. This must be a clear indication, surely, of a provincial economic divergence which is only set to grow.

RISENGA MALULEKE: Certainly, our provinces have a lot of diversity in them. Amongst other issues that you see, say, in the province of the Western Cape, the structure of the Western Cape economy is that you see finance being strong, you see agriculture, and of course, you also see utilities or transport, but not as strong as you would see in finance and agriculture.

Listen/read: Risenga Maluleke’s insights on rising SA unemployment

Whereas in Gauteng, for example, you don’t see much of agriculture. You actually see more of finance, which is the strongest that we see in the province. So that diversity plays a role.

When you look at the gains that we have seen in the Western Cape, as we see agriculture has gained and indeed finance has gained. So they did also contribute what we see in gains of the Western Cape (compared to the) losses of Gauteng.

We have already touched on them in relation to the informal sector in the trade industry.

Now, these numbers are not a way to say we are going to see them go this way. There are times where we have seen the Western Cape lose employment and other provinces gaining employment.

Read:
Stats SA rebuts claims of understated unemployment
Are you employed if you work an hour a week? Stats SA says yes

But just as an addition, one of the things that we see when we talk about the Western Cape, other than the fact that it has been the one that has the lowest headline unemployment rate, as well as what we used to call expanded unemployment rate being low, in this quarter, fourth quarter of 2025, it has fallen below the 20% mark, sitting at 18.1%  headline.

JEREMY MAGGS: Just a final question. Perhaps the most worrying aspect, I think, of the survey is that youth unemployment ticking up to 44%, despite the overall improvement. This recovery, it would suggest, does exclude young people and if that trajectory continues, it becomes even more concerning for the country.

RISENGA MALULEKE: Young people have always been vulnerable to labour markets. So are women, particularly when we go back to young people. It’s even worse when they are female because they become a little more vulnerable than their male counterparts.

But for more than a decade, we have seen the unemployment rate of young people, and I’m talking about 15 to 34 year-olds, being higher than the national average, whereas for those 35 years to 64 it has been far lower than the national average.

Listen/read:
Youth unemployment crisis: 10.3m young people jobless
Rethinking career guidance to tackle SA youth unemployment

Having said that, if we look at the number of young people just 15 to 24 years, regardless of where they are, we have 10.3 million of them. Out of the 10.3 million, 3.5 million are not in employment, education or training, returning a net rate of 34%.

When you move to the 34-year cut, and we are talking about 20 million of those in our population, and of course, we have in excess of 9.8 million young people in that 15 to 34 age group, who are not in employment, education or training. It’s much more difficult when they are female. So indeed, young people are vulnerable to labour markets.

JEREMY MAGGS: Thank you very much indeed. That’s Risenga Maluleke, who is the Statistician-General. I appreciate your time.

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.