One million South Africans applied for only 5,000 jobs

Over a million South Africans applied for 5,000 jobs advertised by the South African Police Service (SAPS), indicating that the country’s unemployment crisis could be even worse than many think. 

This example also contradicts the argument that South Africa’s unemployment rate is far lower than what is officially reported by Stats SA, as some prominent CEOs have claimed. 

Stats SA’s data already includes employment in the informal sector under a globally accepted definition, with much of the extra income generated outside of the formal economy not falling under this category. 

Much of this work occurs due to South Africa’s high unemployment rate, which pushes many into forms of “survivalist economics” to make ends meet by picking up temporary work, renting out backrooms, or trading goods. 

This is not generally accepted as employment by most definitions and is rightly excluded from Stats SA’s data, political analyst Dr Frans Cronje told the second annual BizNews Investment Conference. 

There has been widespread debate regarding South Africa’s unemployment rate after comments from former Capitec CEO Gerrie Fourie earlier this year. 

Fourie said South Africa’s unemployment rate would be closer to 10% if self-employed people and those working in the informal economy were counted. 

“The data is completely accurate and is quite precise. But, it is also correct to say that with such an extreme level of unemployment, there will be a lot of survivalist economic activity,” Cronje said. 

“People will rent a thing or sell a thing. They will hustle or trade something to just survive. But, we must not fall into the trap of calling that employment.” 

While this is economic activity and generates meaningful value for individuals and society, it is not employment in the common sense.

“There are people who manage to put some rands through their account every month. They must not qualify as though they are employed, and there is something wrong with the country’s macro-level data,” Cronje said. 

Cronje pointed to the example of the police receiving over one million applications in response to the advertisement of 5,000 jobs. Around 300,000 of those applications were from university graduates. 

“Look, no one can say our unemployment rate is 5% or 10% because when you advertise police jobs in the United States, you do not get 12 million people applying,” Cronje said. 

Unemployment crisis worse than it seems

South Africa’s unemployment crisis is worse than it seems, with over 600,000 individuals entering the workforce every year. 

The country’s stagnant economy simply cannot absorb this number of new entrants to the labour market, with the unemployment rate growing year-on-year as young adults cannot enter the workforce. 

This results in millions of South Africans not participating in the formal economy and having no stake in the success of local businesses or wealth generation. 

What makes this number of individuals entering the workforce even more concerning is that even when South Africa’s economy was growing strongly, it did not create jobs at a fast enough rate to absorb such a number of individuals. 

“We have gone back to where we were in 1994 in terms of growth, with a population growing at 1.4% which is relatively high by global standards,” Stanlib chief economist Kevin Lings said. 

“We have 600,000 people entering the labour force every year who have to be accommodated with employment and opportunities.”

“If we do not accommodate these people, it translates directly into unemployment, particularly youth unemployment.”

At the peak of South Africa’s economic growth in the mid-2000s, when output grew by over 4% a year, the economy added around 500,000 jobs a year. 

Even if South Africa managed this faster growth, the unemployment rate would still increase year-on-year, just at a slower rate. 

“When your economy grows at less than 1%, that is what has fundamentally gone wrong. You cannot absorb new workers and cannot offer the population an opportunity,” Lings said. 

“It is not possible. A business does not employ people for the hell of it. They need to have a thriving and growing business to employ more people.”

“If you do not have economic growth and expansion, you stagnate. That is where South Africa is currently.”