Most unemployed South Africans did not lose their job

South Africa’s ranks of unemployed individuals are largely people who are new entrants to the labour market and those who have not had a job in the past five years. 

Individuals who have lost their jobs only make up 24.5% of South Africa’s total unemployed, with job leavers accounting for 3.1%. 

This suggests that the economy’s inability to absorb new entrants into the labour market is the main driver of unemployment. 

The Reserve Bank detailed this dynamic in its latest Quarterly Bulletin, which analysed the most recent Quarterly Labour Force Survey from Stats SA. 

Total employment increased in the latest survey by 248,000 or 1.5%, with job growth recorded in all three main sectors. 

Formal sector employment increased by 515,000 (4.5%), while informal sector employment rose sharply by 635,000 (19.1%), largely due to the inclusion of 920,000 persons employed in the agriculture industry within these sectors as of the third quarter of 2025. 

When excluding agricultural employment, formal sector employment declined by 0.5% in the third quarter of 2025, while informal sector employment increased by 8.7%.

Overall, this resulted in the unemployment rate declining to 31.9%, indicating that some progress is being made in tackling the country’s crisis. 

However, on a deeper reading of the statistics, the crisis appears to be significantly deeper than detailed by the headline unemployment rate. 

In the third quarter of 2025, a large share of officially unemployed persons were new entrants to the labour market, the Reserve Bank said. This group makes up 43.4% of all unemployed individuals in the country. 

This is followed by those who last worked in a job five years ago at 25.6% and job losers at 24.5%. 

As a result, the largest share of the unemployed in South Africa is those who are yet to hold a job ,as the country’s stagnant economy cannot absorb new entrants to the labour market. 

Equally as concerning is the rising share of long-term unemployment, which refers to those who are unemployed for one year or longer. 

As a share of total unemployment, the long-term unemployed rose to 77% in the third quarter of 2025. This means that over three-quarters of the country’s unemployed have not held a job for the past year. 

Worse than ever

South Africa’s unemployment crisis is largely a function of its stagnant economy, with it simply not growing fast enough to create the number of jobs needed to absorb new entrants into the workforce. 

As a result, South Africa’s unemployment rate steadily rises year-on-year, driven by new entrants in the labour market. 

South Africa’s economic growth rate would have to more than triple for the economy to merely absorb the number of new entrants into the economy every year. Even faster growth is needed to make inroads into reducing the unemployment rate. 

This is feedback from Stanlib chief economist Kevin Lings, who explained that South Africa’s economy is growing faster than expected, but not fast enough.

With lacklustre economic growth, South Africa’s economy has not been able to absorb the rapid growth in its workforce, which should have created a demographic dividend for the country. 

Instead, it has created a disaster, with the country’s workforce growing by around 600,000 people a year, while its economy can only absorb 100,000.

Lings explained that the sustainable growth rate for the moment sits somewhere between 1% and 1.5%, with it being limited by deteriorating infrastructure and weak business confidence. 

“Clearly, we have got a lot of work to do to move it beyond that, which is very much achievable. For the moment, we are stuck in a range of 1% to 1.5%,” he said. 

Stanlib has revised its growth estimate for 2025 upwards to 1.3% for the year from 1% earlier in 2025, due to a lower-than-expected impact from US tariffs and improving local fundamentals.

“I think a 1.3% growth rate is still nowhere near enough. We need to really get that growth rate above 3% and heading toward 4%,” Lings said. 

“Then, I think, we will be in a position to be adding enough jobs to absorb the number of people entering the labour market.”

“At a growth rate of just over 1%, we are not going to create enough jobs to deal with the growth in the population.”

Lings compared the longer-term trend of the country’s economic growth rate versus population growth to make this point clearly. 

Since the beginning of the Covid-19 pandemic, the economy has grown, expanding by 3.5% in real terms over the past six years. 

However, over that time, the population has grown by more than 6%. This signals that economic growth is not keeping pace with population growth. 

Coronation’s economics unit broke down the disastrous growth in South Africa’s unemployment by highlighting three key trends over the period from 1994 to 2025 –

• The number of unemployed people has risen from 3.7 million to 12.6 million, while the population has grown from 40.6 million to 64.1 million.
• The number of working-age people has increased from 20.6 million in 2008 to 29.4 million, while total employment (both formal and informal) has grown by just 2.2 million.
• The burden of unemployment has risen from 13.5% of the adult population to 20%.

What is most worrying for one of the country’s top asset managers is that long-term unemployment has steadily worsened as well. 

The share of South Africans out of work for more than a year has risen from 63.9% in 2015 to 77% as of the third quarter of 2025.