Debate sparked on unemployment metrics

DEBATE has been sparked on South Africa's unemployment rate after it was suggested that the figure could be much lower than the publicly recorded rate if the role played by the informal sector of the economy is taken into account.

- THAMI MAGUBANE [e-mail]

Economists weighed in on the issue this week. They said while Statistics South Africa collects quality information to produce statistics on unemployment and GDP, this information could be affected by incorrect data and untruths.

Capitec CEO Gerard Fourie first raised the issue and said there should be a rethink of the country's unemployment metric, contending that when the vast informal sector is taken into account, the headline figure of 32.9% could be closer to 10%.

The government places the rate of unemployment at about 32%, with the expanded definition of unemployment—which includes people who are despondent and no longer looking for work—at around 50%.

Fourie mentioned that Statistics South Africa does not count self-employed people, highlighting that many individuals in the informal economy are selling all kinds of goods and making up to R1000 a day.

Independent economic analyst Professor Bonke Dumisa said South Africa has a strict definition of employment and unemployment.