Employment in the Construction Sector Continues To Decline
 South African unemployment is a major social, economic and political issue. The high rate of unemployment is one of the basic causes of poverty in the country which is aggravated by the disparity in the uneven distribution of wealth and income. It is accordingly understandable that politicians of all persuasions will give a great deal of attention to attempts to eradicate unemployment with the need to create jobs particularly in the 2011 local government election year.
Unemployment is one of those things that everybody understands but find difficult to define and measure. It is not clear what impact the informal sector or part-time or seasonal workers have on unemployment. Because economists and statisticians find it difficult to define and measure unemployment, estimates of unemployment rates will sometimes differ significantly.
Adcorp, a JSE quoted personnel recruitment enterprise, recently claimed that there were 6.2 million persons employed in the informal sector in South Africa. This was the first occasion that the informal sector was included by Adcorp in its monthly employment index. This finding was immediately repudiated and described as “rubbish” by Pali Lehohla, the statistician-general of Statistics South Africa who claimed that in terms of its Quarterly Labour Force Survey, the informal sector in South Africa only numbered 2.1 million people.
The statistician-general earlier accused Adcorp of “spewing out bile” and promoting the “privatisation” of South Africa`s statistics. Adcorp denied this and responded that it would like to co-operate with Stats SA and steer away from name-calling. They added that its unofficial employment index included unrecorded and even illegal actions, such as the employment of unregistered foreigners, evasion of income, payroll and other taxes and other activity in the underground economy. The company also said that its index would continue reporting its findings about the informal sector in its monthly employment index.
The sharp difference of opinion focuses the need to understand some basic principles. An unemployed person is defined as someone who seeks but cannot find employment. There are, however, those who choose to be unemployed for reasons of age, disability, full-time study or simply a preference for leisure and those who have given up any hope that they will ever find employment. These persons are not classified among the unemployed.
The unemployment rate is determined by expressing the total number of unemployed persons as a percentage of the total number of available workers. It is percentage of the total number of economical active population or labour force consisting of the total number of persons who are willing and able to work and includes self-employed persons, the informal sector as well as all unemployed persons between the ages of 15 and 64 years.
Regardless of the indices used, the South African unemployment statistics are uncomfortably high relative to any comparable economy and there is a need to be concerned. The decline of employment in the South African construction sector represented 6.6% compared with 3.7% and 3.6% in the financial services and wholesale and retail sectors respectively according to the January 2011 index released by Adcorp.
Pieter Rautenbach |
