South Africa's unemployment rate increased marginally to 25,3% in the second quarter, compared with the 25,2% recorded in the first quarter of the year, official data showed on Tuesday.

This was 1,7 percentage points higher than the unemployment rate of 23,6% in the second quarter of 2009.

Statistics South Africa (Stats SA), which released its 'Quarterly Labour Force Survey' on Tuesday, indicated that unemployment remained virtually unchanged at 4,31-million.

However, the rate of job losses in South Africa is slowing, Stats SA reported, with 61 000 jobs lost in the second quarter of the year, compared with 171 000 jobs lost during the first quarter of the year.

Stats SA highlighted that the 0,5% contraction in employment between the first and second quarters was an improvement on the 1,6% contraction in employment recorded between the fourth quarter of last year and the first quarter of this year.

This was also an improvement on the 2% contraction in employment recorded between the first and second quarters of 2009.

However, labour federation the Congress of South African Trade Unions (Cosatu) called the latest statistics a "national catastrophe", noting that this brought the total number of people who have lost their jobs since the beginning of last year to 1,1-million.

"On average every worker supports five dependents, which means that over 5,5-million additional people have been plunged into a life of poverty and misery in just 18 months. The fact that the rate of job losses in South Africa is slowing down will be no comfort to those 5,5-million [people] who are now condemned to a life of destitution," Cosatu stated.

It added that it was now more determined than ever to campaign for further significant interest rate cuts to provide relief for employers struggling to avoid retrenching workers, as well as as an incentive for those employers who want to create new jobs.

"In the longer term, however, it [has become] ever clearer that if we are serious about reversing the trend and creating jobs on the scale we need, we have to move rapidly onto a new economic growth path that shifts our economy from one based on the export of raw materials and capital-intensive sectors to one that is labour-intensive, based on [the] manufacturing industry," it said.

Meanwhile, the United Association of South Africa (UASA) said that government could no longer sit by and let this situation continue.

"We deem the latest numbers as more proof of the structural rigidities in the South African economy which cannot not be rectified by smooth fiscal policies and lower interest rates. Our economic policies are in total need of an adjustment in order to make the economy, especially the labour and price markets, more responsive to policy changes," UASA stated.

It added that it was clear that higher economic growth did not translate into more jobs, highlighting that while the official unemployment rate stood at 25,3%, the expanded unemployment rate, which included those individuals who were not economically active and those who were discouraged from seeking work, stood at 32,8%.

“The broad unemployment rate of 32,8% means that one out of three South Africans who would like to work, cannot find work. In addition, the drop in employment in particularly the formal manufacturing and construction sectors is extremely worrying because these sectors are critically important for South Africa’s economic recovery,” Solidarity spokesperson Jaco Kleynhans added.

During the second quarter of the year, South Africa’s population of working age increased by 0,2% or 49 000 people, while the overall labour force declined by 59 000 people or 0,3%.

Formal sector employment had contracted by 1,4% or 129 000 jobs between the first and second quarters of the year, driven by the manufacturing sector, where employment contracted by 53 000 jobs, the transport sector, where 33 000 jobs were shed, the agriculture sector, where employment contracted by 32 000 jobs and the construction sector, where 15 000 jobs were cut.

On a year-on-year basis, the biggest employment falls had been recorded in the manufacturing sector, with 217 000 job losses, the trade sector, with 123 000 jobs lost and the construction sector, which lost 111 000 jobs.

However, informal sector employment increased by 5,7% or 115 000 jobs during the first and second quarters of the year, driven by job gains in the trade, construction and manufacturing sectors.

Further, Stats SA pointed out that the biggest job losses between the first and second quarters of the year had been recorded in the Northern Cape, the Western Cape and KwaZulu-Natal.

The Limpopo province had, however, created 44 000 more jobs, mainly in the mining and agricultural sectors, while Mpumalanga province also created 15 000 more jobs.

In Limpopo province, unemployment levels had dropped by 16,2% between the first and second quarters, while the unemployment levels in the Eastern Cape declined by 9,7% between the two quarters.

KwaZulu-Natal’s unemployment levels, however, increased by 7,2%, while the Western Cape had recorded a 6,7% increase and the North West province a 9,4% increase in unemployment levels between the two quarters.

The Northern Cape, which also recorded a 7,8% quarter-on-quarter increase in the unemployment rate, had one of the highest unemployment rate in the second quarter of the year, standing at 30,1%.

Mpumalanga and North West provinces each had an unemployment rate of 28,1%, the second-highest level.

Stats SA highlighted that unemployment among the youth, those aged between 15 and 24, had increased the most out of all age groups. Unemployment among the youth increased by 1,3 percentage points quarter-on-quarter and by 2,3 percentage points on a year-on-year basis.

Further, the number of discouraged work seekers increased by 3,7% or 68 000 people between the first and second quarters of the year.

On a year-on-year basis, the number of discouraged work seekers increased by 25,7% or 390 000, 82 000 of whom live in Gauteng.

Originally published by Polity.org.za