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Informal job sector on a growth buzz

By Staff Writer
Nicolette Dirk, finance writer, justmoney.co.za
 
Employment figures rose by 23 861 jobs over November and December with the gains seen mainly in the informal sector.
 
This is according to the latest Adcorp Employment Index for January.
Adcorp’s labour market economist, Loane Sharp, said informal sector saw the creation of 12 722 jobs during the two-month period while the temporary work sector created 5 922 jobs.
 
“For the first time in 16 months, permanent work grew as well, adding 5 271 jobs during the month. Since January 2013, the informal sector has generated 73 799 jobs, compared to a total decline of 241 536 permanent and temporary jobs, reflecting the growing importance of the informal sector in the South Africa labour market,” said Sharp.
 
Gains and losses
 
Adcorp stats showed significant job gains in construction and transport, which grew by 7.4% and 6.5% respectively. In contrast, the financial sector shed 13 000 jobs and the mining sector scaled down by 1 000 jobs.
 
The mining industry is currently in focus because the Association of Mineworkers and Construction Union’s (AMCU) members are on strike today. According to reports the union agreed to postpone the gold mine strike until a Labour Court ruling next week.
 
The January index also examines the effect of immigration and emigration on the South African employment environment.
Sharp said Adcorp was able to estimate the net number of high-skilled immigrants returning to the country using wage data for high-skilled workers.
 
Stats showed that the South African economy’s demand for high-skilled workers has remained relatively stable over the past decade.  This down to a consistent shortage of high-skilled workers of around 829,000 unfilled vacancies.
 
Where is unemployment still the highest?
 
Adcorp stats showed that the unemployment rate for high-skilled workers has remained roughly constant at around 0.4% (compared to an unemployment rate of 37% for the workforce as a whole). At the same time, the supply of high-skilled foreign workers has been negligible due to strict immigration measures adopted by the Department of Home Affairs in 2002, which were further tightened in 2008 and 2010.
 
This indicates that the average real wages of high-skilled workers have increased from R265, 680 per annum in 1997 to R423, 730 per annum in 2013. Wages have also increased from R112, 966 per annum in 1997 to R423, 730 per annum in 2013 – an increase of 11.2% per annum.
 
“What is notable about this is that there was a relatively uninterrupted period of expansion of high-skilled workers’ wages from 1997 to around 2008. Since the onset of the global financial crisis in 2008, wages of high-skilled South Africans have declined by 23% in after-inflation terms,” said Sharp.
 
He added that this decline is consistent with an increased supply of 359 000 additional South African workers returning from work assignments abroad. It represents 18% of the total pool of managers and professionals in South Africa and 12% of the total pool of graduates.
 
“These estimates suggest that South Africa’s skills shortage is substantial and is not being met by the local supply of high-skilled workers. The restrictions on foreigners living and working in South Africa should be relaxed, since this would supplement the dwindling local supply of skills,” said Sharp.

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