In the past few weeks leaders in both business and the government have contended that SA’s jobless figures somehow ignore informal employment. That argument is simply not true.
That said, the debates about the statistics are largely a dispute of interest masquerading as a debate about the facts. However, if we are looking for practical solutions to SA’s extraordinarily high joblessness and deep inequalities, framing the discourse around statistical methods is more of a distraction than a help.
Stats SA has always been open about the strengths and limitations of its two employment surveys, both of which conform to international standards. One covers a sample of businesses, the second about 30,000 households every quarter. Only the latter is used to measure unemployment and joblessness.
It is incontrovertible that the household survey includes questions designed to estimate the extent of informal employment, such as hours worked, payment for “odd jobs” and earnings. Since 1994, this kind of survey has found that in SA self-employment, mostly in the informal sector, supports a far lower share of the adult population than in comparable upper middle-income countries.
In SA, 5% of adults are employers or self-employed, compared with nearly 20% in peer economies outside China, where the figure is about 25%. Largely as a result, only 40% of SA adults
are considered employed, compared with 60% in the rest of the world.
These figures reflect SA’s unique history, not poor data. In other countries families could build up businesses over many generations. In SA, the process was cut short by a long history of dispossession. That process destroyed the ecosystem needed for small enterprise. It entrenched extreme inequalities in the ownership of productive assets; access to infrastructure, finance, education and business sites; and family savings, operational experience and business networks.
Two divergent camps have emerged in the recent debates, united only by their attack on the data. One camp holds that the employment statistics must exclude informal work. That premise is simply inaccurate. It seems rooted in sheer denialism about the way apartheid shaped an extraordinarily exclusionary economy.
A second group argues that labelling someone as unemployed disrespects their agency and dignity, suggesting they do not contribute adequately to society. But nothing in the definition of “unemployed” backs that assertion. Ultimately, this approach responds to an international policy debate about whether joblessness is due to economic structures or individual choice.
In SA, where decades of discriminatory systems effectively and intentionally destroyed economic opportunities for the majority, irrespective of their individual qualities, the question answers itself. The mechanisms that created mass unemployment were myriad, ranging from the pass system to land dispossession to underfunding education and infrastructure for black communities to the vagaries of apartheid urban planning to a host of restrictions on black-owned businesses.
The problem is not that data shows the consequences, but that the democratic state has not decisively reversed the underlying systems. Confronted with a distressing data point, we can fight about the methodology or work on policies to deal with the problems it describes.
The debate about the employment data responds to real frustrations about persistence of extraordinarily high joblessness. But groundless attacks on the quality of the evidence won’t help, and risk deflecting attention from real needs.
Standard employment statistics are vital for understanding and addressing our shared realities; denying their findings won’t make those realities go away. Instead of fighting about statistical definitions we need to engage on how to vastly scale up programmes to deal with the challenges they reveal.
• Makgetla is a senior researcher with Trade & Industrial Policy Strategies.
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