The latest official labour statistics are as disheartening as before, even if at 33.2% the unemployment rate is marginally lower than it was this time last year.
Second quarter data shows the number of formal sector jobs was essentially flat over the year, with only informal and agricultural employment growing. It’s not a particularly good pointer to the second quarter GDP figures due out on September 9, though no-one expects those to be BOOMING, as US President Donald Trump would say.
But sad as the news continues to be, no-one is suggesting we fire the head of the official statistics agency. Nor did they even in the depths of the state capture years, when all the indicators were showing just how much damage the Zuma administration and the Guptas were doing the economy. Trump’s savaging of the institutions of US democracy has been terrifying in its speed and extent.
It makes SA’s state capture project look almost amateurish. That tended to target the institutions of policing and patronage. It mostly didn’t go after the likes of the Smithsonian museums, or the Bureau for Labour Statistics (BLS), whose commissioner Trump fired last month after she released shock jobs data showing a weakening economy.
For the economic community the attack on the data was one of the most disturbing indicators of the descent into “banana republic” status. “Caracas on the Potomac”, Nobel laureate Paul Krugman called it, referring to the stretch of hyperinflation in which Venezuela’s government simply stopped publishing price statistics. “Goodbye reliable economic data,” was the word from Krugman and other economists.
The concern is not simply that Trump will appoint a lackey, but that the move might deter other staffers from bearing bad news — or be seen to be deterred, so that even if their integrity holds, the data will still be doubted. The BLS is the source of the official US jobs and inflation data, so that’s a big problem — among other things because the Fed relies on these to make interest rate decisions.
SA is a contrast not because its official statistics are perfect — far from it, Capitec’s recent criticism of the official unemployment statistics has served to open up a useful debate about informality and whether the official jobs and GDP statistics measure it as well as they could, rather than raising questions about Stats SA itself, or about the severity of SA’s unemployment problem.
The controversy over the 2022 census data ran a lot deeper, because the census is not just any survey: it is meant to be the definitive count of the population, and the undercount of almost a third compromised the quality of the data. The data quality issues in the social survey side of Stats SA tend to be worse, because they rely on household surveys and response rates are a big problem.
But there have also been questions about key economic data such as the GDP figures, particularly if they rely on volatile and unreliable source data from government departments such as agriculture.
All of that points to the need for a more robust and better resourced agency. Stats SA has been asking for more money for years. In March the Treasury allocated it a bit extra over the next three years, but its budget, at R2.7bn, is still hardly more than it was two years ago, and is increasing slower than overall government spending over the next three years. It has a vacancy rate of more than 20% and is losing people to the private sector. Its infrastructure is ageing, with computers and servers that badly need upgrading or replacing. It should be innovating and becoming more efficient, but lacks the spare people or budget to invest in doing so.
Ironically perhaps, Zuma’s people in the MK party were among those who backhandedly defended Stats SA at its recent budget debate, rejecting the budget because government continued to underfund the agency and “sabotage” its ability to deliver on its mandate. But it’s also from these quarters that calls to add an employment mandate to the Reserve Bank’s price stability mandate come. A lesson from the US is that politicising either one can only hold dangers for the data.
• Joffe is editor-at-large.
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