The South African Reserve Bank has published its latest Monetary Policy Review, showing how South Africa’s unemployment rate and wage growth compares to the previous decade.
The central bank noted that job growth stalled in 2019, with the total number of employed people declining from 16.44 million at the end of 2018, to 16.34 million at the end of 2019 – using seasonally adjusted data.
Meanwhile, the labour force continued to expand, with a net increase of 481,000 people during 2019, it said.
This means that over the past decade as a whole, the total workforce has increased by 4.87 million people, compared with an employment increase of 2.52 million.
The SARB also noted that wage growth has also slowed markedly, in stark contrast to a decade ago, when pay boomed even as the economy shed jobs.
“Formal sector wages, as measured by the Quarterly Employment Statistics (QES) survey, declined by 0.7% in the first three quarters of 2019, extending a downward trend in wage growth which began around 2015,” it said.
“Bonus and overtime pay appears to have slowed more than base pay, although the available data only starts in 2018, so it is difficult to establish a trend.”
The SARB noted that there is also some evidence of slowing growth in public sector wages in 2019, after an extended period of growth above private sector rates.
The central bank said that public wages have outpaced private wages over both the 2000-date and the 2010-date periods.
With -0.8% growth in Q3 2019, South Africa entered into a technical recession, for the second time in two years.
It also confirmed that the 2010s was the worst decade for South African growth on record, the SARB said.
Total output expanded by only 15.9% between the first quarter of 2010 and the final quarter of 2019, which compares unfavourably with the crisis-ridden 1980s and 1990s, during which GDP grew by a total of 18.9% and 16.7% respectively.
“Growth has been unusually volatile in recent years. As noted in previous issues of the MPR, the primary and secondary sectors have moved abruptly in response to shocks,” it said.
“This pattern persisted in 2019, where mining, manufacturing and agriculture all contracted (by 1.9%, 0.8% and 6.9%, deducting 0.1, 0.1 and 0.2 percentage points from 2019 growth respectively).”
Meanwhile, the rest of the economy posted positive but low growth rates, it said. This ‘core’ growth was 0.9% over the year, close to its five-year average rate of 1.1%.