Municipal review: Unemployment and the cities

StatsSA released the Quarterly Labour Force Survey (QLFS) results on Tuesday for the first quarter of 2025. The official unemployment rate jumped a full percentage point to 32.9%. The previous quarter’s rate of 31.9% was the lowest in four and a half years, but still more than ten percentage points higher than the 21.5% recorded in the fourth quarter of 2008.

South Africa’s unemployment crisis has been many years in the making. Our unemployment rate is second only to Eswatini, a country whose population rivals Nelson Mandela Bay’s. The unemployment rate for women, Black African and coloured people is yet higher than the average. The youth unemployment rate is staggering. And these numbers are just for the official, narrow rate. The broader unemployment rate is even more frightening.

South Africa’s metros are meant to be drivers of growth and employment. With few exceptions, the narrow unemployment rate in the metros is above 30% and the broad rate is above 37%. The biggest metros - Johannesburg, Ekurhuleni, Tshwane, eThekwini - have the highest unemployment rates.

South Africa’s official unemployment rate, also known as the narrow unemployment rate, has been at or above 32% since the third quarter of 2020. One year before that, before the COVID-19 pandemic, unemployment was 29%.

COVID-19 has done, and is doing, a lot of heavy lifting for poor economic growth and anaemic job creation. In his State of the City Address last week, Johannesburg mayor Dada Morero claimed that ‘Covid-19 alone set us back by 10 years.’ Similar excuses are being made for the failure to create more jobs and lower unemployment to pre-COVID levels.

The struggles with economic growth and job creation go back long before 2020. The number of unemployed and discouraged work-seekers was just under 5.5 million people in 2008. It has since doubled to 11.7 million people:

The graph below shows how South Africa’s structural unemployment has grown over the last 17 years:

The unemployment rate averaged 22% in 2008 and rose to 25% in 2010 due to the aftershocks of the global financial crisis - and stayed at 25% for the next six years. In 2016 it jumped to 27% and then to 29% in 2019. At all times, unemployment for women was above the average and unemployment for men below the average.

Unemployment didn’t even peak in 2020 with a hard lockdown, but in the second half of 2021 when the full effects of the July riots and record levels of loadshedding took effect.

The broader rate of unemployment includes people who have given up looking for a job and it is more than ten percentage points higher than the official rate. The graph below shows how unemployment varies considerably for different population groups:

Black Africans have a broad unemployment rate of 47.5% - almost half are either looking for a job or have given up on finding one. The Coloured unemployment rate is 32.7%, Indian / Asian unemployment is 20.1% and the unemployment rate for Whites is 9.2%. The unemployment rate for all population groups has risen since 2008, but notably less for the latter two groups.

The volatility in the Indian / Asian unemployment rate can be explained by the small size of the group and the outsize effects of the 2021 riots in KwaZulu-Natal.

Youth unemployment is a crisis within a crisis. The broad unemployment rate for people aged 15 to 24 is 72.4%: three out of four people who are probably looking for their first job either can’t find one or have given up on finding a job. For people aged 25 to 34, the broad unemployment rate is 50.1%. This is the broken tableau over which the departments of education and labour preside.

Cape Town’s unemployment rate has always been lower than its peers, and it is only in the last year that a serious challenger has emerged in Nelson Mandela Bay. The metro’s unemployment rate has fallen precipitously since 2020. These two are the only metros with a broad unemployment rate under 30%.

Most of the time, the analysis of local government is based on the job of local government: basic service delivery, financial hygiene, community health and safety. The failures of local government loom so large that it is hard to imagine the benefits of a well-run city.

Job creation should be the natural side effect of a large city that is safe and clean, with good public transport, where young people migrate in search of work. Much, maybe most of the blame for poor growth and high unemployment must lie with national government, but the metros should be doing more.