The latest Spatial Tax Board data tells a lot about formal employment in South Africa

The latest Spatial Tax Board data tells a lot about formal employment in South Africa

Unemployment in South Africa is a sinister problem in every sense, including its abuse and misrepresentation for political point-scoring purposes. In this hazy, noisy discourse, current data and adequate analysis of employment in South Australia are very scarce and therefore most welcome as they appear.

A strong source of longitudinal data is the recently (June 2023) spatial tax panel data set made available by the National Treasury and Human Sciences Research Council. What makes this dataset so powerful is that it comes from the South African Revenue Service (Sars) where it is rigorously verified by law: it covers the entire formal economy rather than just a sample of it, and it includes spatial variables at provincial and municipal levels, giving it Useful degree of detail.

According to this data, South Australia’s formal economy accounted for 10.4 million full-time jobs (FTE) registered with Sars in 2021/22. Obviously, this figure is very low in a country of 60 million people.

The formal economy is important for job growth and should be pursued along with support for the informal economy. It’s not a matter of one party or the other – it’s a matter of synonymy. Indeed, an important objective of supporting the informal economy is to facilitate progression into the formal economy where jobs are more stable and well-paid.

Spatial tax plate data helps us understand what we can learn about official employment Patterns in our provinces and metros. Where are the official jobs located? Where were these posts added and where were they roofed? What happened to jobs over time? What is the effect of covid?

The dataset compiles official employment figures from 2014 to 2022 based on multiple dimensions. However, this article focuses on fluctuations in formal recruitment from 2019/20 to 2021/22 in our provinces and central stations.

A comparative analysis of these fluctuations is illuminating and will be useful to provincial and metro governments, as well as regional legislatures and metro councils.

County analysis

Table 1 below shows the amount of formal jobs that exist in each province. Overall, the formal economy has lost more than 270,000 jobs over the years under study.

The Northwest (NW) and Northern Cape (NC) were the star performers as they increased the number of jobs, albeit from lower bases.

Gauteng and the Western Cape, the two largest regional economies, lost the most jobs over this period – together they lost nearly 200,000 jobs over the three years.

table 1,

In Table 2 below, we get a clearer picture of employment growth rates in the governorates by looking at the percentage increases and decreases in recent years.

The second year of Ramaphosa’s presidency, 2019/20, was a bumper year of job growth. However, this was largely reflected in 2020/21, the first covid Terrible year.

Here we see the clear impact of the pandemic in 2020/21 when over 200,000 jobs were lost that year and another 70,000 were laid off in 2021/22.

Based on the growth trajectory (+2.5% growth in 2019/20), the full impact of Covid has been in the area of ‚Äč‚Äčaround 800,000 full-time jobs that were either lost or not achieved in 2020/21 and 2021/22.

Naidoo-slow-Table-2, official recruitment

metro analysis

Metros are the engine rooms of the formal economy and accounted for 6.7 million or 65% of formal jobs in South Australia in 2022.

Table 3 below shows the number of full-time positions over the three years on each of the central trains. This table tells the unfortunate story of consolidated job losses in our cities, with more than 275,000 jobs lost between 2019/20 and 2021/22.

And so our cities have been sites of continuous job destruction in recent years.

The worst performers were Joburg (JHB), Cape Town (CPT) and Ekurhuleni (EKU), followed by Tshwane (TSH), which together cut around 240,000 jobs.

Naidoo-slow-Table-3, official recruitment

Table 4 below presents a picture of job growth and declines in central regions in percentage terms.

All metros grew jobs in 2019/20 (the year before Covid) but laid off jobs in both years thereafter. Over the three years, metro jobs fell 4%, which was far worse than the 2.5% decline for the formal South African economy as a whole.

It was the metros that bore the brunt of the Covid hit on jobs.

Naidoo-slow-Table-4, official recruitment

The spatial analyzes above paint a mixed picture of what happened to formal employment in the recent past. However, as we look ahead, there are important positive conclusions that can be drawn from these analyses.

First, the overall positive growth rates in 2019/20 prove that it is indeed possible to achieve employment growth of 2.5% per annum in the formal economy. It also provides strong evidence that the Ramaphosa presidency has been effective in ramping up formal job growth in the pre-Covid years. If the pandemic had not disrupted this path, formal employment could have reached 11.2 million full-time jobs in 2022.

Secondly, there was a slowdown in job losses in 2021/202 as the impact of Covid waned, and this shows that the formal economy is resilient and still has the potential to create jobs. For this reason, job growth in 2022/23 is likely to return to positive territory. The challenge is to create the conditions for these trends to continue.

Third, and most important, it shows how the growth of formal employment is a long-term endeavor based on stable growth annually in the central and provincial regions of South Africa. This, in turn, depends to a large extent on the political will of our governments in those metropolitan areas, municipalities and provinces. DM

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