South Africa faces significant inequality, which is often evident in its geography. Recent research revealed that employment in South Africa varies according to different regions.
Unemployment and inequality
In the first quarter of 2024, Statistics South Africa (Stats SA) revealed that the official unemployment rate in the country increased from 32.1% in the last quarter of 2023 to 32.9% in the first quarter of 2024.
Employment in South Africa is not the only area of inequality in the country. Additionally, income inequality in South Africa is also high, with some statistics asserting that it has remained among the highest documented globally.
Economic data shows these inequalities in different areas, pointing out the differences between regions. This is evident in the differences in income, job availability, education access, and health outcomes.
Labour absorption rate
A recent study by the Human Sciences Research Council (HSRC) revealed that unemployment and labour absorption vary across different regions, similar to how inequality is distributed.
Labour absorption rate, i.e. employment, refers to the population ratio versus the proportion of employed working-age people. Essentially, labour absorption reflects the ability of an economy to create employment.
The researchers, Dr Gina Weir-Smith and Dr Simangele Dlamini analysed labour absorption rates between 1996 and 2020 and found that some regions have significantly higher absorption rates than others. For example, in the Western Cape the rate is much higher than in the Eastern Cape.
Regional spill over
Interestingly, the research also uncovered the phenomenon known as regional spillover, where economic activity in one area boosts employment and the economy in neighbouring areas.
Areas with higher employment rates are areas that are more urbanised and areas with higher functional literacy rates. Directly linked to the literacy rates are areas with better educational facilities and outcomes, such as metropolitan regions.
How does migration across regions affect employment?
It is important to note that while urban areas generally have higher labour absorption rates, increased migration into urban areas puts pressure on infrastructure, resulting in a shortage of formal housing, lower productivity levels, and increased competition for jobs. Consequently, urban areas with high population densities and many rural migrants often experience lower labour absorption rates.
The research showed that regions and provinces with negative net migration generally had lower labour absorption rates. Negative net migration refers to the occurrence of more people leaving a region than people entering the same region. For example, according to Stats SA, the Eastern Cape and KwaZulu-Natal were two provinces with consistently low labour absorption rates and also negative net migration rates.
Will these inequalities ever be ironed out?
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