Bell, Trevor : Unemployment in South Africa

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Thue in a number of other countries the long-term upward trend in the unemployment rate seems to predominate over cyclical factors so that unemployment rates do not come darn during cyclical recoveries. The international comparisons made here cannot, naturally, provide conclusive suppart for the picture drawn by Simkins, Loots and others, despite the striking similarities between the South African and OECD experience as outlined above. They do, however, serve several important purposes: First, they suggest that there is no prima facie reason why Simkins' and Loots' methods of estimation (despite the particularly difficult problems of determining the true, absolute level of unemployment) should, when it comes to indicating cyclical and secular movements, be treated with any more mistrust than the methods used to calculate OECD unemployment' rates, nor any reason why they should not be as readily accepted. Second, they suggest that movements in the unemployment rate in South Africa and abroad have probably to a significant extent been governed by common influences, and (of particular importance for South African policy purposes) that the forces determining movements in the unemployment rate in South Africa to a large extent originate abroad. The existence as well, perhaps, as the causes of the persistent upward trend in Black unemployment rates in South Africa may lie, therefore, in the same factors which have produced the clear, rising trend in unemployment rates in OECD countries, at least since 1974, and which have prevented an absolute decline in unemployment rates during times of cyclical expansion in several of those countries.
The Overall Unemployment Rate Conpared with Registered Unemployment Figure 2 shows the South African unemployment rates for all four racial groups together for 1960-1981 once again, together with the rate of registered unemployment amongst Asians, Coloureds and Whites (that is, the number registered as unemployed as a percentage of their combined economically active population) for the period 1948 to 1983. The figure seems to show a long-term declining rate of registered unemployment amongst Asians, Coloureds and Whites from about 1961 on, but several more detailed features of the graph should be noted: The rate of registered unemployment reaches its lowest post-war level in 1974 after a long, thirteen year falling trend. Thereafter it rises to a level in 1978 which is higher than at any time since 1962, falls during the 1978-81 boom, but to a level still significantly higher in 1981 than it was in 1974, and then rises in 1983 to a level slightly in excess of that in the trough of the last recession in 1978. After a long decline in the registered unemployment rate from 1961 to 1974, therefore, it appears that for nearly a decade now an upward trend in this unemployment rate may well have been in operation. Despite the divergence of the aggregate and non-Black unemployment rate graphs in Figure 2 during the years 1978 to 1981, the problem of rising unemployment in South Africa today is perhaps not as exclusively "a Black picture" as it at one time seemed. The evidence suggests that the reasons for the observed upward trend in the South African unemployment rate lie not in some basic flaw in methods of estimation, but in some real and fundamental change in the South African economy. The movements over time in both the overall and non-Black unemployment rates, it will be suggested below, are readily understood in much the same terms, and even their conapicious divergence from 1978 to 1981, shown in Figure 2, does not cast any serious doubt on the macrc-estimates discussed above. So far as the earlier relative movements of the two graphs in Figure 2 are concerned, it is also very striking that from 1970 right through to 1978 movements in the Black and non-Black unemployment rates (albeit very differently measured) are more or less perfectly synchronized. In view of these facts, together with the similarly close parallel between the two graphs in Figure 1 from 1970 to
Page 2 and 3: INSllIUTt TOR SOCIAL AND ECONOMIC R
Page 4 and 5: i CONTENTS Page - u.t of Tabla0 and
Page 6 and 7: Preface This paper is an extension
Page 8 and 9: Applications by whltea for Employme
Page 10 and 11: Simkins. His work is noteworthy par
Page 12 and 13: There is not, to my knowledge, anot
Page 14 and 15: The evidence thus suggests a persis
Page 16 and 17: ~i~~~~ 1: UNEMPLOYMENT PATES: UNITE
Page 18 and 19: Table 5: Unemployment Rates in Scnn
Page 22: Table 6 Registered Unemployment Rat
Page 25 and 26: Table 7 Non-Agricultural Employment
Page 28 and 29: In the case of Blacks, employment g
Page 30 and 31: governwant intervention in foreign
Page 32 and 33: Real Intwraat Rats and Rats of Incr
Page 34 and 35: Table 9 Real Interest Rates and Ave
Page 36 and 37: grawth in general rather than to an
Page 38 and 39: hetbr th. unemployment in voluntary
Page 40 and 41: it is argued that for a small open
Page 42 and 43: imzlO.ion of this form of voluntary
Page 44 and 45: significance1). However, the findin
Page 46 and 47: Thus where the unemployment rate sh
Page 48 and 49: have expected a substantial increas
Page 50 and 51: vii) Finally, amongst the causes of
Page 52 and 53: traditionally been considerably hig
Page 54 and 55: already become much more difficult
Page 56 and 57: unemployment is deregulated markets
Page 58 and 59: 'thirties and even the postvar peri
Page 60: might, JB (1982) "The Nature of Une

Bell, Trevor : Unemployment in South Africa

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