Bell, Trevor : Unemployment in South Africa

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Thus where the unemployment rate shows a clear long-term upward trend we should, rather than dwell on the essentially metaphysical question of whether the increased unemployment is voluntary or involuntary, look at the secular dynamics of unemployment and poverty. That is, we must attempt to come to grips with the processes at work over time, which are tending to produce the trend. Analysis of the labour market which runs mainly in terms of static supply and demand curves, as much discussion of unemployment does, can throw little light on the nature of these processes or of the measures needed to alleviate the problem. vi) In the preceding four paragraphs we have in effect been considering how, in the light of our earlier explanation of slower growth rates in the South African economy, we should interpret a rising trend in some particular measure of the unemployment rate, where part of the increase may be voluntary in the sense defined. Let us now consider the same general problem for the case in which part of the observed increase partly reflects an increase in underemployment rather than open unemployment. Is it appropriate to use a composite index of unemployment which includes both open and partial unemployment, or does this procedure, as some have suggested, artificially turn what really is a problem of poyerty into one of high and growing unemployment. Let us deal with this by taking a few specific examples: (a) Consider the middle-aged British skilled worker made redundant and forced to take an unskilled job at a lwer rate of pay. We can if we choose then say that we no longer have a problem of unemployment but one of poverty. Thua we can regard the worker as being as fully employed as he was originally before the recession began. And this does little violence to the facts if one is thinking of a developed country like Britain where unskilled wage rates are say 25% less than skilled. It remains true that the problem arose from a fall in the dunand for labour, and in that sense it is basically a problem of employment, but we may without too much bother accept the new classical view of the matter in this case.
(bl What though of a Black who loses his job in a textiles factory in Durban due to greater ccmpetition from the Far East, and leaves for "the farm" in Hapumulo. Say he "works" six hours per reek for R5,00 there and so is regarded as fully employed in term of the criteria used by the Current Population Survey. In the aggregate therefore the rate of unemployment is unchanged. Is this reasonable? There has in fact been a drastic reduction in the utilization of this worker's labour services. Thus, it seems to me, to say that the unemployment rate is unchanged is to fail to capture the essence of what has happened. The unemployment index would fail ccmpletely to reflect the fact that the situation so far as the availability of work was concerned had clearly deteriorated. A measure of unemployment incorporating underemployment, however, would reflect thisl). These two meaaures thus could produce quite different time trends, and the choice of definition becomes critical for any analysis of the cyclical or secular dynamics of the problem of unemployment. Indeed, it is noteworthy that the CPS shows a significant drop in the Black unemployment rate between Wtober 1977 and June 1978 from 12.5 to 10.1 per cent, against all the other indicators. For instance, over this same period according to Simkins, the all-races unemployment rate (with Black unemployment predominant) rose from 18.4 per cent to 20,4 per cent, and according to mots the Black unemployment rate rose from 16,2 to 18.4 per cent. hlrthermore, the rate of registered unemployment of Whites, Coloureds and Asiana, as illustrated in Figure 2 also rose significantly, and there is no apparent reason why the Black unemployment rate should have been moving in the oppoaite direction. Also, this decline in the Black unemployment rate conflicts with the picture presented in Table 7 and Figure 3 above, which show rates of growth of non-agricultural employment of -1,29 and -2,26 in 1977 and 1978 respectively, in view of which we should 1) The same considerations would apply even if the individual worked the same hours as he did in tom, but for, say, one twentieth of the return.
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 20 and 21: Thue in a number of other countries
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 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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