Bell, Trevor : Unemployment in South Africa

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Preface This paper is an extension of work undertaken by the present writer in 1983 on "The Growth and Structure of Manufacturing Employment in Natal". That study revealed inter alia a declining rate of growth of manufacturing employment in the country as a whole and in particular in the major industrial areas, including the Durban-Pinetown region. It was therefore decided to focus directly on the problem of unemployment, initially dealing with the question of scale and definition, causes, certain other conceptual issues, and remedies, in relation to the country as a whole, with a view to using it as a background to subsequent analysis focussing more particularly on the problem of unemployment in the Natal region. The present study deals with the problem at the national level, and it is hoped that a further analysis dealing with Natal will be undertaken at the Institute in due course. I am grateful to Mahaviehnu Padayachee for his assistance in extracting statistical data and in conducting a bibliographical search, and for his friendly interest in the work. A preliminary report on some aspects of the project, entitled "Unemployment in South Africa: Trends, Causes and Cures", was presented as a joint paper by myself and Vishnu Padayachee at the Conference of the "Second Carnegie Inquiry into Poverty and Development in Southern Africa" held in Cape Town from 13 to 19 April, 1984. A special word of thanks is due to Charles Simkins of the School of Economics, University of Cape Town for a number of conversations which helped me to clarify certain aspects of the calculation of unemployment rates in South Africa, and for providing me very recently with revised, unpublished unemployment estimates. Naturally, neither he nor anyone else is responsible for any remaining empirical or theoretical errors. I owe a great debt in this, as in my earlier work, during the past eighteen months, to Professor John Butler-Adam who has made my stay in the Institute a most enjoyable and stimulating experience.
The problem of unemployment became a subject of heated discussion amongst economists in South Africa in the mid-19708, for the first time since the Second World War. It remains a highly controversial matter which has by now generated a quite substantial body of literature. In view of the rather unsettled nature of the discussion, there seems to be a great need for further attempts to clarify the nature of the issues, and thereby, if poesible, to throw new light on the problem. The aim of this study is to consider the main theoretical and empirical issues in the debate on the nature and extent of unemployment in South Africa. The analysis includes such questions as (1) whether there is a tendency for the unemployment rate in South Africa to rise, and, if so, whether this is a cyclical or secular problem, (2) the causes of the observed trends in unemployment rates, including the question of whether the unemployment is voluntary or involuntary; (3) the scope for governmental policies aimed at employment creation. These three aspects of the problem, naturally, overlap considerably and it will be impossible to keep them entirely separate, but we shall attempt to deal with them in this order in the three main sections of the paper. 1. Empirical Evidence The problem of persistently high rates of unemployment in South Africa is of course by no means a new one. Estimates of Black unemployment on a year by year basis appear to be available only for the period since 1960. Official records of registered unemployment amongst Asians, Coloureds and Whites however, have been systematically maintained on a regular basis since 1948. In addition, it has been possible to compile a reasonably consistent series of unemployment rates for Whites covering the period 1914 to 1940, which is presented in Table 1.
Page 2 and 3: INSllIUTt TOR SOCIAL AND ECONOMIC R
Page 4 and 5: i CONTENTS Page - u.t of Tabla0 and
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 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
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might, JB (1982) "The Nature of Une
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Bell, Trevor : Unemployment in South Africa

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