UNEMPLOYMENT MEASUREMENT REMAINS PROBLEMATIC  01-AUG-00

Summary : Statistics SA (SSA) announced yesterday that, according 
to the 1999 October Household Survey (OHS), the unemployment rate was 
23.3% last year, as opposed to 25.2% in 1998. This just does not seem to 
be a plausible finding. It will take some time before these measurements 
become more reliable and the numbers sufficiently steady to provide a 
clear trend. It seems reasonable to expected that unemployment became 
worse in 1999. So, either the rate for 1998 was too high, or the rate 
for 1999 is too low.

(2) SA has a serious unemployment problem. It is, however, not much 
worse than that of most developing countries, or third world emerging 
market economies. As with crime, SA has a relatively sophisticated 
measurement system and tends to get negative assessments because it 
measures indicators which are not meaured by many of its peers.
(3) The innovative work which SSA is doing is highly commendable, 
especially the OHS, which measures not only unemployment, but also the 
access of all population groups and areas to basic services, such as 
housing, water, electricity and telecommunications.
(4) According to SSA the economically active population (those in the 
age group of 15-65 who are able and willing to work) increased by 7.8% in 
1999. This growth rate seems very high. While those in the 15-65 age 
group grew by 2.2%, it is unlikely that the preference for this group to 
participate in the labour force increased so much more rapidly. This 
seems like a fairly substantial behavioural change in one year. A 
smaller growth in the economically active would obviously have reduced 
the unemployment rate even more.
(5) According to SSA employment, in the formal non-agricultural 
sector grew by 2.7% in 1999. Employment in formal sectors covered by 
regular surveys declined by 2.1%, but those employed in other formal 
sectors grew by 19.3%. The nature of the latter sectors suggest that 
positive growth was possible, but 19.3% seems to be too high. 
(6) Employment in the informal sector increased by 31%, according to 
SSA. While an increase is realistic, the extent of the growth is too 
high.