We have reproduced the analysis section of the latest Adcorp Employment Index, released on February 13th, which we found very interesting. In it Loane Sharp, labour economist at Adcorp, analyses that, over the past decade, two important personal income trends have emerged in South Africa.
- The economy created 80 000 jobs in January, representing annualised growth of five percent over the previous month. Nonetheless, the economy is still 420 000 jobs short of the peak employment level observed prior to the 2009 global financial crisis.
- All employment contract types reported gains in employment, notably temporary work (+7.1 percent) and agency work (+eight percent). Temporary work now represents 3.87-million workers or 30.1 percent of the workforce.
- All sectors of the economy reported gains in employment, notably wholesale and retail trade (+13.6 percent), transport and logistics (+8.8 percent) and government (+3.1 percent).
- All occupational categories reported growth in employment, but high-skilled categories (management and professionals) reported the strongest growth (+4.7 percent), reflecting the economy’s ongoing reorientation toward high-skilled positions. Clerks, service workers and sales and marketing staff reported strong growth (+8.0 percent), reflecting the relative economic buoyancy of the consumer sectors of the economy.
Over the past decade, two important personal income trends have emerged in South Africa.
Firstly, after-inflation incomes have risen sharply from R44 431 per year in 2000 to R61 645 per year in 2011 — a real increase of 39 percent, or a respectable 3.3 percent per year.
Secondly, income inequality between the races, especially between blacks and whites, has declined sharply. In 2000 the average black South African earned 15 percent of the average white South African’s income whereas in 2011 a typical black person earned 40 percent of a typical white person’s income. Currently 1.3-million blacks (or 14 percent of the black workforce) earn as much as or more than the average white, up from 270 000 in 2000 – an increase of more than 1-million, or 378 percent.
To a great extent, the improvement in black incomes has been associated with the civil service. Over the past decade, government employment has increased from 1-million to 1.24-million, and the proportion of blacks in the civil service has increased from 42 percent to 74 percent. As a result, nearly 40 percent of South Africa’s highest-earning blacks are employees of the South African government. Partly this is associated with trade unionisation: currently 70 percent of the public sector workforce belongs to a trade union, compared to 26 percent for the private sector.
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