Demographic Employment and Wage Trends in South Africa
Over the past two decades, the economic growth in South Africa has been driven primarily by the services sector; namely the financial and business services sector, construction, and to some extent wholesale and retail trade. The drivers for employment growth is mainly the services sectors, and in particular, higher-skilled occupations. This is against a backdrop of stark human capital deficits that are a result of elevated rates of high-school dropouts and low levels of learning for those that do complete high school. These two factors, in combination, are arguably central to the persistently high levels of unemployment and inequality. The growth of the TES sector was shown to be a relatively new labour market trend. Part of the growth in services employment has been the rise in labour brokers that source workers for the TES sector. On the surface, it seems to be related to South Africa’s stringent labour market regulations, however, this needs deeper investigation. This paper has also shown that an important trend in the South African labour market has been the rising share of workers in the public sector, and in Government in particular. Job creation in Government over the last six years is concentrated in unskilled and medium-skilled occupations, and the data suggests that it may be linked to a Government-lead programme to create jobs for the unemployed and the unskilled in activities relating to infrastructure building, public safety, and other community-based public service jobs. Overall though, there are higher average wages in the public sector relative to the private sector.