Three and a half million. That is the number of South Africans who have stopped looking for work, according to the Quarterly Labour Force Survey released this week.
The figure increased by 126,000 between the third quarter of 2023 and the third quarter of 2024.
It is a number that should have been front-of-mind for the ten leaders of the Government of National Unity (GNU) when they gathered for their retreat at the Cradle of Humankind two weeks ago.
“We cannot achieve all our reconstruction and development goals in a single year. We have neither the capacity nor the resources. So, we have to choose what to put first… These priorities must be the nation’s priorities,” Finance Minister Enoch Godongwana said.
It should also have weighed heavily on Godongwana as he presented the 28th Medium-Term Budget Policy Statement (MTBPS), a tradition introduced by former finance minister Trevor Manuel in 1997.
Discouraged work seekers matter because they are the easiest to draw back into the labour market.
Any economic intervention that creates short-term job opportunities can re-engage someone recently discouraged, defined by Stats SA as a person who has not searched for work in the preceding seven days, far more easily than someone who abandoned the search years ago.
Of course, there is an even larger and more deeply worrying number: eight million unemployed South Africans.
That figure declined by 300,000 over the past year, but not because work suddenly materialised; 112,000 people simply exited the labour force.
Among the unemployed are those trapped in long-term joblessness and, many who may never work again.
That heartbreaking reality deserves its own conversation.
Since its inception, the MTBPS and the Medium-Term Expenditure Framework have helped government navigate crises; from the Global Financial Crisis, when South Africa still had borrowing space, to Covid-19, when spending could be swiftly reprioritised.
Yet, if you are unemployed today, you may well wonder when your plight will ever make it onto the priority list.
Instead of providing short-term stimulus to reignite economic activity and give hope to discouraged work seekers, this week’s budget conversations — both in Parliament and at a Rand Merchant Bank event the following day — focused primarily on the 17 million employed South Africans and how to protect their wages and savings, including pensions.
Discouraged job seekers listening to these discussions heard one message: wait. Wait for structural reforms to take effect. Wait for policy shifts. Wait for economic growth; possibly in a year, or three.
Godongwana reiterated that reforms in energy and logistics are central to lifting growth to levels “demanded by our developmental needs”.
Yet he also conceded that the economy is expected to grow at only 1.8% between 2026 and 2028; nowhere near enough to reverse unemployment.
“This is the first time since the 2008 financial crisis that public debt will not grow as a percentage of GDP,” Godongwana said.
But for the discouraged work seeker, the question remains: will this free up spending that actually creates jobs? There is no clear answer.
Infrastructure spending is meant to provide hope.
Capital expenditure is the fastest-growing budget item over the medium term, at 7.5%. Yet implementation remains painfully slow.
One executive once described the pace of infrastructure rollout as “glacial”.
Indeed, government’s sluggish infrastructure delivery, both nationally and through state-owned entities, is a key reason fixed investment remains weak and growth for 2024 has been revised down to 1.2%.
Yes, Treasury has relaxed approval processes for small municipal projects, welcomed unsolicited bids, and launched the Infrastructure Finance Institutional Support Agency to help build a pipeline for Budget Facility for Infrastructure projects.
But unlocking R4 billion in a R1 trillion economy barely shifts the needle for someone waiting for work.
Over the years, multiple interventions, namely the Infrastructure Development Act, the Presidential Infrastructure Coordinating Commission, and the Sustainable Infrastructure Development Symposium (SIDS), have failed to deliver the promised results. The discouraged continue to wait.
This budget also marked a clear win for Reserve Bank Governor Lesetja Kganyago, who succeeded in pushing for a lower 3% inflation target; a move he publicly advocated with strong market backing, blindsiding Godongwana.
The minister tried to downplay the defeat, noting he has known Kganyago “for 35 years, since he was 24 years and four months old” — a strangely precise defence.
He said the consequences will be borne by the unemployed as the economy adjusts to a lower inflation target, rate cuts may be delayed and nominal GDP growth may weaken.
INSIDE POLITICS
