South Africa’s Job Security Still On Decline – LMI


South Africa’s declined unemployment has become a more depressing issue to the government and private sectors. Worst still is the declined job and wage security which has been on a steady decline since the second quarter of the year 2016, Labour Market Index (LMI) says.

According to the quarterly Solidarity ETM Labour Market Index (LMI), compiled by the trade union Solidarity and ETM Analytics, released on Monday, the index  has increased from an upwardly revised 41.2 in Q1 2016 to 42.1 in the second quarter of 2016, indicating continued difficult labour conditions in South Africa.

Gerhard van Onselen, economic researcher at the Solidarity Research Institute (SRI), said:

“Although there is some indication that the affordability of labour may have reached a turning point in the cycle, which could bring relief to employees, such a turnaround could only be confirmed in subsequent quarters.”

Index 1

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The LMI gives an index of employee confidence, labour affordability and the ETM Business Cycle Index. In terms of the index, 50 is the break-even level between rising and falling job and wage security.

Looking at the graph above, the LMI is well below the 50.0 threshold despite a little increase made within the second quartet of the year. This indicated an undeniable rapid job and wage insecurity, the report said.

The following graphs, according to BusinessTech, show how the first quarter of 2016 showed the worst rates of unemployment – across both definitions – since 2008, while GDP growth slowed to some of the worst levels in years.


Unemployment rates (Q1)

SA unemployment


Job Absorption Rates

SA job Absorption-rates


GDP growth


“This trend is confirmed by official Stats SA employment reports for Q1 and Q2 2016. Both showed a deterioration in hiring conditions, as employment declined in a majority of industries over the period.”

The union said retail employment trends were particularly worrying and served as a warning signal of broader macroeconomic slowdown.

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South Africa has one of the worst youth-unemployment problems in the world but analysts call for all hands to be on deck to involve  SA youths in the country’s economic change.

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