Employment and labour

Health and education mostly contribute to human development through building up and sustaining the quality, employability and productivity of labour. Employment and labour productivity can be seriously adversely affected by poor education and ill health.

The basis of employment in any country or region is the total labour force. Formally, total labour force is the sum of all people aged 15 years and older who engage actively in the la-bour market, either by working or looking for work during a reference period. It includes both the employed and the unemployed.

The size of the labour force in SADC has been growing steadily since 1990¹⁶, but the growth rate has been slowing (Figure 2.9). This means that each year fewer new people are included into the labour force, compared to the proportion of new people included the previous year. The labour force growth rate did start to increase from around 2004/2005, but this trend was reversed in 2009, probably on account of the global financial and eco-nomic crises.

Economic growth is essential, but not sufficient to achieve the MDGs. Macroeconomic and structural policies that promote employment, economic inclusion, empowerment and social investment are crucial. Ensuring that growth is pro-poor requires changes in the institutions, law and practices that perpetuate poverty. Employment is an essential ingredient in the fight against poverty and in achieving growth with equity.

From the Role of Employment and Labour Markets in the Fight against Poverty http://www.oecd.org/dataoecd/26/49/43280231.pdf

16 All the employment statistics reported in this section were obtained from the WDI and were the latest at the time of preparing this report. No figures for 2011 were available and in some cases, the latest data did not go beyond 2007.

Figure 2.9: SADC total labour force and labour force growth rate (annual % change)

Source: Constructed from World Bank WDI data

There were considerable differences in total labour force size across SADC. DRC (21.7 per cent of the total), Tanzania (19.0 per cent) and South Africa (15.6 per cent) were the economies that contributed the most to the total labour force in SADC as of 2010 (Figure 2.10). Naturally, the economies with small populations contributed relatively small shares of the total labour force. The female labour force in SADC averaged 47 per cent of the total labour force in 2010. Mozambique had the highest proportion of female labour force in the subregion while Mauritius had the lowest.

Figure 2.10: Country shares (%) of total SADC labour force, 2010

Values in parenthesis are the average female labour force as a proportion of the total labour force (1990-2010) Source: Constructed from World Bank WDI data

The total number of employed persons in SADC grew steadily from about 46.7 million people in 1991 to 71.9 million in 2008. This reflected a period average employment growth rate of about 2.5 per cent for overall employment and 2.4 per cent for female employment (Figure 2.11). Employment is one of the most important drivers of human development, given its critical role in tackling income poverty and its implications for poverty reduction. A healthy, well-educated and therefore employable population increas-es its prospects for poverty reduction and human development if employment opportuni-ties are created. This is particularly important for the poor because their labour is the main asset they have for engaging in economic activity as they seek to give up their labour in exchange for gainful employment.

It is also not surprising that the leading economies in terms of contributions to SADC’s total employment in 2008 where DRC (31.6 per cent of the total employed persons), Tanzania (25.5 per cent) and South Africa (19.3 per cent), as with the contributions to total labour force. However, these proportions have to be read with caution because em-ployment data were not available for a number of countries, including “big-population”

economies such as Angola and Mozambique.

Figure 2.11: Total employment in SADC and employment growth (annual avg. %)

No data available for Angola, Madagascar, Mauritius, Mozambique and Seychelles Source: constructed from Country Data Tables (Annex 1)

Figure 2.12: Country absolute employment and shares in total SADC employment (2008)

Values in parenthesis are the country shares in total SADC employment No data available for Angola, Madagascar, Mauritius, Mozambique and Seychelles Source: constructed from Country Data Tables (Annex 1)

Youth unemployment is one of the most pressing problems on the African continent. In SADC the ratio of employment youth to the population aged between 15 and 24 years was around 46.5 per cent on average during 1990-2010, compared to a total employment to population ratio (per cent employed compared to population of ages 15 years and older) that averaged 57.9 per cent during the same time period (WDI estimates). This sug-gested that the bulk of unemployment is the SADC subregion was youth unemployment or unemployment of persons aged 15 to 24 years.

The proportions of youth employment to population ratios were fairly constant or margin-ally increased during 1991-2010 in most countries in the SADC subregion. By the close of the reference period (i.e. in the 2006-2010 interval), Madagascar, Mozambique, Tanzania and Angola held the highest youth employment ratios in SADC. Only a few countries such as Angola, Mozambique, Namibia, Swaziland and South Africa experienced declines in their youth employment ratios. Surprisingly South Africa held the second lowest youth employment ratio in the subregion.

In addition, returns to employment have been generally poor in the subregion. Figure 2.14 (below) shows a labour productivity index for selected countries in SADC. Except for Mozambique, whose labour productivity increased steadily during the reference period, all the SADC countries experienced deteriorating labour productivity relative to their 1991 productivity levels. Countries such as Angola, Tanzania and Zimbabwe recorded particu-larly dramatic deteriorations in labour productivity.

The implication of this observation is that labour, which is typically paid according to its productivity or marginal contribution to the production processes, will attract increasingly lower rewards as productivity declines in SADC. For the poor, whose labour is their main asset for economic participation; this poses particular difficulty and limits their prospects for poverty reduction and development. There is therefore an urgent need to determine the root causes of the continuous decline in labour productivity across SADC.

Figure 2.13: Youth employment to population ratio (% ages 15 and 24)

* No data for 1996-2000 and 2000-2004 intervals; No available data for Seychelles Source: constructed from Country Data Tables (Annex 1)

Figure 2.14: Index of labour productivity (GDP per person employed, % growth [1991 = 100])

No data available to do the calculation for Botswana, Lesotho, Mauritius, Namibia, Seychelles, South Africa and Swaziland

Source: constructed from Country Data Tables (Annex 1)

SADC member States are characterized by high rates of unemployment and underem-ployment with structural distortions, especially among women. The unemunderem-ployment rate in SADC averaged 13.4 per cent during 1990-2010 (Table 2.10). This ranged from the lowest rate of 2.2 per cent in Mozambique (though the possibility of data problems is acknowledged) to the highest rate of 30.6 per cent in Lesotho.

Table 2.10: Unemployment rate in SADC (% of total labour force), 1990-2010

No data available for Angola and DRC; * No data on female unemployment and only one data point for total employment; ** only one data point for each of total employment and female employment Source: constructed from WDI

The female unemployment rate was systematically higher than the total employment rate across SADC, except in Mozambique and Zimbabwe. This implies that female unem-ployment was higher than male unemunem-ployment, a sign of persisting gender imbalances throughout the subregion. This is an important structural distortion that needs to be ad-dressed at both the national and subregional levels. Employment structural distortions are caused typically by: inadequate mainstreaming of gender concerns; weak institutional and human capacity; lack of positive cultural attitudes towards productivity, entrepreneurship and innovation; and lack of various comprehensive policy and regulatory frameworks.

Understanding the main root causes of employment-related gender imbalances in SADC will be an important first step towards redressing them.