Working Paper

Vulnerability in Employment: Evidence from South Africa

The high levels of poverty and unemployment in South Africa, have led to an emphasis on jobs as a solution to these problems. The subject of job creation in South Africa, is at the forefront of the most important economic policy documents, ever since the end of apartheid. However, this analysis shows, that whilst jobs bring down the unemployment rate, they are not necessarily a panacea for poverty. Vulnerability in the South African labour market is analyzed according to the twin characteristics of informal employment and low pay. Approximately a third of the labour force is either only low paid or informal and about 16% are both low paid and informal. This paper considered those who are both the most vulnerable, as these workers are significantly more likely to live in poverty than those with only one dimension of vulnerability, who in turn have a higher risk of poverty than those with no dimensions of labour market vulnerability. According to both Oosthuizen (2012) and this analysis, it appears that low pay has affected about a third of the employed from about 2007 until 2012. In contrast to the stability of low pay, informality experienced a significant drop from about 45% to about a third between 2008 and 2012. This can be traced to the increase in the prevalence of written contracts; although there is contradiction (depending on the data used) whether other benefits, like pensions and medical aid have followed suit.