EDITORIAL | Jobless rate has fallen, but let’s not get too excited

The announcement on Tuesday that the country’s unemployment rate fell for the first time in seven quarters to 34.5% from 35.3% in the final three months of 2021 should, under normal circumstances, give us hope.

But a cursory look at the numbers and factors influencing the positive change indicates that the smidgeon of growth in employment is fuelled by developments across the globe that, at the same time, have also unleashed an unprecedented increase in energy costs. 

StatsSA said on Tuesday that manufacturing (263,000) and mining (36,000) contributed significantly to the increase in jobs, stoked, it said, by Russia’s war with Ukraine, among other factors. In other words, the commodities boom is, in part, thanks to Vladimir Putin’s warmongering and, as a consequence, we derive some benefit we can’t exactly bank on for the future. Crudely put, this growth in employment should not give anyone hope because it is based on global developments we can’t control.

Further, the department of mineral resources and energy announced on Tuesday an increase in petrol price by between R2.33 and R2.43 per litre while diesel also went up by R1.10 by midnight on Tuesday.

This raised the inland price of petrol to a record R24.17 for 95 unleaded and R23.94 for 93 unleaded. This changes everything. Almost all of life is impacted by changes in energy costs. In lay language, it means the price of consumables will increase because of increased transportation costs. It means the cost of commuting and thus accessing opportunities has become higher. It also means manufacturing and everything that needs processing or delivery will be negatively affected.

What is the principal reason for this? The central energy fund (CEF) told us the price hikes are a result of an increase in international petrol, diesel and paraffin prices and the rand depreciating against the dollar. In essence, this means there is not much our government can do to reduce these globally influenced prices, the same way our increase in jobs was happening largely due to international factors.

It is true the government also announced it would extend the temporary reduction in the fuel levy for another two months. In the first month, the reduction will be about R1.50 per litre and this will be adjusted downward to 75c per litre from July 2. While the reduction seems a bit helpful (staving off a possible R4 per litre increase in fuel from today), the downward adjustment communicates that government cannot go on forfeiting revenue from this levy. Put differently, it means the government’s help is not only temporary, it just can’t be relied on. 

As if to make this point much clearer, the latest Household Affordability Index, which tracks food price data from 44 supermarkets, showed that the average cost of the food basket has increased by almost a jaw-dropping 12%. 

In the end, it means the war on the pockets of South Africans is not just under way, it’s getting uglier. The poor and the working class are particularly facing their toughest test – and their government can only fiddle but is incapacitated to stop the onslaught. The 7.8-million people StatsSA told us are unemployed and other vulnerable people are sitting ducks facing a perfect storm.