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South Africa is notorious for its persistently high unemployment but slow job creation rate. Numerous government economic growth strategies (RDP, AsgiSA, New Growth Path and National Development Plan) set explicit quantitative employment goals over the years. However, having a job entails much more than merely not being unemployed, as there are "good" and "bad" jobs, and one must ensure a basic living standard is met.
Job quality consists of two areas, namely work quality and employment quality. Work quality reflects how the work activity and the conditions under which it takes place affect the workers' wellbeing, and includes dimensions such as intensity, autonomy and safety in the work environment. In contrast, employment quality represents aspects of the employment relationship that potentially affect the workers' wellbeing, such as employment security, decent wages, work hours and work-life balance, and employer-employee relations.
In the first local empirical study that comprehensively examines employment quality in the South African labour market, I considered 18 indicators from seven dimensions to derive an index for employees during the 2010-2016 period. The index is ranged between zero and one; the higher this index, the better employment quality the worker enjoys.
The empirical findings indicate that the best-performing indicators are as follows: above 95% were not time-based underemployed; nearly 90% were not over-education underemployed; the past week's work hours equalled usual weekly work hours for about 85% of employees; nearly 80% had written contracts with employers; and about 80% had been working for existing employers for at least one year.
In contrast, the proportion of employees meeting the thresholds was below 50% in the following five indicators: members of trade unions (approximately 30%); entitlement of medical aid benefits from employers (30%); at least 50 workers in the firm (37%); dialogue involved in salary determination (dropping from 48% in 2010 to about 37% in 2016); pension fund contributions by employers (48%).
Interestingly, the mean employment quality index was very stable between 2010 and 2016. Nonetheless, highly educated white employees who live in the Western Cape and Gauteng, and are involved in highly skilled managerial and professional occupations in the formal sector, enjoy the best employment quality.
In contrast, employment quality on average is the worst for African workers involved in unskilled, informal and elementary occupations in Eastern Cape, KwaZulu-Natal and Limpopo.
Lastly, it is interesting that workers in the mining, electricity and water industries enjoy the highest employment quality (the mean index is above 0.8).
Despite these ground-breaking findings, there is still room for improving this index further. First, Stats SA should consider asking more questions on employment quality, in particular training and skills development opportunities, workplace relations and work motivation.
Secondly, the Quarterly Labour Force Survey currently does not ask questions to capture information on work quality; once these questions are asked, it would become possible to derive not only the employment quality index, but also work quality index and the broader job quality index – so that one can conduct a deeper analysis to investigate job quality.
- Derek Yu is associate professor at the Department of Economics at the University of the Western Cape (UWC).
