Africa-Press – South-Africa. A new indicator introduced by Statistics South Africa (Stats SA) shows that the country’s unemployment crisis runs far deeper than merely having a high percentage of people who are unemployed.
Using this new measure, Stats SA found that the country’s labour underutilisation rose over the past year, despite a decline in unemployment over the same period.
This measure extends beyond traditional unemployment figures to reveal how employed individuals are still underused in the economy.
On Thursday, 24 November, Stats SA outlined some of the new figures it will be measuring following a wide-reaching update to the agency’s Quarterly Labour Force Survey (QLFS).
Earlier this year, the agency announced that it would be changing the questionnaire it uses to collect the country’s employment data.
Updates to the survey are intended to bring South Africa’s statistics more in line with the latest international standards and better depict the country’s labour market.
These changes were piloted in 2024 and were implemented from the third quarter of 2025.
When these changes were announced, Stats SA said the additional indications will lead to a more detailed understanding of participation in paid and unpaid work and labour underutilisation.
This, in turn, will enable more targeted research and policymaking, as the country will have deeper insights into the labour market’s complexity.
One of the updates includes providing an additional measure of labour underutilisation to complement the previously existing unemployment and time-related underemployment measures.
The agency introduced four indicators of labour underutilisation measures, which capture other ways besides unemployment that people can be underused in the economy.
The first indicator, LU1, is the official unemployment rate, which measures those who want to work and are actively looking for work, but do not have jobs.
LU2, the second indicator, combines unemployment with time-related underemployment, which refers to people who are available for more work but working fewer hours.
The third indicator, LU3, combines unemployment with the potential labour force, which refers to people who want to work but are not actively seeking employment or are unavailable to start, as well as those who are not seeking employment but are available.
The last indicator, LU4, combines all the other indicators to create a composite measure of labour underutilisation, thereby including those who are unemployed, underemployed, and the potential labour force.
All four of these indicators in the third quarter of 2025 can be seen in the graph below, courtesy of Stats SA.
Unemployment crisis
In the third quarter of 2025, South Africa’s official unemployment rate declined to 31.9%, a significant improvement from 33.2% in 2025’s second quarter and 32.1% in the third quarter of 2024.
However, Stats SA found that South Africa’s labour underutilisation reached 44.9% in the third quarter of 2025.
While this marked an improvement from the second quarter of 2025, when labour underutilisation measured 45.5%, it marked an increase from 44.7% in the third quarter of 2024.
Stats SA explained that there were 13.3 million underutilised persons in South Africa during the third quarter of 2025.
Of these, 8 million were unemployed, 4.5 million were in the potential labour force, and 747,000 were in time-related underemployment.
In addition, the agency found that the problem of labour underutilisation is not experienced equally across all socio-economic groups, with data pointing to women and young people as the most affected.
The agency said the situation was particularly severe among young South Africans aged 15 to 24 years.
While the official unemployment rate for this group stood at 58.5%, their LU3 rate reached 69.3%.
This indicates that nearly 70% of young people in South Africa are either discouraged from seeking work, not actively seeking work, or unavailable despite wanting to work.
Coronation’s economics unit recently conducted an analysis of South Africa’s unemployment crisis in its latest quarterly Corospondent.
The unit found that South Africa’s unemployment rate is amongst the highest in the world, and is far higher than that of any country of comparable income.
While South Africa’s official unemployment rate is well-known, Coronation pointed out that what is most worrying is that long-term unemployment has steadily worsened as well.
The share of South Africans out of work for more than a year has risen from 63.9% in 2015 to 76.6% as of the second quarter of 2025.
This problem is compounded by the fact that long-term unemployment meaningfully reduces the probability of future employment.
South Africa’s employment-to-population ratio – just under 40% – is the lowest in the G20, where the average is closer to 60%.
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