Last week, I wrote about my feelings towards the unemployment statistics, a print I have covered since I started my career with the ambition of reviving a disappearing beat — labour journalism.
Every couple of months, this data drops, breaks our hearts and then, as chronically crestfallen people are wont to do, we move on.
This week’s data — which showed that the unemployment rate retreated almost imperceptibly, from 32.9% to 32.7% in the fourth quarter of 2022 — was certainly not enough to ruin our week. In fact, the fourth consecutive decline in the unemployment rate gave some reason for a pat on the back because, according to Minister in the Presidency Mondli Gungubele, it is evidence that the government’s economic recovery plan is working.
But as good news goes, it is still pretty bad news, especially considering that the youth unemployment rate rose to an unacceptably high 61%.
Apart from its temporarily sobering effect, the unemployment data is important for another reason — its ability to impart a pretty down to earth reading of what is going on in our economy.
This is where one interesting feature of this week’s print comes in. According to Statistics South Africa’s report, the country’s economy created 169 000 jobs in the fourth quarter of last year. Almost all of those jobs, 167 000 of them, were created in the Western Cape.
A mere 2 000 jobs were created in economic hub KwaZulu-Natal, which ought to have gotten a leg up from the end-of-year rush of tourists. Gauteng, on the other hand, detracted from the overall number, losing 18 000 jobs.
As Investec economist Lara Hodes pointed out, the bump in jobs in the Western Cape likely has something to do with the so-called semigration trend, which has seen an influx of skilled workers moving to the province.
Migration in itself is an important lens through which to analyse the shape of economies. Afterall, throughout history people have tended to move towards opportunity and away from the promise of misfortune.
South Africa’s economy is a product of migration — and the other way round. Consider the mining industry, the historic bedrock of the economy, which would not have grown to the extent that it did without the migration of prospectors and labourers to certain parts of the country.
Johannesburg, now a city that some seem to be fleeing in favour of a coastal lifestyle, was forged of gold. The discovery of those glittering nuggets in the Witwatersrand in 1886 prompted a gold rush that made titans of industry, who would go on to control other parts of the South African economy, including the country’s media.
The ascent of the Randlords also gave rise to repressive labour policies, which protected their wealth and the interests of white workers, and paved the way for apartheid.
The Truth and Reconciliation Commission’s business and labour hearings found that the mining industry was deeply complicit in apartheid, noting that its “direct involvement with the state in the formulation of oppressive policies or practices that resulted in low labour costs (or otherwise boosted profits) can be described as first-order involvement [in apartheid]”.
Apartheid-era policies left scars that South Africa’s economy still wears. That dark period’s economic tyranny also had a profound effect on how — and in what parts — the country’s urban centres grew. In Johannesburg, apartheid ensured that the city’s leafy suburbs remained white enclaves, which are now dotted with “For Sale” signs.
The semigration trend is largely associated with changes in the way that we do our jobs, set off by the pandemic and the rise of remote work. Though it feels like a distinctly South African phenomenon, the white elite fleeing south, Covid-era semigration happened all over.
In the US, where gold and oil discoveries once led to the growth of boomtowns, the pandemic triggered the rise of “Zoom towns”, like Truckee in California. A newsletter for NPR’s Planet Money podcast called the housing boom in that particular mountain town “the perfect symbol of two Americas in the age of the pandemic recession”.
You might describe South Africa’s semigration in similar terms.
For the majority, the pandemic marked the beginning of a long slide in their standards of living. Compared to the first few months of 2020, this group is significantly worse off.
But for others, the pandemic represented an opportunity — to escape Johannesburg’s hard edge in favour of a softer, less backbreaking, lifestyle. In the wake of an historic downturn, which resulted in 2.2 million people losing their jobs, those who were able to take advantage of this opportunity had to have had the means to do so.
They had to have the requisite wealth and they had to have the right jobs, which in South Africa are still largely determined by the divisions entrenched by apartheid.
As much as this group was chasing opportunity, it was also fleeing misfortune. You see, the semigration phenomenon is about more than just different ways of working.
The recent Knight Frank Wealth Report, which is touted as a guide to prime property markets and global wealth distribution, showed that Cape Town moved up 63 places on the Prime International Residential Index from 94th to 31st.
Of Cape Town’s rise, Knight Frank South Africa director Nick Gaertner said: “Having slipped due to it feeling the effects of the pandemic on a third world country, it has again proved incredibly resilient and is once again attracting both South Africans from other territories as well as foreign buyers … While the broader South Africa continues to struggle with poor governance, strong leadership in the City of Cape Town has managed to steadily separate it from other regions within the country and develop itself into a growlingly desirable destination globally.”
While semigration has not exactly taken the life out of Johannesburg, it has exposed the city’s underlying hostility — which has seemingly become more acute in recent years amid a steady deterioration of services. And what has now become clear is that some parts of the country’s economy will be hit harder by inadequate service delivery than others.
Economies tend to grow where people flock and wither where they flee. So as long as the country’s economy continues to be split between these two South Africas, its growth will remain uneven.
