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A report by the Bureau of Market Research, based at the University of South Africa, and trade union UASA points to a labour market under extreme pressure from adverse structural conditions, but also provides intriguing insights into some of the lesser-understood upsides of employment in South Africa.

The UASA Employment Report argues that South Africa’s macro-economic outlook is constrained by domestic factors such as low growth, infrastructure and logistical weaknesses, and inadequate investment. Globally, geopolitical tensions (such as conflict in the Middle East), rising prices for strategic commodities, as well as inflationary pressures exercised an adverse influence on domestic and global growth. The growth that South Africa was experiencing was too low and not labour intensive, so was making little impact on it, resulting in crippling unemployment.

Domestically, the growth of the labour force continued to outstrip growth in employment, and an inability to find employment in the economy remained one of the country’s most pressing political and economic challenges, especially among young people.

Looking at the connection between skills and employment, it found that noticeable improvement in the former was not reflected in the latter. These dynamics “suggest that South Africa’s labour market challenges increasingly reflect a structural disconnect with insufficient labour demand and weak employment creation rather than simply a shortage of skills”.

It also found that substantially more people participated in work than were captured by official data. This pointed to the importance of “informal, casual, subsistence, self-employed, and non-contractual work arrangements”.

Indeed, South Africa had seen a stagnation in formal, contracted employment between 2020 and 2025, while a growing portion of the workforce was operating outside of it. Some 41% of workers were engaged in non-contracted work, according to the report.

Among other things, the report pointed out regulatory barriers that undermined hiring. These included labour-intensive sectors like mining which had seen job losses. Spatial factors meant that available opportunities were out of reach of many job seekers, and a steady loss of highly skilled people to emigration weakened productivity growth in the economy.

In looking at the non-contract workforce, the report commented: “The scale of non-contractual work … points toward a labour market that is becoming progressively more fragmented and informalised. While many of these individuals remain economically active and contribute meaningfully to household income generation and productive activity, they frequently operate without the protections and benefits traditionally associated with formal employment relationships.”

As observers such as the late Lawrence Schlemmer and the author GG Alcock have noted, informal economies provide significant impetus to people’s livelihoods. The government response – both stated and in practice – has been to try and compel the formalisation of informal activity. It is unlikely that this would be possible, and, certainly under current realities, it is not desirable.