US embassy cable - 04PRETORIA3174

UNCLAS PRETORIA 003174 
 
SIPDIS 
 
DEPT FOR AF/S/JDIFFILY; AF/EPS 
USDOC FOR 4510/ITA/MAC/AME/OA/DIEMOND 
TREASURY FOR OAISA/BARBER/WALKER/JEWELL 
USTR FOR COLEMAN 
LONDON FOR GURNEY; PARIS FOR NEARY 
 
E.O. 12958: N/A 
TAGS: ECON, ELAB, KTDB, SF 
SUBJECT:  EMPLOYMENT COMPARISONS HIT PRESS 
 
Summary 
------- 
 
 1. (U) Users of South African employment data should 
 be aware of certain statistical anomalies.  Poor 
 statistical design in 2000 and 2001 caused formal 
 employment to be grossly underestimated in those 
 years.  In 2002, these design flaws were corrected 
 and formal employment was estimated to be 1.5 million 
 higher than the previous year.  Nonetheless, a South 
 African Reserve Bank (SARB) publication in June 2004 
 included a labor market study showing that formal 
 employment actually declined from 5.1 million in 1980 
 to 4.7 million in 2001.  "The Economist" picked up on 
 this faulty statistic and included it in an article 
 entitled "South Africa's Economy, Tack to the Left" 
 in the July 3rd-9th 2004 issue.  This cable is meant 
 to correct any confusion that this may have caused. 
 End Summary. 
 
 2. (U) In "South Africa's Economy, Tack to the Left" 
 in the July 3rd-9th 2004 issue of "The Economist", 
 the author cited a SARB study on South African 
 employment over the past 20 years showing more formal 
 sector jobs in 1980 than in 2001.  In short, drawing 
 this conclusion on faulty data was a mistake.  The 
 Economist should have noted that the author of the 
 labor market study had pointed out problems with the 
 data, explaining that his purpose was to analyze 
 employment trends by industry, rather than increases 
 or decreases over time.  The labor market study 
 indicated formal nonagricultural employment declining 
 from 5.1 million in 1980 to 4.7 million in 2001 -- a 
 drop of 400,000 jobs while GDP growth averaged 1.7 
 percent. 
 
 3. (U) The author of the "The Economist" article also 
 did not know that immediately following the release 
 of the SARB collection of labor market studies, 
 Statistics SA published a rebuttal challenging the 
 use of the 1980 and 2001 data to analyze overall 
 changes in formal employment.  The rebuttal explained 
 that the figures from the 2000 and 2001 surveys were 
 released as discussion documents rather than official 
 surveys because of poor statistical design.  When the 
 employment series resumed in 2002, about 1.5 million 
 more individuals were counted as employed in the 
 formal non-agricultural sector.  Moreover, 1980 data 
 used for comparison purposes excluded employment in 
 the homeland areas.  Users of South African 
 employment data should be aware of these statistical 
 anomalies. 
 
HUME