The (Lack of) Jobs Stats - Q1 2025
Policy + Execution: How Cape Town Is Creating Jobs
The great economist Thomas Sowell once quipped:
“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”
It is a sentiment that feels particularly acute when one reads through the most recent Quarterly Labour Force Survey for Q1 2025, released this week by Statistics South Africa.
The national (lack of) job stats picture is, in a word, grim. Unemployment is in total number of unemployed back where it was same time last year. The expanded unemployment rate, which more honestly reflects the daily lived experience of millions by including those too disheartened to look for work, has risen to 43.1%. In real terms, 8.2 million South Africans are officially jobless, and nearly 11 million are not economically active.
These statistics are verdicts on policy.
And yet, within this evident economic stagnation, there is a bright glow coming from the southwestern tip of the country. Cape Town, the Mother City, has done what the nation could not: it created 86 000 jobs in one year. According to the same StatsSA report, Cape Town now boasts a record-high employment level of 1.827 million people, and its expanded unemployment rate of 24.7% is the lowest among all metros. Its labour force participation rate at 74.6% speaks of a city in motion, alive with economic possibility, at least the most possibility in the country..
We must resist the temptation to cast Cape Town’s performance as an anomaly. It is not a statistical glitch, nor a product of caprice. It is the fruit of a deliberate strategy executed over more than a decade with policy coherence, relative institutional stability, and a governing culture that remains more service-oriented than any of its counterparts. And crucially, it is a glimpse of what South Africa could be, if only it could learn to govern itself.
The National Problem
Let us begin, as one must, with the national dilemma. The post-pandemic recovery, if it can still be called that, has proven shallow and erratic. The small employment gains recorded at the end of 2024 have been wiped out in one quarter, suggesting not only economic volatility but also a lack of structural resilience in our job-creation apparatus.
To wit:
The formal sector shed 245 000 jobs, notably in trade, construction, and social services.
Youth unemployment remains catastrophically high, with over 45% of 15–34-year-olds not in employment, education or training.
Provinces like KwaZulu-Natal, Limpopo, and North West recorded significant employment losses and rising unemployment.
To put it bluntly, this is quite the existential economic crisis.
What South Africa sorely lacks is economic leadership rooted in accountability. National government tinkers with policy instead of overhauling it. National government passes master plans without execution. They hold conferences while factories shutter. And they legislate labour protections and equity plans that, paradoxically, protect people from employment itself.
A City of Hope
Against this backdrop, Cape Town’s labour market success is frankly a political miracle but made possible by sound policy and accompaning implementation of the sound policy. Success requires both.
The city's approach has centred on fostering sector-specific partnerships in industries like business process outsourcing, marine manufacturing, textiles, and technology and committing to proactive infrastructure investment with R39.7 billion allocated over three years expected to generate 130 000 construction-related jobs. Moreover and importantly it maintains institutional credibility through clean audits, efficient service delivery, and transparent governance. Something mostly anomalous in most of the rest of the country.
This has yielded tangible results. In 2024 alone, the City secured R6.4 billion in investments and directly supported over 15 000 new jobs. As Alderman James Vos of the City of Cape Town has himself rightly noted, this isn’t an accident but the result of an ecosystem designed to retain and attract enterprise.
And yet, while optimism is warranted, so too is humility. Cape Town’s success must not become an excuse for complacency. The City’s job creation while laudable still has many boats to lift. But the City is certainly doing the most that it can within its means and within the constitutional structure that limits its powers over national economic levers such as immigration, trade policy, and labour law. What it can control—governance, investment facilitation, and infrastructure delivery—it is largely getting right.
Moreover, Cape Town cannot become South Africa’s escape hatch, a place the middle class flees to when the rest of the country falters. It must be the template, not the exception.
A Tale of Two Governments
The contrast between national drift and Cape Town’s relative dynamism is stark. So what explains this divergence?
The real difference lies in governance. Not in party politics per se, but in political culture. A willingness to plan, to execute, and most importantly, to get out of the way and make it as easy as possible so that markets can do the heavy lifting.
Cape Town has, for the most part, understood this. It does not try to control the economy. It tries to enable it. It does not treat investors as adversaries. It treats them as partners. It does not moralise about profit. It seeks to create the conditions for it.
Compare this with national policy, where business is often viewed with suspicion, and where labour law reforms are treated as ideological heresy. Where red tape suffocates SMMEs before they are even born. And where “state-led development” has become a euphemism for bloated bureaucracy and cadre deployment.
If Cape Town teaches us anything, it is this: markets flourish when states are smart enough to know their limits.
Cape Town is not perfect. But it is proof of concept and one which the rest of the country is increasingly seeing as proof. It is a reminder that policy still matters, that governance still shapes outcomes, and that hope, while battered, has not yet vanished from South African soil.
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