Nearly 80 percent of Zimbabweans are gainfully employed, according to the latest labour force survey by the Zimbabwe National Statistical Agency (ZimStat), which waters down claims of unemployment rates of as high as 90 percent.
In its 2023 Second Quarterly Labour Force Survey, ZimStat says the unemployment rate in Zimbabwe is 19,7 percent.
The country is a member of the International Labour Organisation and subscribes to internationally acceptable principles and definitions of labour market indicators.
ZimStat also emphasises the official definition of unemployment because of its international comparability.
In Zimbabwe, the labour force comprises persons 15 years and above, according to ZimStat. When ZimStat conducts household-based surveys to collect data on unemployment, first, it asks if one has done any work for pay or profit in the last seven days. Secondly, it seeks to ascertain whether one tried to find a job or start a business in the last 30 days and, thirdly, ZimStat asks if the person is able to start working within the next 14 days if an opportunity arises.
The data captures people engaged in both formal and informal economic activities.
ZimStat says the logic behind the first question is to ascertain whether one has done any economic activity to generate income or not. So, by definition, if one was engaged in an economic activity during the reference period that resulted in an income, then one cannot be deemed unemployed.
The essence of the second question is to determine if one was actively seeking employment. Those not actively seeking employment are termed discouraged job seekers or persons who are no longer seeking employment, maybe because it has taken too long to secure a job.
Such people, according to ZimStat, cannot fall under the category of people considered unemployed.
The rationale behind the third question is to establish persons who are not available for employment due to various reasons. Those not available for employment and discouraged job seekers are not included among the unemployed.
As such, for one to be classified as unemployed, the answer should be “no” to the first question and “yes” to the second and third questions. ZimStat director-general Mr Takura Mahonde says the statistical agency had noted claims of perceived unemployment rates of as high as 90 percent, saying such figures were not scientifically backed, with the potential consequence of misinforming the public.
Explains Mr Mahonde: “Two major types of misconceptions on labour statistics pertain to employment in the informal sector and labour underutilisation. It is a common pitfall to assume that employment relates to the formal sector only. This stems from the opinion that the formal sector should absorb all the labour supplied on the market.
“Unfortunately, this view falls short of what constitutes employment as it excludes persons employed in the informal sector and the self-employed. Further, some analysts are of the mistaken view that persons who are underemployed, that is, whose labour is underutilised, are unemployed.
“Unfortunately, this perception would exclude the following: precarious employment (casual and part-time workers), time-related underemployment (employed persons available and willing to work more hours provided they are remunerated) and persons in qualifications mismatch (who are over-qualified for their jobs.)”
Since the turn of the millennium, the economy went through a structural transformation, which created empowered individuals who are no longer relying on formal employment for sustenance, but have created their own small businesses.
The culture of being an employee for big business has been replaced by an empowerment mentality, in which the person on the street has effectively become “his own boss”.
While a lot of workers have been thrust into this situation as a result of job losses in the formal sector, there has been a substantial redistribution of wealth from the big business to small one, thereby empowering previously unempowered individuals.
Big businesses have been replaced by micro, small and medium enterprise (MSMEs) informal traders in key economic sectors such as agriculture, mining, retail, manufacturing, construction and transport.
The loss for big business has been the gain for individual economic empowerment.
With over 65 percent of the people living in rural areas and the bulk of the urban population operating in the informal sector, it is clear that the sector is now the biggest employer.
Mr Mahonde notes that Zimbabwe’s labour force is estimated at 4 034 721 as of July 2023, from a population of 15,3 million.
“If we are to go by the thumbsuck figure of a 90 percent unemployment rate, we would have a 10 percent employment rate.
“This would give us employment to national population ratio of 403 472 to 15,3 million, which reduces to 1:38.
“This would mean, on average, one employee person is providing for 38 persons, which is impossible. This, therefore, means, there are much less unemployed persons dependent on the employed,” Mr Mahonde says.
Some analysts have concurred with Mr Mahonde, saying excluding people engaged in informal businesses was misplaced.
“The only challenge is that the size of the informal sector is not known; its contribution to the GDP (gross domestic product), but that does not take away the fact it is the largest employer,” economist Mr Effort Paradzai said.
Carlos Tadya, a Harare-based economist, said it was critical to incorporate the informal sector into the mainstream economy so that they can contribute to the fiscus.
Finance and Development Minister Professor Mthuli Ncube is on record acknowledging the expansion of the informal sector is shrinking the country’s taxable base.