SA youth not unemployed, rather under-employed

South Africa’s youth are not so much unemployed as underemployed and uncounted, according to a news report that states Generation Z is far from inactive.

According to the results of the Quarterly Labour Force Survey conducted by Statistics SA, the official unemployment rate for the first quarter was 32.9%. For the youth, defined as people between the ages of 15 and 34, the total number of unemployed increased by 151 000 to 4.8 million, while employed youth recorded a decrease of 153 000 to 5.7 million.

As a result, the youth unemployment rate increased from 44.6% in the fourth quarter of 2024 to 46.1% in the first quarter of 2025. These figures caused an outcry yet again, with many organisations expressing their dismay at this high rate of unemployment.

However, it seems that the youth unemployment rate tells only part of the story. Emerging data, including the newly released Gen Z Economy Report, suggests that this generation is far from inactive. They are not unemployed but rather under-employed, Ronen Aires, CEO of Student Village, says.

Student Village, in partnership with futurist, economist and business trends analyst, Bronwyn Williams of Flux Trends, released The Gen Z Economy Report: Cash, Culture and Clout, earlier this month.

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Youth are not unemployed, just not formally employed

This research report shows that Gen Z is not idle. “They are hustling in the shadows of a broken system that fails to count them, let alone support them. Only 16.6% of Gen Zs identify as unemployed. They are participating in the economy, just not in the conventional ways captured by official data.”

The report is based on responses from more than 900 South Africans between the ages of 18 and 30 and paints a picture of a generation shaped by financial pressure and economic uncertainty but defined by grit and ingenuity, Williams says.

“Young South Africans operate outside the boundaries of formal employment today. They are creators, freelancers, micro-entrepreneurs, influencers, digital editors, crypto traders, tutors and resellers, blending education with gig work, supporting themselves through multiple income streams and carving out economic agency in an environment where traditional pathways are shrinking.”

Yet, Willaims points out, the metrics still label them as “NEETs” (not in education, employment or training). She says this narrative is not only outdated but also misleading.

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Employment data misses the nuance and leaves an incomplete picture

Aires says when data misses the nuance, policies and strategies do too and when businesses, employers and institutions rely on incomplete pictures, they risk missing out on one of the most agile and driven generations yet.

Key findings from the Gen Z Economy Report include:

• Side hustles are the main income source for Gen Z at 21.7%, followed by parental support (20%) and Nsfas grants (17.5%).
• Most Gen Zs are earning below R5 000 per month, yet 90.5% are saving regularly, despite low-income levels.
• Savings go primarily toward emergencies (25.75%) and education (19.83%), signalling both anxiety about the future and strong aspirational intent.
• Gen Z places high value on financial independence, ethical alignment and personalised, digital-first experiences.
• Nearly 30% are already exploring cryptocurrency and alternative investment platforms, reflecting a mindset that is cautious as well as forward-thinking.

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Do not underestimate Gen Z

Aires says for sectors like banking, retail, telecoms, alcohol and personal care goods, this report should serve as a clear wake-up call as it shows that this generation wants authentic value, mutual respect and long-term relevance.

“Stereotypes about disinterest or irresponsibility do not hold up under scrutiny, as Gen Z is financially literate and looking for meaningful engagement and value from businesses and brands. Young South Africans are navigating a shrinking economy with grit, creativity and pragmatism.

“If we continue to underestimate them, we squander one of our most powerful engines for inclusive economic recovery.”

The formal employment outlook may be bleak, but South Africa’s youth economy is active, adaptive and growing in influence, Williams says. “It is time to move beyond outdated narratives and start building real opportunities that reflect the reality on the ground.”

ALSO READ: Is South Africa’s unemployment rate really only 10%?

Capitec CEO also wonders about who is really unemployed

The Gen Z report is not the only one to doubt the unemployment data. Gerrie Fourie, CEO of Capitec, said last week that Statistics SA should rethink how it measures unemployment, arguing that when the vast informal sector is considered, the unemployment rate of 32.9% could be closer to 10%.

“We talk about an unemployment rate of 32%, but Statistics SA does not count self-employed people. I think that is an area we must correct. The unemployment rate is probably actually 10%. Just go look at the number of people in the township informal market who sell all sorts of stuff and have a turnover of R1 000 per day.

“To grow South Africa, we must understand what is happening in the informal market. If we really had a 32% unemployment rate, we would have unrest. If you go to the townships, most people have back rooms to rent out; everyone is doing something. If we talk about job creation, let’s go out and encourage these entrepreneurs.”

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