A factory can double its output after installing automation, boosting its contribution to gross domestic product while cutting its workforce or keeping it flat. This scenario, repeated across industries and countries, reveals a fundamental break in what has long been treated as economic law: the assumption that a growing economy automatically generates jobs.
Economist Jayati Ghosh delivered this stark message after speaking at the University of the Witwatersrand on 28 July, where she addressed the Southern Centre for Inequality Studies’ annual inequality lecture. The relationship between economic growth and employment, she argued, is no longer reliable. “The link between GDP growth and job growth is broken,” Ghosh said in an interview following her address.
South Africa has been offered the same remedy for unemployment for years: expand the economy, and employment will follow. When businesses sell more products, open new branches and increase revenue, they should hire more workers. The logic seemed sound. Yet the data tells a different story. The South African economy grew by 1.1% in 2025, an improvement over the two years prior when growth fell below 1%, but still insufficient to meaningfully reduce unemployment for millions of people.
Government policy continues to rest on this growth-first assumption. President Cyril Ramaphosa centred economic expansion in his February 2026 State of the Nation Address, stating that “a stronger South Africa depends on a growing economy” and that rapid, inclusive growth was essential to create more and better jobs. Minister in the Presidency Khumbudzo Ntshavheni reinforced this position in June, saying the state could not create all the employment South Africa needs but could instead establish conditions for companies to expand and hire.
Ghosh rejects this framework as insufficient. “There has always been this idea that you need a certain level of GDP growth to generate a corresponding level of job growth,” she explained. “But if you look at the data from the past 20 years, that relationship no longer holds. You can have strong GDP growth with little or no job growth, as we have seen in India.” This phenomenon, known as jobless growth, describes economies that produce more value while employment stagnates.
The technological shift reshaping labour markets is not new, but its scope is widening. Manufacturing, once a major employer, now relies on machines to assemble products, computers to monitor production lines, and software to manage administrative tasks. A modern factory creates hundreds of jobs where an older facility might have created thousands. The same displacement is spreading through services. Call centres once provided entry-level employment; now chatbots, automated menus and artificial intelligence handle questions that previously required human workers.
Historically, workers displaced from one sector found opportunities elsewhere. Agricultural employment declined as economies industrialised, but factories expanded. Later, workers transitioned from factories to offices, retail and services. That pathway is narrowing as technology reduces labour demand across multiple industries simultaneously. As Ghosh noted, this does not mean robots will soon collect every payslip, but policymakers cannot assume that new businesses or percentage-point increases in GDP growth will translate into rising employment.
What Ghosh proposes is a fundamental reorientation: governments should treat employment as a policy goal in itself, not as an incidental benefit of growth. This means asking not only “How do we grow the economy?” but also “Which activities can create useful, secure and decently paid work?” The care economy offers one avenue. Nursing, medicine, childcare, community health work, teaching and support for elderly or disabled people cannot easily be automated. A robot may assist a surgeon, but it cannot sit beside an anxious patient and explain what comes next. South Africa faces enormous unmet needs in healthcare, education and social care. Expanding these services could address two challenges simultaneously: unemployment and the shortage of essential public services.
The creative economy, encompassing film, music, design, publishing, gaming, crafts and cultural work, represents another pathway. These sectors employ people with diverse skills while building industries around local languages, stories and talent. For deeper analysis on this disconnect, see https://explain.co.za/2026/08/04/why-economic-growth-does-not-always-create-jobs/
Achieving such a shift requires political pressure. Ghosh is direct: governments do not automatically adopt policies that benefit the largest number of people. Policy emerges from competing interests including businesses, lobbyists, unions and citizens. “There are certain people who influence government policy, and what we need is counter-pressure so that governments are forced to listen,” she said. “Governments are not good by nature. We have to force them to become good.”
South Africans have already used electoral power to demand change. The 2024 national elections cost the African National Congress its parliamentary majority for the first time since 1994, forcing it to govern with other parties. Yet changing political arithmetic does not immediately repair broken municipalities, improve policing or create millions of jobs.
Ghosh’s core message is clear: South Africa should stop waiting for employment to emerge from a larger GDP. Growth matters, but what grows, how it grows and who benefits matter equally. A country can produce more money without producing enough jobs. For millions of unemployed South Africans, that distinction is not an abstract economic debate. It is the difference between growth on a spreadsheet and a salary in a bank account.