The return of skilled South African from abroad has been a boon to the economy
SA may have made it difficult for firms to hire skilled foreigners. It has not done much, fortunately for the sake of the economy, to inhibit the flow of skilled South Africans back home. It should be doing all it can to encourage the diaspora to come back home.
The numbers of returning South Africans reversing the brain drain has been very impressive. I have been given an estimate of the number of returning professionals and managers by employment placement firm Adcorp, which is in a good position to know the details. The number Adcorp estimates is a very impressive 370 000 skilled migrants who have returned to SA since 2009. In recent years the SA economy has managed to do without attracting skilled foreigners in magnitude by absorbing large numbers of its own. Some sense of the importance of these returnees for the economy will be indicated below.
As may be seen in the figure below, the average real wage at which Adcorp was able to place young professionals or managers doubled through the SA economy boom years between 2003 and 2008, from R150 000 a year in 2003 to R350 000 in 2009. To convert these salaries to 2013 money, multiply by about 1.3 times. In recent years these real salaries at which Adcorp has been able to place clients has declined significantly. Clearly South African firms hiring skilled labour could have benefitted from access to immigrant skills before 2009 – just as they have benefitted from migrant skilled labour since.
Putting SA skilled migration trends in context
To give a better idea of the importance of 370 000 skilled entrants to the SA labour market we can refer to data supplied by SARS in its recently issued 2013 Tax Statistics, that can be found on the national Treasury web site. SARS reports 15 418 920 individuals as registered for PAYE. Not all potential income taxpayers earn enough to have to pay income tax (more than R60 000 a year in 2012). These numbers of registered taxpayers has increased dramatically in recent years as firms were forced to include all workers in their tax filings from 2011.
Of the 15.4m registered workers, some 5.1m actually paid income tax. 3.2m of these taxpayers earned a taxable income of more than R120 000 – perhaps qualifying them as skilled. These 370 000 returning migrants therefore represent more than 10% of the skilled labour force.
Who pays the tax – and some dissonance
It is of interest to note that 338 724 taxpayers reported taxable income of more than R500 000 in 2012. Of these, 73 250 taxpayers enjoyed taxable income of more than R1m in 2012, of whom 16 952 earned between R2m and R5m; while a mere 2 787 taxpayers reported taxable income of more than R5m.
What makes these statistics especially interesting is that the 15.4m taxpayers registered with SARS compare favourably with the employment numbers recorded by Stats SA in its Quarterly Labour Force Survey that records employment and unemployment from a survey of households. Stats SA reports a labour force of 18m of whom 10m only are estimated as formally employed.
Such grave dissonance between the numbers of employees recorded by SARS and by Stats SA needs to be urgently resolved if we are to say anything useful about the SA labour market and the impact of immigration and migration on it and design policies accordingly.