M.A. (Economics) / Unemployment is a familiar affliction of our age, but its nature, causes and cures remain matters of dispute. As with many familiar things, closer examination leads to deepening mystery. Its pathology is complex, with social as well as economic ramifications" (Routh, 1986: 1). In the world of today which is characterised by globalization, the unemployment problem has become a worldwide problem. It is endemic in both developed and developing countries. But for developing countries, this problem brings more challenges(like increased poverty) and complications (like political and social instability). South Africa is certainly no exception. In South Africa, this problem is succinctly expressed by Barker (1992: 71): "Unemployment is probably the most severe problem South African society is experiencing and it is conceivably the root cause of many other problems, such as high crime rates, violence, abject poverty.... Prominent leaders in and outside government have also stated that no government will be able to govern South Africa ...if this problem is not addressed effectively". According to Hall (1997: 396), one of the overlooked aspects of the unemployment crisis in South Africa is the spatial distribution of unemployment within cities. Apartheid urban planning concentrated the black population in peripheral residential areas, where the majority of the unemployed population is found. In Gauteng, for example, unemployment rates (using the 1991 census) vary between zero percent in former white suburbs and above thirty percent mainly in the former black townships. In addition to the apartheid urban landscape the recent trend of suburbanisation of economic activity, the decline in central business districts and the continued lack of development in former black residential areas may intensify the problem of unemployment. The long-term effects of these processes are far reaching, that is, they may result in profound labour market segmentation which may, in turn, negatively impact on urban development strategies aimed at reintegrating South Africa's cities and addressing the problems of poverty, unemployment, urbanisation and housing. With the establishment of democracy in 1994, many South African unemployed people became hopeful that there was going to be employment for everyone. This was further reinforced by the adoption of the Reconstruction and Development Programme (RDP), and the promises made by the developed Western countries to assist South Africa in its development endeavours. In 1996, South Africa opted for a neo-liberal approach (which advocates for less government involvement in the economic activity) to economic development by adopting the Growth, Employment and Redistribution (GEAR) policy - which is a supply-side policy. The GEAR strategy calls for a minimalist state, restructuring of the economy like the elimination of export subsidies and the reduction of import tariffs to improve the competitiveness of South African industries in the global arena. In fact, to the contrary, at this stage, GEAR has not helped to stop the increasing tide of unemployment and retrenchments as industries are concerned with cutting costs(of which, labour costs are often the highest) to meet global competition. The cliche "lean is mean" has become crucial in business decisions. The implication of this is that more people have been put out of work. The unemployment level in South Africa has reached endemic proportions. The problem is getting more complicated by the prospects of the closure of marginal gold mines due to the possibility of a weaker gold price and increasing costs.