South Africa exhibits one of the highest unemployment rates in the world. The unemployment rate has remained high and persistent over recent decades, in spite of the formal demise of the apartheid regime and subsequent transition to democracy in 1994. This paper uses a matching model of the labor market to argue that spatial considerations may be responsible for such an outcome. Spatial dispersion inherited from the apartheid regime thins the labor market, creating exclusion and perpetuating spatial desegregation. Transportation costs and housing deregulation may become key factors in improving the working of the labor market and eventually undoing the persistent legacy of Apartheid.