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Increasing job losses and the overall negative impact on the economy of the national lockdown has seen South Africa’s expanded unemployment rate accelerate to 42% by the second quarter of 2020.
The results of the latest quarterly labor force survey for the second quarter of 2020 show that 2.2 million jobs were eliminated in the country during this period.
One of the groups most hidden by the lockdown is domestic workers, with 259,000 who lost their jobs during the period, a 25.1% year-on-year decrease.
This means that the number of active domestic workers in the county has dropped from just over a million in early 2020 to 745,000 at the end of June.
Industry insiders believe these latest figures are likely to lead to increased job insecurity within informal sectors, including domestic workers who are particularly struggling as they face markedly fewer wage opportunities than during pre-shutdown conditions.
Earlier this month, Stats SA also revealed that GDP fell just over 16.4% between the first quarter and the second quarter of 2020, resulting in an annualized growth rate of -51%.
In a recently broadcast interview, former statistician general Pali Lehohla said the government must find a sustainable way to tackle South Africa’s unemployment crisis.
“If you look at the State of the Nation Address at the beginning of the year, the president said that 200,000 jobs will be created per year. That gives you only 2 million jobs in 10 years.
“Now, at the time of the coronavirus, the question is: what is the promise and what is the basis of that promise? What is the evidence around that promise and what is the roadmap for executing on that promise? “Lehohla said.
Similar concerns are also being raised in the private sector, as well as fears over rising levels of poverty and the limited means of low-income workers to support themselves.
“There is no denying the need for a rapid and focused front-line response to limit the spread of the virus and help those affected and impacted. But we cannot afford to lose sight of the reality that poverty is a pandemic in itself that will exist long after Covid-19 is eradicated, “said Neil Robinson, CEO of the 100% non-profit social company Relate .
“From the beginning of the lockdown, we have seen people, in many cases those who support the family, lose their only sources of income or have their wages cut by employers who are also trying to survive.
“A large component of South Africa’s population was already living in dire circumstances before the onset of the pandemic, and that situation has significantly worsened, leaving us with an even greater burden in the future.
The SweepSouth Report on Wage and Working Conditions for Domestic Work in South Africa shows that “underemployment” among domestic workers peaked during the shutdown.
A total of 80% of those surveyed reported working less than eight hours per day, and 74% earned less than R2,500 per month, a significant increase from the pre-closing figure of 37%. The report attributes this to belt tightening in middle-class households, offering fewer hours and / or job opportunities for domestic workers to increase affordability.
Commenting on the latest national unemployment figures, SweepSouth Co-Founder and CEO Aisha Pandor said: “Sadly, these statistics are not surprising given the economic recession South Africa is facing.
“Although these figures represent unemployment in the formal sector, they indicate a decline in disposable income among economically active South Africans, which will undoubtedly have a detrimental effect on the informal sector.”
SweepSouth’s annual survey, he added, has highlighted the severe financial difficulties most domestic workers find themselves in as a result of Covid-19 and related lockdowns. “Many domestic workers are the only providers for their families.
“The rise in the unemployment rate in the formal sectors will trickle down quickly and push South African residents more vulnerable into poverty,” said Pandor.
SweepSouth’s annual survey found that workers with five financial dependents increased from 12% in 2019 to 17% this year, while those with six or more dependents increased from 14% to 20%.
Drop in earnings, worsening debt
The reported decline in domestic workers’ incomes is also likely to have a ripple effect on pre-existing debt among South Africans, as an increasing number of households are forced to cut spending while facing debt growing.
The SweepSouth report indicates that low-income households are forced to borrow more when they cannot cut spending any further. It concludes that 70% of the domestic workers surveyed are in debt, which provides incontrovertible evidence of the plight of domestic workers in the country.
Almost all respondents (90%) also said they were the main breadwinner in the family (compared to 80%), while 73% said they were single parents.
“Our survey shows that the vast majority of respondents are desperate to return to work so that they can earn a steady living and be able to feed themselves and their families, as well as cover their living costs at the most basic level.
“However, if potential employers become increasingly scarce and existing employers are forced to cut costs, we could see a worsening of the economic crisis among low-income employees in the very near future,” Pandor said.
Read: Here’s how many domestic workers lost their jobs during the shutdown
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