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Results from the Third Quarter Labor Force Survey (QLFS) published by Stats SA put South Africa’s unemployment rate at 30.8% – 43.1% in the expanded definition, which includes discouraged job seekers who have stopped looking for work.
This is the highest on record since 2008, the Race Relations Institute noted in a research note on Friday (November 13).
Put another way, the figures show that only 51.5% of South Africans between 35 and 64 have a job, and only 57% between 15 and 34 are employed or in education or training, the IRR said.
Only two in five South Africans between the ages of 25 and 34 are employed.
“Years of policy failure, compounded by lockdown restrictions in recent months, have left South Africa facing a steadily increasing humanitarian crisis of unemployment,” TIR said.
He said that while the blockade imposed to curb the spread of Covid-19 earlier this year hit the economy hard at a cost of millions of jobs, unemployment in the country has risen steadily since 2009.
In that year, 1.7 million people were classified as “new entrants”: people who were unemployed during the reference period and had never worked before. A decade later, there were 2.5 million in this category.
In 2009, the number of people who were declared unemployed because of losing a job (because they were laid off or because a business was sold or closed) was 1.5 million.
By 2019, this number had risen to more than two million.
Overall, unemployment has risen from 4.3 million in the third quarter of 2009 to 6.5 million, the IRR said.
Slower recovery
Peter Attard Montalto, Director of Capital Markets Research at Intellidex, noted that while the official unemployment rate recovered as expected, the overall stress is still there looking through adjusted data. Unemployment (adjusted) is still 1.85 million higher than in the first quarter, he said.
The analyst said the unemployment data is important in tracking the underlying nature of the recovery and the stresses in the economy. He said a jump back of 543,000 in employment was 3.8% quarter-over-quarter after a 2.23 million drop in the second quarter.
“This was slightly less than expected, perhaps indicating at this early stage the lower work intensity of the recovery,” Attard Montalto said.
When including formally discouraged workers included, an adjusted total of unemployed rose to 10.0 million in the first quarter, from 9.6 million in the last quarter of last year, rose to 12.3 million in the second quarter, and fell to 11.8 million in the analyzed quarter.
This gives the real feel of the underlying unemployment problem in South Africa, Intellidex said.
The broad definition of unemployment went from 37.9% in the first quarter to 46.5% in the second, and then dropped slightly to 44.6%.
Overall, according to this broad and narrow definition, this crisis has caused the loss of 2.3 million jobs in the second quarter compared to the first, and now 1.8 million have been lost in the third quarter compared to the first. Attard Montalto said.
This, the analyst said, is roughly around expectations, “and we expect it to fall to about 1.5 million at the end of the year“.
A new approach is needed
Almost three out of four South Africans (74.1%) aged 15-24 who were available for work were unemployed, and half of those aged 25-34 were unemployed, said Lullu Krugel, chief economist at PwC Strategy &; Africa, and PwC economist Dr. Christie Viljoen.
“From any point of view, these are stark numbers and explain in part why, in September 2020, South Africa experienced the most politically related protest events since the appointment of President Cyril Ramaphosa in early 2018,” said PwC.
At the industrial level, eight of the main sectors followed by Stats SA recovered jobs during the third quarter, with utilities (water and electricity) and transportation being the only areas where employment continued to fall after the losses observed in the second. trimester.
At the same time, many South Africans continued to receive lower pay compared to the pre-pandemic period.
Data from Stats SA indicates that one in five workers with education up to and including enrollment received a reduced salary during the third quarter.
PwC expects to regain 250,000 additional jobs in the fourth quarter. Many of these will be seen in the tourism and hospitality sectors, he said.
President Ramaphosa said earlier this week that the government is “working to allow all parts of the economy to return to full operation as soon as possible.”
and in the safest way possible ”. This includes the reopening of international travel to all countries, subject to the necessary health protocols.
South Africans are also increasingly traveling to local destinations: Income earned from hotel accommodation increased from R177 million in July to R365 in August, with the latest number being around 10 times higher compared to May, PwC said.
Despite this expected increase in jobs during the fourth quarter, it still implies a net loss of 1.4 million job opportunities at the end of the yearSaid PwC. “This will compound the existing challenges seen before the pandemic in creating sufficient value-added jobs in South Africa.
PwC recently commented that South Africa’s key challenges, unemployment and inequality, have now become considerably more severe through
pandemic and can no longer be addressed in the traditional way. “A whole new approach is needed from the government to solve this problem,” Krugel said.
Other projections
Nedbank forecasts that around 500,000 jobs will be lost in South Africa this year, with the country’s labor market only reaching its pre-crisis peak in the second half of 2023.
In July, a team of South African researchers released the National Income Dynamics Coronavirus Rapid Mobile Survey (NIDS-CRAM), which looks at the economic impact of the coronavirus pandemic and the lockdown across the country.
The study surveyed 7,000 South Africans and may be considered the most nationally representative survey currently in existence, the researchers said.
The key finding was that approximately three million people lost their jobs during the lockdown period, representing an 18% decrease in employment from 17 million people employed in February to 14 million people employed in April 2020.
Taking into account a 95% confidence interval, the decrease in the number of people employed from February to April was likely between 2.5 million and 3.6 million, the researchers said.
Read: This is what the average public worker in South Africa gets paid
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