Economist queries job-loss statistics

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Published May 18, 2016

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Johannesburg - The figures in last week’s employment statistics which reflect a jobs bloodbath seem to be exaggerated, according to labour economist Neva Makgetla.

Makgetla, the programme manager at Trade and Industrial Policy Strategies, said the figures in the Quarterly Labour Force Survey seemed unreliable, in part due to the new shift to a new master sample.

Statistics SA reported the country lost 355 000 jobs from the last quarter of 2015 to the first quarter of 2016, an astonishing 2.2 percent employment decline in a single quarter.

The official unemployment rate rose to 26.7 percent in the first quarter. This is the highest since the start of the new series in 2008, up from 24.5 percent in the last quarter of 2015.

Both the formal and non-informal non-agricultural sectors of the economy recorded employment drops over the quarter, with 217 000 and 110 000 jobs lost in the two sectors respectively.

This was, with the exception of community and social services, a proxy for the government, which added 51 000 jobs.

Elections

FNB said it suspected the rise in jobs in the sector could partly be to jobs created by the Independent Electoral Commission ahead of the local government elections.

“There usually is an increase in employment by national government towards the end of the fiscal year, and an increase in temporary workers in higher education at the beginning of each school year,” said FNB.

Makgetla said in her new policy brief The job bloodbath that wasn’t: What happened to employment in the first quarter of 2016?, which was released on Monday: “The data likely reflect an effective correction to overestimates of job creation in the previous four quarters, rather than a sharp contraction in the real world.

“Year-on-year employment reportedly rose by 204 000 or 1.3 percent, which is essentially in line with previous years and with the expected gross domestic product growth.”

She said the only time since 2008 where more jobs were reported lost in a single quarter was in the third quarter of 2009, when the economy expanded by just 0.23 percent, following three quarters of decline during the global financial crisis – the worse economic downturn since the Great Depression.

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