South Africa reached its highest unemployment rate in 12 years as joblessness surged to 6.5 million during the third quarter. Photo: Independent Media Archives
South Africa reached its highest unemployment rate in 12 years as joblessness surged to 6.5 million during the third quarter. Photo: Independent Media Archives

Highest number of SA jobless in 12 years

By Dineo Faku Time of article published Nov 13, 2020

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JOHANNESBURG – South Africa reached its highest unemployment rate in 12 years as joblessness surged to 6.5 million during the third quarter.

Statistics SA (StatsSA) said its Quarterly Labour Force Survey (QLFS) showed unemployment jumped to 30.8 percent from 23.3 percent in the second quarter as more people joined the queue of those seeking jobs.

StatsSA said the number of unemployed people increased by 2.2 million to 6.5m when many could not be classified as unemployed as they were not looking for a job because of Covid-19 restrictions.

The agency said those discouraged had exited the labour force.

PricewaterhouseCooper’s Strategy & Africa’s chief economist Lullu Krugel said the figures showed that the expanded definition of unemployment measured at 43.1 percent compared to 42 percent in the second quarter.

“Nearly three out of four South Africans, 74.1 percent to be precise, aged 15 to 24 who were available to work were unemployed, with half of those aged 25 to 34 being without a job. By any measure these are stark numbers and partly explains why, in September 2020, South Africa experienced the most politically related protest events since the appointment of President Cyril Ramaphosa in early 2018,” said Krugel.

StatsSA said the movement of persons was proportionately more for the unemployed than for the employed, which resulted in a significant increase of 7.5 percentage points in the unemployment rate to 30.8 percent.

“This is the highest unemployment rate recorded since the start of the QLFS in 2008,” said StatsSA.

However, employment increased by 543 000 in the third quarter, but was down 1.7 million on a year-on-year basis. StatsSA said almost 9 in every 10 employed graduates continued to receive full salaries in the third quarter, compared to 79.3 percent of those with less than matric as their highest level of education.

On a positive note, the survey said all industries in the formal sector employment, except for utilities and transport, had recorded employment gains. The Nedbank Group Economic Unit said the unemployment rate was likely to stay at current levels for some time as South African unemployment was structurally "sticky" above the 25 percent mark.

Nedbank said the figures showed the solution was a concerted push to fix the country's structural challenges regarding skills as well as other policy issues.

It said this would be a long-term endeavour.

“Hence our belief that unemployment will remain sticky at high levels over the medium term,” said the Nedbank Economic Unit.

Anchor Capital investment analyst Casey Delport said the number of discouraged work-seekers increased 9.1 percent to 225 000.

Delport said the number of people who were not economically active for reasons other than discouragement decreased by 2.9 million or 15.8 percent between the two quarters.

“Simply put, of the 2.85 million people who ‘left’ the country's workforce during the lockdown, only 543 000 managed to get their jobs back, leaving 2.2 million unemployed, and 225 000 joining the group of discouraged work-seekers. Thus, despite the easing of lockdown regulations in the third quarter, the record level of job losses experienced in the second quarter is still very much a persistent factor in the South African economy,” said Delport.

Investec economist Lara Hodes said unemployment surged due to stringent lockdown measures imposed in the second quarter.

Hodes said the quarter was characterised by strict curfews and travel restrictions and a large number of people were prohibited from seeking work. “This, in turn, boosted the number of individuals who were not economically active, and so not deemed to be in the labour force,” Hodes said.

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