Job losses were disproportionately concentrated among already disadvantaged groups in the labour market. Photo Simphiwe Mbokazi/ African News Agency (ANA)
Job losses were disproportionately concentrated among already disadvantaged groups in the labour market. Photo Simphiwe Mbokazi/ African News Agency (ANA)

Lower earners bear brunt of job losses

By Edward West Time of article published Jul 16, 2020

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CAPE TOWN – Employment fell by 3 million people between February and April, mostly among low-income earners, according to a National Income Dynamic Study Coronavirus Rapid Mobile (Nids-Cram) Survey released yesterday.

Nids-Cram is the only ongoing panel study of labour-market dynamics over time in South Africa.

“We believe the high-level trends evident… are indicative of underlying labour-market dynamics,” the report noted.

The 3 million people represented an 18 percent decline in employment between February and April, the survey showed. The data found 17 million people were employed in February, but only 14 million people were employed in April. 

The survey involved a short, 20-minute telephone survey and so some relevant questions were not asked. This meant, for example, that it was not possible to estimate the change in unemployment rate between February and April; one could only estimate the fraction of the sample who had a job. 

In addition, traditional definitions of employment did not account for the large number of furloughed workers and temporary lay-offs. 

The survey found one in three income earners in February did not earn an income in April. The proportion of adults who earned an income in February declined by 33 percent, which was made up of an about equal share of those who lost their jobs and those who were furloughed. 

Job losses were disproportionately concentrated among already disadvantaged groups in the labour market. 

“Women, manual workers and those at the bottom half of the income distribution suffered disproportionately higher rates of job loss.” 

The job losses were not uniformly distributed among the different groups. In particular, groups who had always been more vulnerable – such as women, African/blacks, youth and less educated individuals – were disproportionately negatively affected. 

The survey found that a larger share of the informal economy, relative to formal employment, were locked out of employment in April. 

For the typical informal worker employed in February and April, the hours worked per week fell by as much as 50 percent. Decreases in working hours were particularly large for women and workers in self-employment, and for informal casual workers.

Women faced a double disadvantage. Of the about 3 million net job losses between February and April, women accounted for 2 million, or two-thirds, even though in February, they accounted for less than half of the workforce.

Of the women employed in February and April, almost half reported working fewer or no hours in April, compared with 42 percent of men. 

Among those groups of people already disadvantaged in the labour market, and who already faced a disproportionate share of job losses from the pandemic, women in these groups faced even further job losses. 

Significant numbers of the newly unemployed were in households with no grants. About 30 percent of those retrenched between February and April reported no household-level grant protection at all. 

The Nids-Cram Wave 1 job losses reflected the “peak” of lockdown and before the roll-out of government relief efforts. 

BUSINESS REPORT

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