With the highest unemployment rate in the world, efforts to reverse the impact of Covid-19 on the country’s economy and employment will continue to be an uphill battle, unless there is a focus on government policy implementation.
With the highest unemployment rate in the world, efforts to reverse the impact of Covid-19 on the country’s economy and employment will continue to be an uphill battle, unless there is a focus on government policy implementation.

South African women bear the brunt of unemployment

By Lisa Isaacs Time of article published Aug 25, 2021

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Cape Town - With the highest unemployment rate in the world, efforts to reverse the impact of Covid-19 on the country’s economy and employment will continue to be an uphill battle, unless there is a focus on government policy implementation.

This was the reaction of unions, experts, and civil society, following the announcement by Statistics South Africa (Stats SA) that the number of unemployed persons increased by 584 000, to 7.8 million, compared to the first quarter of 2021.

The results of the Quarterly Labour Force Survey (QLFS), for the second quarter of 2021, show that the number of employed persons decreased by 54 000 in the second quarter of 2021, to 14.9 million.

These changes resulted in the official unemployment rate increasing by 1.8%, from 32.6% in the first quarter of 2021 to 34.4% in the second quarter of 2021 – the highest since the start of the QLFS in 2008.

At 25.8%, the Western Cape has the lowest unemployment rate in the country.

The results also indicate that the South African labour market is more favourable to men than it is to women – the rate of unemployment among women was 36.8% compared to 32.4% among men, with men more likely to be in paid employment than women, regardless of race.

UWC Department of Economics Professor Matthew Ocran said the results were not surprising.

“The R500bn relief from the government was poorly structured and administered. The R200bn Covid-19 Loan Guarantee Scheme, which was part of the R500bn relief from the government, earmarked for businesses, saw very low disbursement rates. Therefore, businesses had no meaningful support to absorb the shocks from the impact of the pandemic and the associated lockdowns. It is, therefore, not surprising that the unemployment rate is soaring,” Ocran said.

More importantly, the economy was already weak – even before the pandemic, he said.

“Until the much-talked-about structural reforms are tackled with all seriousness, the capacity of the economy to grow would be constrained. And unless the constraints are removed, there can be no meaningful growth,” said Orcan.

The statistics showed formal sector employment decreased by 375 000, while informal sector employment increased by 184 000.

Prof Dieter von Fintel, of the Department of Economics at Stellenbosch University, said people are considered unemployed if they have been looking for work in the last four weeks.

“This group has expanded rapidly to grow unemployment to record highs: these are likely people who lost jobs during the hard lockdown, temporarily stopped looking for jobs and ‘sitting it out’ in the bad economic climate, and are now – out of necessity brought on by the toll of lockdowns – looking for work in large numbers, despite the poor prospects for finding such work. There are too few new jobs for these job-seekers. Many of them are in the 15-24 age group.

“What we are seeing is very similar to earlier economic downturns in the past. Employers follow a ’wait-and-see’ approach before they understand the risks of the new economic climate and, therefore hold back on creating new work opportunities,” he said.

“While unrest has contributed to this situation, the fact that unemployment has grown across the country suggests that that was not the only factor, rather, the pandemic has had the more significant impact, and this poses risks for further social and political stability,” Von Fintel said.

Chief economist at the Steel and Engineering Industries Federation of Southern African (SEIFSA) Chifipa Mhango said the government needed to urgently focus on job creation efforts, as it tries to revive the economy.

“Key to addressing this challenge will be the speedy implementation of government economic policies to address the bottlenecks in the economy, with an investment drive to key sectors of the economy, such as manufacturing,” Mhango said.

The Federation of Unions of South Africa (Fedusa) said the figures were a strong indicator of socio-economic disparities between men and women.

“One of the biggest drivers of inequality between women and men in South Africa is inequitable access to education and training opportunities,” said Fedusa.

The data confirms that women constitute the majority of the poor, the unemployed, and the dispossessed, said Colleen Morna, of Gender Links.

“The Covid-19 pandemic is salt to this wound. South Africa is one of the only countries in the world in which women constitute the majority of those infected by Covid-19, as well as dying as a result of Covid-19. They are the majority of those infected but also, crucially, of those affected,” said Morna.

Cosatu spokesperson Sizwe Pamla said: “This is very alarming considering that more than 50% of people in the working-age population are officially unemployed. It is also calamitous for the country because it means millions of workers will be dependent on the state for their well-being and that of their families. These unemployment numbers are an outcome of the policy choices by the policymakers and, in this regard, the influence of the National Treasury.”

He said the unemployment numbers reflect not just the devastating impact of Covid-19, but also of the government’s “misguided austerity strategy that is geared towards containing public-debt and reducing budget deficit, instead of achieving structural economic transformation through diversifying and building the productive capacity of the economy”.

“It is deeply troubling that, in the face of such devastating unemployment statistics, the newly-appointed Minister of Finance Enoch Godongwana has been quoted as saying that there is no plan to change the country’s macroeconomic framework. These depressing figures provide proof that there is no real commitment to accelerating shared economic growth, and transforming the structures of production and ownership by government,” he said.

Cape Times

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