’Victims of the increasing unemployment figures are unfortunately women and youth’
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Cape Town - In yet another setback for South Africa’s economic recovery plans, the country has reached its new highest unemployment rate of 32.6% in the first quarter of 2021.
Stats SA published its latest Quarterly Labour Force Survey (QFLS) on Tuesday for the first quarter of 2021, which showed the number of employed people remained almost unchanged at 15 million, a slight decrease of 28 000.
The number of unemployed people increased by 8 000 to 7.2 million compared to the last three months of 2020, while the number of discouraged work-seekers increased by 201 000.
“It should be noted that during Q3 2020, Q4: 2020 and Q1: 2021, the national lockdown regulations were relaxed, which allowed travelling, and this played a role in people actively looking for work, whereas during Q2: 2020 the country was under hard lockdown that prevented movement.”
The official unemployment rate among youth (15-34 years) was 46,3 percent in Quarter 1 2021. The rate was 9,3 percent among university graduates.
The continued rise in discouraged work-seekers, increasing by 6.9 percent, continued to be a concern, said Anchor Capital investment analyst Casey Delport.
“This points to longer-term, structural issues within the South African economy as it is difficult to reincorporate or entice discouraged work seekers back into the labour force. Bear in mind that the expanded definition of unemployment now sits at 43.2 percent. With youth unemployment currently at 63.3 percent, from a societal perspective this is a further cause of great concern.”
Delport said these numbers were indicative of an economy still greatly impacted by the Covid-19 pandemic with many capable workers still inactive.
Senior economist Lisette IJssel de Schepper of Stellenbosch University’s Bureau for Economic Research said the high youth unemployment rate was extremely worrying.
“Linked to this is the issue that unemployment is a structural problem in South Africa and not easily solved. For some perspective, the number of persons that have been unemployed for longer than a year has also reached a new record: 5.4 million. Indeed, three out of four people of all ages that are currently unemployed have been unemployed for more than a year. The longer people remain unemployed, the harder it is to find employment later on.”
She said with formal employment often lagging improvements, the level of employment will likely take much longer to recover to pre-Covid levels than for the level of economic activity to return to pre-Covid levels.
Economist Mike Schussler said the country needed to focus on bringing back certainty for business so it can create jobs.
“We also need to tell people we have to work for ourselves more. Self employment is a road many other emerging market countries go, including most of Africa.”
Cosatu national spokesperson Sizwe Pamla said both the government and the private sector have failed the economy and the country on the implementation of the economic recovery plan.
“The South African economy is 60 percent dependent on consumer spending. The more people are retrenched, the more the economy gets trapped in a vicious cycle. Private sector is employing delaying tactics on buying local and the government is not fixing SOEs and load shedding. We are likely to see the situation get worse and get into an economic depression if there is a change in the policy trajectory and attitude from the government.”
Detawu secretary-general Vusi Ntshangase said the ANC-led government had run out of ideas to fulfil its commitment to resuscitate the economy that can create quality jobs and fight poverty.
“The victims of the increasing unemployment figures are unfortunately women and youth who continue to bear the brunt and are at the receiving end of failed government austerity measures 27 years into our hard-fought democracy."