Very few work seekers will find jobs

When Statistics SA revealed its Quarterly Labour Power Survey (QLFS) for the primary quarter of 2021, it famous that the unemployment charge had elevated to the very best stage because it began conducting the survey in 2008.

Learn: Unemployment: No light at the end of the tunnel (June 2021)

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When the statisticians introduced the outcomes of the survey for the second quarter of 2021 on Tuesday (August 24), the figures confirmed that this quarter was even worse and unemployment set a brand new report.

“The official unemployment charge elevated by 1.8 share factors from 32.6% within the first quarter of 2021 to 34.4% within the second quarter of 2021 – the very best for the reason that begin of the QLFS in 2008,” in line with the report. “The unemployment charge in line with the expanded definition of unemployment elevated to 44.4%.”

The severity of the issue

Sadly, even the very excessive unemployment charge hides the severity of the unemployment downside in SA. A glance of the gross numbers paints a good worse image than the Stats SA report admits to.

The whole variety of individuals of working age (outlined as individuals aged 15 to 64) elevated by an inexpensive 1.5% over the previous yr, from round 39 million to some 39.5 million, in line with the survey.

Nevertheless, there was an enormous improve within the variety of contributors within the labour market. The energetic labour power elevated by greater than 4.3 million individuals to 22.2 million in contrast with 18.4 million a yr in the past.

Thus, the variety of individuals accessible to do work and who ought to arguably work, elevated by greater than 4.3 million in simply 12 months. In distinction, Stats SA discovered that the economic system might solely create 793 000 new jobs in that point.

“The variety of unemployed individuals elevated by 82% [3.5 million], whereas the variety of individuals who weren’t economically energetic decreased by 18.2% or 3.7 million,” famous Stats SA.

This huge improve within the variety of new entrants to the labour market had Stats SA looking for causes.

The report notes that particular tabulations have been finished to check actions between labour market classes. “It was noticed that numerous individuals moved from the ’employed’ standing and ‘not economically energetic’ to ‘unemployed’ classes between the 2 quarters.”


In actuality which means that individuals misplaced their jobs, whereas others who beforehand didn’t need to work needed to begin on the lookout for jobs to make ends meet throughout the latest troublesome financial circumstances.

Johannes Khosa, specialist economist at Nedbank Group, says that the latest unemployment figures are one other indication of the influence the Covid-19 lockdown has had on the economic system.

“Firms remained hesitant to rent extra individuals and, in worse conditions, they even laid off extra staff,” says Khosa.

“Consequently, throughout the quarter extra jobs have been misplaced.”

Affect by sector

Khosa factors out that the formal sector shed 375 000 jobs throughout the quarter to June. Employment within the formal sector fell from simply lower than 15 million jobs to fewer than 14.15 million.

The worst hit was the monetary sector, for many years the sector that created many new jobs and good careers for staff of nearly any talent stage.

Quarter-to-quarter and year-on-year adjustments within the formal sector by business

Supply: Stats SA

Stats SA famous that employment positive factors have been noticed in just a few sectors throughout the latest quarter in contrast with the earlier.

The casual sector created 184 000 new jobs, the agricultural sector 69 000 and personal households 67 000.

Nevertheless, one can argue that the massive improve in employment within the casual sector is being pushed extra by necessity than anything.

Shedding battle

An evaluation of the long-term information equipped as an addendum to the QLFS report reinforces the view that SA is dropping the battle in opposition to unemployment.

The labour power survey – primarily based on surveying households in SA versus the Quarterly Employment Survey (QES), which polls registered firms – exhibits that the numbers of unemployed have been growing steadily yr after yr for the reason that begin of the dataset in 2008.

Inhabitants, labour power, employed individuals and unemployed individuals

Supply: Stats SA historic information

The inhabitants has been rising steadily. Though information from a number of sources present that SA’s inhabitants progress is slowing, the labour power is rising quicker because of the particular demographics of SA’s slightly younger inhabitants.

Actually a whole bunch of 1000’s of younger women and men end college, college and different tertiary schooling establishments yearly and enter the labour power.

It’s instantly noticeable from the graph that the rise in employment lags the expansion within the labour power. The numbers of the unemployed proceed to extend.

The rise within the unemployment charge tells solely a part of the story

Stats SA notes that one motive for the latest improve within the unemployment charge is a rise in labour power participation charge.

In brief, the quantity of people that wish to work is growing.

Evaluating the variety of employed individuals to the inhabitants of individuals of working age provides a tough indication of the whole image. Expressed as a share, it exhibits that the employment of all people who might work fell from 46% in 2008 to beneath 38% in 2021 – regardless of the motive for not working.

Employment as a share of the working age inhabitants

Supply: Calculation primarily based on Stats SA information

A pointy decline on this ‘total’ employment is clear after the 2008 monetary disaster. Equally noticeable is that this was adopted by solely a partial restoration. Then Covid-19 hit. Arduous.


The long run doesn’t require sun shades. As Khosa says, the outlook for the job market stays poor.

“Subdued financial situations imply it can take lengthy to restore the harm attributable to the lockdowns of the economic system.” he says.

“A rise in job creation will not be going to occur within the brief time period. Firms are nonetheless hesitant to increase operations.”

Khosa provides that the long-term prospects usually are not that good both.

He mentions that continued energy shortages and uncertainty on the subject of authorities coverage will proceed to influence on enterprise confidence, financial progress and employment.

Learn: Will SA ever be able to solve its unemployment problem?

One other issue that can maintain the unemployment charge excessive over the long run is that discouraged work-seekers are certain to re-enter the labour market and begin on the lookout for jobs as soon as the economic system begins to recuperate.

Stats SA says there are presently greater than 3.3 million discouraged work seekers on the market.

Damaging influence of Covid and lockdowns

NWU Enterprise Faculty economist professor Raymond Parsons says the brand new report excessive of 34.4% within the SA unemployment charge confirms the damaging influence the Delta variant and accompanying lockdown restrictions have had on the economic system and the labour market.

“The outlook for the job market stays weak, as it’s clear the total influence on financial exercise of the civil unrest in late July will solely turn into obvious within the third quarter of 2021. The whole financial prices of the latest violence and civil unrest haven’t but totally emerged.

“In these adverse circumstances unemployment is now certainly the ‘cruellest tax’ on weak sectors of the inhabitants and job creation continues to demand high precedence,” says Parsons.

“There’s, nevertheless, no ‘fast repair’. Given the present uncertainties within the financial outlook, the speedy total job scenario is due to this fact more likely to worsen earlier than it will get higher.”

Parsons provides that the newest unemployment figures ship a message that the steadiness between lives and livelihoods in dealing with the pandemic stays an acute dilemma “which must be rigorously managed” in future.

The provision of labour needs to be a boon for any economic system.

Sadly, it appears to be solely an issue for SA.

Hearken to Ryk van Niekerk’s interview with UIF spokesperson Makhosonke Buthelezi (or learn the transcript here):

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