Jobs crash jolt:
If anyone needs to understand the Herculean task facing President Cyril Rampahosa, simply give Stats SA s quarterly labour ’ force survey report a glance and there you have it: more than 2.2-million jobs lost in the second quarter.
This was not unexpected, as they were wiped out when SA was under one the world s toughest lockdowns, banning alcohol
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and tobacco sales, and restricting e-commerce companies to selling essential items only. The job losses have, in all likelihood, given SA another unwanted record, the world s highest unem
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ployment rate of roughly one-third of the population.
As alluded to by the statistician-general at Stats SA, Risenga Maluleke, the official unemployment rate in the second quarter at just more than 23% is deceptive.
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The sharp drop from 30.1% in the first quarter was due to people being unable to leave their homes during the lockdown to look for jobs, as required in the official definition of the unemployment rate, and so being classified as economically inactive.
As a result, the number of those not actively looking for work, which typically includes discouraged work-seekers, students, homemakers and those who are too sick to work, rose by more than a third to 20.6-million bringing the expanded unemploy
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ment rate to a scary 42%. That is probably more reflective of the country s crisis than an unemployment rate at multiyear lows.
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Clearly, there is nothing to celebrate in Maluleke s figures,
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which came in the same month that he issued another report, which showed a horrifying 51% contraction in seasonally adjusted and annualised second-quarter GDP, extending a recession that started even before Covid-19 hit SA.
If anything, it is another piece of data that should instill a sense of urgency for Ramaphosa to make public and implement a plan he has been working on with labour and business to put the economy back on a growth path. It has been months since the president started talking about processes that still need to unfold before the economic recovery plan can be announced.
Best known for consensusbuilding skills honed in wage negotiations with mining bosses and later as one of the lead ANC negotiators in the 1990s to end apartheid, Ramaphosa has been stuck in a lengthy consultative process at the National Economic Development and Labour Council to craft something that business, government and labour can all live with. This process has been under way for about three months.
But SA does not have time to spare. Each week that passes brings with it the growing threat of permanent damage: the loss of businesses; the loss of employment; and the continuing drain on business and investor confidence.
Almost every day since late March, companies have been putting out earnings reports that underscore a wave of distress that has left many with no choice but to retrench workers and cut capital expenditure in anticipation of weak demand.
Economists at PwC are not optimistic about the labour outlook, saying even though some of the second-quarter job losses will be reversed as the economy opens up in the various stages of lockdown easing, SA will still end 2020 with 1.5-million jobs lost. But it is the PwC statement s listing of the potential conse
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quences of failing to act now to put millions of South Africans into jobs that should make all of us uncomfortable. Worryingly, government inaction is not limited to issues that require social com
“pacting ”. Players in tourism, one of the biggest employers in the economy before Covid-19, still have no idea who will be allowed to travel here, although the borders are due to open on Thursday.
If it is unsuccessful in tackling unemployment issues, PwC warns, SA could face increasing social unrest. This has already been manifesting September is on track to record the most
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protests since Ramaphosa took over early in 2018.
We do not need prolonged talks to work out what our economy needs to return to a robust growth path. We need action.
THE DATA SHOULD INSTILL A SENSE OF URGENCY FOR RAMAPHOSA TO MAKE PUBLIC HIS RECOVERY PLAN