Jobs bloodbath: unemployment rate now highest since 2008

[STORY LABEL]

While South Africans were optimistic that the economy was starting to recover during the fourth quarter of 2020, the new unemployment figures from Stats SA show differently, with another 701 000 people losing their jobs.

A total of 11.1 million people are now unemployed.

A total of 1.397 million people lost their jobs in 2020, with the unemployment rate now at 32.5%, compared to 30.8% in the third quarter. Compared to a year ago, the number of unemployed people increased by 7.5% (507 000), while the number of people who were not economically active increased by 9.5% (1.5 million).

Prof Jannie Rossouw from the Wits Business School said it was worrying that the unemployment rate was still increasing, because this meant that there would be more people unable to pay tax.

“Government will have to be very careful not to overestimate its income from tax. It is also concerning that growth is not keeping up with the population growth of 1.5%. The only thing that can save us is to make it easier to employ people,” he said.

The number of work seekers increased by 235 000 (8.7%) and the number of people who were not economically active for other reasons decreased by 1.1 million (7.4%) between the two quarters, resulting in a net decrease of 890 000 in the economically inactive population.

Stats SA said this movement was proportionately more towards the unemployed than the employed, which resulted in a significant increase of 1.7 percentage points in the official unemployment rate, with the unemployment rate according to the expanded definition of unemployment decreasing by only 0.5 of a percentage point to 42.6% in the fourth quarter compared to the third.

The working-age population increased by 143 000 (0.4%) quarter-on-quarter and, compared to the fourth quarter of 2019, by 583 000 or 1.5%. The number of employed people only increased by 333 000 to 15 million in the fourth quarter last year.

Employment increased in these sectors:

The largest employment increases were in the formal sector (189 000), followed by private households (76 000), the informal sector (65 000) and the agricultural sector (2 000). The number of employed people increased in eight of the 10 industries surveyed.

The largest increase was in community and social services (170 000), followed by construction (86 000) and private households (76 000). The only decreases were recorded in finance (123 000) and mining (35 000).

There was a decrease in employment in these sectors:

There was a decrease of 1.4 million in total employment yearon-year, with 256 000 people in the financial industry losing their jobs, 241 000 in community and social services, 230 000 in manufacturing, 186 000 in trade and 184 000 in construction.

Employment in the informal sector stood at 176 000 in the third quarter.