Job crisis hits new low

2021: IMPROVEMENT EXPECTED AS ECONOMY OPENS

‘We may only go back to rates of December 2019 in four to five years.’

It seems the worst of the unemployment crisis hit South Africa during the third quarter of the year and job growth is expected as more sectors of the economy start to open, says Professor Jannie Rossouw, interim head of the Wits Business School.

He was responding to the latest figures in the Quarterly Labour Force Survey (QLFS), issued by Statistics South Africa (StatsSA).

Unemployment, according to the QLFS’ expanded definition, significantly increased by 7.5 percentage points to 43.1% in the third quarter of 2020, compared to the second quarter.

Rossouw said the statistical impact was to be expected, given the aberration in the stats published in the previous quarter, when unemployment figures on the narrow definition of people actively looked for jobs were distorted because people could not look for work during lockdown.

“The improvement in employment numbers ... will probably only be visible from 2021. We need to reduce unemployment with more rapid economic growth, as there is a link between economic growth and employment growth.”

Economist and professor Bonke Dumisa said although the figure of 30.8% given by StatsSA is “uncomfortably not comparable” to earlier quarters, figures used confirm the unemployment rate in the third quarter were not better than in the second.

He believed the figures for the fourth quarter would be as bad.

“Economic recovery will only start by the beginning of next year, but we may only go back to the unemployment rates of December 2019 in four to five years.”

Dumisa said in order to reduce unemployment, SA would need to completely change its education system to produce people who were appropriately skilled for the country’s economic needs.

“South Africans must also start focusing on their own personal economic productivity levels. The days of demanding salary increases without committing to improving the profitability of their places of work are gone.”

Chifipa Mhango, chief economist at the Steel and Engineering Industries Federation of Southern Africa said: “The economic scenario remains bleak following the record [ gross domestic product] contraction...

“The manufacturing Purchasing Managers’ Index remained mired in contractionary territory, as did business confidence, which weighed negatively on investment activity.”