South Africa’s unemployment rate jumped to 30.8% in the third quarter of 2020 from 23.3% in the second quarter, Statistics South Africa (Stats SA) said on Thursday.
Unemployment, according to the expanded definition which includes people who were available for work but not looking for a job, rose to 43.1% from 42% the previous quarter, said the agency.
Stats SA said the working-age population increased by 146 000 in the third quarter of 2020 compared to the second quarter of the same year and that the number of employed persons increased by 543 000 to 14.7 million in quarter three.
According to Stats SA the number of unemployed persons also increased by 2.2 million to 6.5 million compared to the second quarter resulting in an increase of 2.8 million (up by 15,1%) in the number of people outside of the labour force.
Statistician General Risenga Maluleke said to better understand the observed large changes in the key labour market indicators between quarter two and quarter three, special tabulations were done to study movements between labour market status categories.
“It was observed that a large number of persons moved from the ‘other not economically active’ category to ‘employed’ and ‘unemployed’ status between the two quarters.
“The movement was proportionately more to the unemployed than for the employed, which resulted in a significant increase of 7.5 percentage points in the unemployment rate to 30.8%.
“And the unemployment rate, according to the expanded definition of unemployment, increased by 1.1 percentage points to 43.1% in the third quarter of 2020 compared to the second quarter of 2020,” he said.
This is the highest unemployment rate recorded since the start of the first Quarterly Labour Force Statistics in 2008.
Maluleke said the number of discouraged work seekers increased by 225 000 and the number of people who were not economically active for reasons other than discouragement decreased by 2.9 million between the two quarters.
“This resulted in a net decrease of 2.6 million in the not economically active population,” he said.
Analysts say the current unemployment figure of 30.8% paints a better picture of how the lockdown affected jobs in the country.
The biggest criticism of the second quarter data results is that Stats SA handled the jobs lost as a result of lockdown by removing them from the workforce, rather than classifying them as unemployed.
“The unemployment rate was artificially low in the second quarter because the statistics agency only classifies people as unemployed if they are actively looking for work, which many people were unable to do in the April-June quarter because of a strict coronavirus lockdown,” said economist Francois Stofberg.
Duma Gqubule, the founding director at the Centre for Economic Development and Transformation, said: “The unemployment crisis is a national disgrace. 1.7 million people have lost their jobs since the start of the lockdown. There are now 11.1 million unemployed people in South Africa. The unemployment rate for Black Africans is 47.4%. It is heading towards 50%. The unemployment rate for Black African females is 51.4%. The unemployment rate for all races in the Eastern Cape is 51.2%. There is no plan to address this crisis.”
“We have given so many other proposals on what should be done. But the government plan is to implement unprecedented austerity measures that will prolong the recession and result in further increases in the unemployment numbers every year for the next three years,” he said.
Jobs were at the centre of President Cyril Ramaphosa’s economic reconstruction and recovery plan presented by last month.
Ramaphosa said the government has committed R100 billion to create public and social employment opportunities, of which 800 000 are expected in the months ahead.
The rising unemployment rate may pose a threat to social stability, and it could complicate efforts to stabilise South Africa’s rapidly deteriorating public finances.
Finance minister Tito Mboweni announced the three-month extension of a special Covid-19 relief grant for unemployed people during the medium-term budget policy statement last month.
He said National Treasury will have to pay out about R6 billion to help those who are not employed.