First-quarter unemployment rises, pushing the jobless rate to a record level in SA

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Unemployment is at critical levels in South Africa. Photo: iStock/ Blanscape
Unemployment is at critical levels in South Africa. Photo: iStock/ Blanscape

BUSINESS


South Africa’s official unemployment rate rose to 32.6% between January and March (the first quarter) of 2021, from 32.5% in the last quarter of 2020, while the Quarterly Labour Force Statistics (QLFS) place the country’s expanded unemployment rate, which includes discouraged workers, at 43.2% – an increase of 0.6 percentage points from the previous quarter.

This is the highest unemployment rate recorded since the start of the QLFS in 2008.

Statistician-General Risenga Maluleke said the working-age population increased by 144 000 in the first quarter of 2021, compared with the fourth quarter of 2020. The number of employed persons fell by 28 000 to 15 million in the first quarter of 2021, while the number of unemployed persons increased by 8 000 to 7.2 million, compared with the fourth quarter of 2020, resulting in a decrease of 20 000 people in the labour force.

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“What we have seen in all the categories of employment statistics is that there wasn’t much movement between the fourth quarter of 2020 and the first quarter of 2021. The number of those unemployed declined slightly by 8 000 but still sits at 7.2 million. However, the number of discouraged work-seekers increased by 201 000 to 3.1 million people,” said Maluleke.

The largest employment decreases were seen in private households, where 70 000 domestic workers lost their jobs, followed by the informal sector and the agricultural sector at 19 000 and 18 000, respectively. The formal sector saw employment increases of 79 000 in the first quarter of the year.

Compared with a year ago, total employment decreased by 1.4 million. The number of unemployed people increased by 2.4% by 172 000 people, while the number of people who were not economically active increased by 11.6% to 1.8 million.
Maluleke.

He added that four out of eight industries in the formal sector recorded employment gains. The increase of 79 000 in employment was mainly driven by the finance, utilities, mining and manufacturing industries, while the biggest losses were recorded in the construction sector, followed by transport, community and social services, and trade.

Maluleke said that, compared with a year ago, there has been a net loss of 707 000 jobs in formal sector employment. Of the 7.2 million unemployed people in the first quarter of 2021, 52.4% had education levels below matric, followed by those with matric at 37.7%.

He said only 2.1% of unemployed persons were graduates, while 7.5% had other tertiary qualifications as their highest level of education.

The Statistician-General said a major issue of concern remained the extremely high youth unemployment numbers. The latest QLFS report shows that youth unemployment for those between 15 and 24 years is at 63.3%.

Maluleke said some young people had been discouraged with the labour market and they are also not building on their skills base through education and training.

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“The reason we calculate youth unemployment for those between 15 and 24 years is to be able to make international comparisons. The unemployment of this age group remains the highest in the country. Young people of that age group remain vulnerable in labour markets.

Of the 10.3 million young people aged between 15 and 24, 3.3 million are not in employment, education or training. This overall rate increased by 1.7 percentage points in the first quarter of 2021, compared with the last quarter of 2020.
Maluleke

He said that, of the 15 million people who were employed in the first quarter of 2021, almost four out of every five (81.3%) were expected by their respective companies and organisations to work during the national lockdown.

In a quest to protect South African citizens from the Covid-19 coronavirus pandemic, the government had announced a national lockdown that had brought about a shutdown of the economy, which in turn had resulted in a shock to the labour market and a big change in the way people went about doing their work.

Stats SA cautioned that some factors need to be taken into consideration when interpreting the unemployment figures.

The agency said these included that the Covid-19 pandemic has altered how Stats SA collected employment data and labour force participation, which was lower in this quarter, as compared with the final quarter of 2020.


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