Unemployment increases to record breaking 32.5%

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Statistics SA data show the unemployment level hitting record levels. Picture: istock
Statistics SA data show the unemployment level hitting record levels. Picture: istock

BUSINESS


The country’s official unemployment rate jumped to record highs of 32.5% in the fourth quarter of 2020 from 30, 8% in the third quarter of 2020.

Statistician General Risenga Maluleke said this is the highest unemployment rate since the start of the first Quarterly Labour Force Statistics (QLFS) Report released in 2008.

Stats SA shows that the number of unemployed persons increased by 701 000 to 7.2 million compared to the third quarter of 2020, resulting in an increase of 1 million unemployed persons.

Employment increased in all industries, except finance and mining
Statistician General Risenga Maluleke

The QLFS report also shows that the expanded definition of unemployment, which also includes discouraged work-seekers, increased by 235 000 (8.7%) in the fourth quarter.

“This is the highest unemployment rate recorded since the start of the QLFS in 2008. Moreover, the labour force participation rate was also higher in quarter four of 2020 as compared to quarter three of the same year.

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He added: “The unemployment rate according to the expanded definition of unemployment decreased by 0.5 of a percentage point to 42,6% in quarter four of 2020 compared to the previous quarter.”

The latest QLFS shows that even as unemployment increased, employment also increased.

Maluleke said this is because during quarter three and quarter four of 2020, the national lockdown regulations were relaxed, which allowed travelling, “and this played a role in people actively looking for work”.

Formal sector employment increased by 189 000 and informal sector employment increased by 65 000.

Private households employment increased by 76 000 and employment in Agriculture increased by 2 000.

“Employment increased in all industries, except finance and mining. The industries which gained the most jobs were community and social services at 170 000 jobs and construction at 86 000,” said Maluleke.

In terms of how provinces performed, the latest QLFS shows that the largest decreases in employment were recorded in Gauteng, down by 528 000 jobs, followed by KwaZulu-Natal where 210 000 people lost their jobs.

These provincial job losses are followed by the Western Cape, Eastern Cape and Limpopo who lost 180 000 jobs, 148 000 jobs and 119 000 jobs respectively.

Statis SA explains that in a quest to protect South African citizens from the coronavirus pandemic, the country’s government announced a national lockdown, which brought about a shutdown of the economy. This resulted in a shock in the labour market and a big change in the way people went about doing their work.

According to Stats SA some people worked from their usual places of work or from home and continued to receive salaries during lockdown while others received reduced salaries.

Those with higher levels of education had higher chances of receiving a full salary than those with lower levels of education
Statistician General Risenga Maluleke


However, the challenge was in those people who had to discontinue work where it was not clear if they would return to the same jobs or businesses after the lockdown.

Of those who continued to receive pay during the lockdown, some had a reduction in their pay/salary during the lockdown.

“There seems to be some relationship between the level of education and reduction in pay/salary.

“Those with higher levels of education had higher chances of receiving a full salary than those with lower levels of education in both quarter three and quarter four of 2020,” said Maluleke.

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He added that about nine in every 10 employed graduates continued to receive full salaries, compared to 81,2% of those with less than matric as their highest level of education.

Added to this, the report also shows that there are about 10,3 million young people (29.8%) aged 15–24 who were not in employment, education or training (NEET).

“This is 2,2 percentage points lower than in quarter four of 2019 – before the pandemic. In this age group, the NEET rate for both males and females decreased by 2,2 percentage points each.

“However, the NEET rate for females remains higher than that of their male counterparts in both years,” said Maluleke.


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