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Employment figures show only slow recovery in job market

Jobs remain scarce in the absence of economic growth.
Part-time employment increased by a solid 9.2% in Q4, 2020. Image: Shutterstock

Statistics SA says its latest survey among businesses indicates that total employment in SA increased by around 76 000 in the fourth quarter of 2020, from 9.56 million in the third quarter to 9.64 million at the end of December.

This is still way below the 10.23 million jobs recorded by the formal business sector in December 2019, before the Covid-19 pandemic forced the majority of businesses in SA to close for months.

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Digging into older Quarterly Employment Statistics reports reveals that businesses only re-employed 92 000 of the 682 000 people who lost their jobs at the height of the pandemic and government’s harsh restrictions on business activity.

In addition, the references to pre-Covid-19 figures as at December 2019 represent a weak starting point as SA was facing a crisis of high unemployment even then.

It is also worth remembering that the figures obtained by conducting surveys among households (published in the Quarterly Labour Force Survey, which includes informal businesses and informal employment such as gardeners and domestic workers) found that around two million workers lost their livelihoods during the second quarter of 2020.

The quarterly employment statistics (QES) are based on a survey of registered businesses drawn from private non-agricultural businesses such as factories, firms, offices and stores, as well as national, provincial and local government entities.

While Stats SA mentions in its latest QES report that the national lockdown forced data collectors to work from home and that some businesses could not be reached as they were apparently working from home too, it says the survey was still able to obtain estimates that met standards for accuracy and reliability.

New definition of employment

The biggest change in the latest survey concerns the definition of employment – which now takes into account people working for home and the general change in working patterns.

“In the QES survey, persons who are paid by their employer for all or any part of the pay period are counted as employed, even if they were not actually at their jobs,” notes the report.

“Persons who are temporarily or permanently absent from their jobs and who are not being paid (i.e. do not receive salary/wages) are not counted as employed.”

The definition of “employed persons” includes those who, according to Stats SA, “continue to receive remuneration from their employer, including partial pay, even if they also receive support from other sources, including government schemes”.

Thus, one could argue that the numbers actually hide quite a bit of unemployment in cases where businesses cut salaries and working hours.

In effect, holding on to half your job would count as a full job.

The Stats SA report notes that total employment decreased by 594 000 (down 5.8%) year-on-year between December 2019 and December 2020. Of concern is that the ranks of full-time employees took the brunt of the decrease in employment, decreasing by 565 000 (down 6.2%) compared to December 2019.

The trend in cutting headcount continued in the short term too, with the figures showing that companies continued to reduce worker numbers in the December quarter compared to the preceding three months. Full-time employment decreased by 11 000 quarter-on-quarter, notes Stats SA.

Employment in the formal sector

Source: Stats SA QES December 2020

The biggest casualties were workers in the beleaguered construction industry (which lost another 17 000 jobs in only three months) followed by the manufacturing sector (which reduced its workforce by 15 000 people). That translates to hardship for 32 000 families.

Luckily, there was an increase in employment in a few industries. Trading businesses added 28 000 jobs and community services added 11 000.

Things looked much better at the lower end of the job market. Part-time employment opportunities increased by 87 000 (a solid 9.2%) quarter on quarter, from 943 000 in September 2020 to 1 030 000 in December 2020, although the numbers are still a lot less than in December 2019.

Most industries reported improvement, with the notable exception of the construction industry; it lost around 1 000 part-time jobs in addition to the 17 000 permanent employees who suddenly found themselves without work.

Of interest is that salaries and wages have been improving steadily – on average. However, the average salary is also still below previous levels.

Stats SA reports that total gross salaries and wages, including bonuses and pay for working overtime, decreased by around R36.1 billion between December 2019 and December 2020.

However, people who were lucky enough to hold onto their jobs are better off. The survey found that the average monthly earnings paid to employees in the formal non-agricultural sector have largely recovered from the lockdown months.

The average salary has increased to R23 133 per month, compared to R22 429 a year ago and a low of R21 455 during the worst of the lockdown.

Increasing inequality

That fewer employees are earning more money, even if less than R1 000 per month more compared to a year ago, seems to give credibility to claims of increased inequality and the trend of an economy that needs limited higher-skilled workers instead of masses of unskilled labourers.

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Stats SA makes a point of highlighting the differences between its two different surveys that look at the labour market. The Quarterly Employment Statistics survey (QES) is establishment-based, while the Quarterly Labour Force Survey (QLFS) questions households.

“Each survey has its strengths and limitations,” notes Stats SA, mentioning that the QES cannot provide information on the person itself, such as their demographic profile, education level and hours of work, and that it excludes agricultural workers, self-employed workers whose businesses are unincorporated, unpaid family workers and private household workers.

Both surveys are however important. The QLFS collects information from approximately 30 000 households and the QES surveys 20 000 non-agricultural businesses.

A further indicator

Another important statistic concerning employment is (partly) hidden in the SA Reserve Bank’s composite leading business cycle indicator.

The Reserve Bank announced on Monday that this indicator, supposedly predicting an improvement or deterioration in the business environment, increased further during January – mainly due to an increase in advertisements offering employment.

“The largest contributor to the increase in the composite leading business cycle indicator in January 2021 was an acceleration in the 12-month rate of increase in job advertisement space,” according to the Reserve Bank. Improvements were also noted in commodity prices, money supply and the leading business indicators of SA’s main trading partners.

Leading business cycle indicator

Source: SA Reserve Bank

Unfortunately only four of the 10 individual indicators that make up the leading business cycle indicator improved, and it is noticeable that local components of the leading indicator were still worsening. The Reserve Bank noted that business confidence, car sales, the interest rate spread, manufacturing orders, average hours worked per factory worker and the approval of building plans were still heading south.

Read: No more funds available to be reprioritised for public sector wages

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Could this perhaps have a link to the state of the economy , as well as business sabotaging government policies ?

It wont recover and those that do get jobs will not earn enough to join the real middle class. It’s all pointless unless people earn real wages. They know how to pay their useless CEOs R100-R200k plus a day no problem but dont realise if everyone’s being paid nothing no one can buy anything. Big brain people we got here

“…trend of an economy that needs limited higher-skilled workers instead of masses of unskilled labourers.” Explain this one to me. How is it possible that, in a country where we have a serious education problem, the government and unions keep on pushing salaries up. They are in effect ensuring that most job-hunters outprice themselves, only to end up in the unemployable category. Wouldn’t it be better to line salaries up with what the prospective employee can offer, whilst doing everything in their power to increase the skills set of prospective employees? Yes, I understand that for them it is an ideological issue, but can you really be this blind that you can’t see that your ideological addiction is causing a major problem. But then again, CEO salaries increase in multiples, yet lower employees are stuck with single digit increases. It seems humans just can’t learn, or be trusted to do the right thing, regardless of their ideological persuasion.

Please, it is not the Covid-19 pandemic that forced the majority of businesses in SA to close for months and resultant job losses, but the poor handling of the situation by the inept ANC government.

End of comments.

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