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SA shed 2.2m jobs in the second quarter

Unemployment soars to over 40%.
Image: Naashon Zalk, Bloomberg News.

South Africa lost 2.2 million jobs in the second quarter due to the lockdown. This has sent unemployment, as per the extended definition, to over 40%.

The staggering decline in the unemployment rate is the first real indication of how the labour force has been affected by the pandemic.

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The 2.2 million lost jobs mean there are only 14.1 million employed people in the country – the lowest since 2011.

But despite the jobs bloodbath, the official jobless rate fell from 30.1% to 23.3%. This is due to the official definition excluding unemployed people who are not actively looking for a job. The extended definition, which includes these people, rose from 39.7% to 42%.

Unemployed persons declined substantially by 2.8 million – to 4.3 million compared to the first quarter of 2020.

According to Stats SA, the number of discouraged work-seekers decreased by 447 000, and the number of people who weren’t economically active for reasons other than discouragement increased by 5.6 million quarter on quarter, resulting in a net increase of 5.2 million in the not economically active population. “These changes resulted in a significant decrease of 6.8 percentage points in the official unemployment rate from 30.1% in quarter 1 2020 to 23.3% in quarter 2 2020.”

Risenga Maluleke, Statistician-General and Head of Statistics South Africa (Stats SA), explains: “The official unemployment rate is calculated using the number of persons who are employed and unemployed, and does not include discouraged work-seekers.”

He said the expanded unemployment rate increased by 2.3 percentage points in the second quarter. “This is reflective of the fact that people were available for work but did not actively look for work.”

The job losses followed the implementation of strict restrictions to curb the spread of the Covid-19 virus, which put the economy in its most prolonged recession in nearly three decades. Most South African businesses were forced to close for five weeks, and many were forced to retrench staff.

Not a true reflection

Economists warn that the unemployment statistics released paint an incorrect picture of the current trends in the workforce.

According to Dawie Roodt, chief economist at the Efficient Group, people who are not seeking employment due to lockdown restrictions cannot be categorised as discouraged workers.

“We are currently in very volatile circumstances and any numbers [released] is most likely to give us an incomplete picture of what is really going on [in the labour force]. We probably will have to wait a couple of months, or quarters before we can understand the underlying trend caused by the lockdown”.

“We have seen a massive increase in the number of people simply sitting at home doing nothing. Officially they are not unemployed and they are not even discouraged because they are not allowed to leave their places of residence. This fall in unemployment gives us an incorrect picture,” Roodt said.

He said that it would be better to look at the Labour Force Participation Rate, which collapsed by less than 50% in the second quarter.

Another economist at Citibank, Gina Schoeman, explains that the reason the unemployment statistics declined is because of a drop in the labour force.

“It is a function of the number of people unemployed people over the labour force because the number of people looking for work dropped drastically. You can also see that the companies were not hiring through the number of employed people in the population, as that absorption rate went down to 36% from 42%,” Schoeman said.

She says that these numbers released depict that people’s fear of contracting the virus has prevented them from looking for work.

Investec chief economist Annabel Bishop said that these numbers are expected to increase in the third quarter, as the lockdown regulations have been eased.

She explains that as people become more economically active the unemployment rate decreases.

“The most important point is that we estimate the unemployment rate would have been 45% in Quarter two if the newly unemployed in Quarter two had not been seen as ‘not economically active’ and instead were still part of the Labour force as they normally are. The data today is therefore not compatible with that of Quarter 1 of  2020 or any other historical period,” Bishop said

 

LISTEN: Isaah Mhlanga, Chief economist of Alexander Forbes, discusses Stats SA’s unemployment figures

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2.2 Million Private Sector Jobs lost . No Government Jobs Lost ……. Cyril we were not all in the same boat during Lockdown and by the way TERS was a shambles but that didn’t affect Government employees either !

A better life for (all) those in Civil service!

The article should read

“SA’s corrupt, useless Governing party, better known as the ANC responsible for millions left destitute”

Meanwhile life goes on in the oversized Government and bankrupt Municipalities..Nepotism, cadre deployment and looting on a grand scale..

It’s a disgrace and Mandela called for a a better life for the poor.. They don’t care!

TERS only enriched government employees through corruption with TERS funds.

Bunch of utter imbeciles in government

No worries Dougie– they are there to stay !!!

Not one of those imbeciles lost their jobs or had to take a pay cut, though.

The joke’s on us, comrade.

Someone please correct me if I’m wrong, but was people’s constrained ability to look for employment used to exclude them from the official unemployment rate and they were rather included in the expanded rate? If this is so then what is the use of the official rate then.

The expanded rate seems to be more accurate, meaning the unemployment rate actually increased. This makes more sense than saying more people lost jobs but the rate decreased because the lock down meant they couldn’t look for jobs.

Ayi saba — Votela ANC !!!

@Moneyweb – Please hire neural moderators.

Neutral*

More like ‘censorship’ as opposed to moderation.

According to Trading Economics, we have got ten million people in formal employment. Our population size is 60 million. That means 83% of citizens are unemployed. 3 million individuals pay 98% of taxes. This implies that 95% of society contributes very little to nothing, while they are living like queen bees. The 5% of citizens who are worker bees are forced to fly all over the place to keep the rest alive.

Every time the exhausted worker-bee enters the hive, he gets abused as a privileged WMC. I honestly can’t see how this beehive can survive. The swarm is cannibalising itself. The majority are squatting on the honeycomb where they can steal their own honey.

Bad maths. The other 83% are not all of working age.

Are they employed? Are they contributing to the fiscus? Who finances the social grant that supports them? Some are too young, some are too old, some are too lazy, some are unemployable, some are capable and willing to work but cannot find work. The point is they are not contributing to society. 5% are carrying 95%. You can splice and dice the math any way you want, this socio-economic situation is unsustainable.

I have no problem with the essence of your argument so you don’t have to defend that. Rigour is essential if you want to substantiate your stance though.

The ANC starting to rival ZANU PF for sheer destruction of country and futures.

They learned from the best. A recent trip to brush up on the finer details.

South Africa’s #unemployment rate declined by 6,8 percentage points to 23,3% in Q2:2020 compared to Q1:2020.

Sounds good. Three ways to decrease unemployment to zero by 2/2021
1. Fix State Capture/Corruption
2. FixEksdom.
3. Pay people who are unable to support themselves govt benefits.

We have reason to be optimistic. There are many who are in a worse position than us.

Yours is a parody account, right? Because you cannot be serious.

@Incitatus – I see they also removed your comment. unbelievable these moderators.

Mr Watson, your 3 points have been ANC policy for 26 years now and unemployment is only rising.

The points are oxymorons or contradictions in terms because socialism = corruption, the Eskom disaster is the natural result of ANC policies plus the government does not have money to support anybody. The social grant is financed by the productive population that is being decimated by ANC policies.

The only way to fix corruption is by implementing property rights and law and order (capitalism and market economy).
The only way to fix Eskom is by privatization and by breaking up its monopoly.
The only way to provide for the unemployed is allowing the economy to grow. Only market principles and entrepreneurs can save society from famine. A government lives at the expense of everybody else. The government is your competitor, not your friend, my brother.

There is no V in that shape at all.

Surely they should be posting the unemployment claims numbers as well? What I admire about US media is they do discuss the labor force participation, median earnings per hour and unemployment (or UIF) claims numbers to provide a broad picture. What is the median income of those still in employment? a financial advisor might be counted as employed but if his income is R0.00 per month how does that affect the bigger picture?

Overall though the numbers out so far are not as bad as I though it would be. I expected the expanded to be more than 50% and we are far from it.

Apocalypse now! Sa is completely overpopulated!
There isn’t jobs to be created!

Stop breeding at 6 kids per family , especially whilst unemployed : No wonder the countrty is Knackered.

This actually means it’s now again time for another International Donor Conference where delegates/donors/hangers on/Mercedes from all over the world (i.e. Lesotho, Eswatini, Azerbaijan and Dumbabwe) will pledge gazillions of Dollars in Monopoly money/Zim Dollars to invest in Mzanzi/the good ship Costa Concordia. The conference will come up with a “New Plan” to replace the previous “New Plan” from the last conference which was in October last year and the “New Plan” from February 2019. The keynote address will be by Captain Schettino, a well known economist and part time ship captain.

All relevant stakeholders will be consulted and an Action Committee with a 24/7 Online War Room will be instituted to monitor progress and come up with a Revised New Deal Part 1 (Beta version). The process will be under the control of a Spanish speaking, one eyed Cuban cadre with a Teaching Certificate, third class. This cadre is also a part time neurosurgeon in Havana so she will also advise on further Covid protection.

There will be no theft of donor funds as with the PPE contracts during the non-event of Covid. NDZ will carefully monitor whatever it is she monitors and report back to the Top 6 and who eat crayfish and steak everyday. There will unfortunately be no smoking at the Conference because when they zol they share saliva and it makes you dumb. The Minister of Defence will fly delegates back home on an Air Force Flossie (one of the 2 left in service) with the Blue Bulls rugby team on board to consult about any rugby questions which may arise during the flight. They will also serve snacks to delegates.

Are these people even living in South Africa …? The lines of desperate, out of work people at Builders just gets longer and longer and longer. Something has to give.

Thanks for some humour. It helps to some extent.

Wow, this is so bad I wonder if the Government is going to change a few road names to make people feel better?

That should do the trick !

plus the loss in taxes, vat etc….but dont worry we will launch national health one of these days

The Stats SA graph stating reduction of 6.8% refer.
This would imply if we Lock Down another 4 times we will have full employment!!
Viva,some limpopo logic in action

figures all skewed…. there are plenty of souls awaiting in the saa wings & missed the counting.. roll-call??

2.2mil X 500,000.00 per job equals to an uninvestment of R1.1 Trillion

Add that to the loss in Tax Revenue and IMF loan which equals fought to R1,750 Trillion lost.

Have another job summit!

The delay in finding the R10billion for SAA clearly shows that the state coffers are empty. Today is D-day for tax. My company has to pay no additional tax, a first in many many years. The chickens are home to roost.

So the more jobs which are lost, the better the unemployment statistic?
South Africa’s solution to unemployment is readily apparent. Just ensure that all jobs are lost then the unemployment rate will drop further to, hopefully, 2%.

End of comments.

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