South Africa’s Unemployment Stat Drops to 23.3% Thanks to Lockdown

Despite the South African economy shedding 2.2 million jobs due to the COVID-19 lockdown, unemployment in the country dropped from 30.1% to 23.3% in the second quarter of 2020, according to Statistics South Africa (Stats SA)… the lowest rate since 2009!

However, before we all celebrate, the sharp fall in unemployment – as published in the Quarterly Labour Force Survey (QLFS) – is not a reflection of an improvement in the labour market… but rather an effect of the national lockdown and semantics, since the official definition of unemployment requires that people look for work and are available for work.

“The national lockdown hindered people from looking for work,” Statistician-General Risenga Maluleke said on Tuesday, adding that “almost all of the 5.2 million people who did not look for work for reasons other than discouragement indicated ‘national lockdown’ as the main reason for not looking for work.”

This phenomenon is not unique to South Africa. “It has been observed in most countries across the world, with the exception of Canada and the United States, as highlighted in the recent ‘ILO monitor: COVID-19 and the world of work’ report. So, the picture observed in South Africa is in line with the rest of the world,” Stats SA said.

According to South Africa’s employment stats, the number of employed people decreased by 2.2 million to 14.1 million, compared to the first quarter of 2020.

Meanwhile unemployment declined substantially as well – decreasing by 2.8 million to 4.3 million… and resulting in a decrease of 5 million (down by 21.4%) in the number of people in the labour force.

The result is a “significant decrease of 6.8 percentage points in the official unemployment rate from 30.1% in quarter 1 of 2020, to 23.3% in quarter 2 2020,” the report found.

Employment decreased in all sectors in quarter 2 2020.

Lockdown insight

To capture changes brought about by the national lockdown, some additional questions were included in the quarter 2:2020 questionnaire.

• Of the 14.2 million persons who were employed in the second quarter of 2020, more than half (58.1%) were expected to work during the national lockdown by the companies / organisations they work for.
• Most of those who worked during the national lockdown did so from their usual place of work, and about 17.0% indicated that they worked from home.
• The proportion of those who worked from home was higher in Gauteng and Western Cape than in the other provinces.
• The share of those who worked from home was higher among professionals (44.7%) and managers (40.6%), indicating access to tools of the trade to facilitate work from home.
• The majority of employed persons continued to receive pay during the lockdown. However, about one in five of them had a reduction in their pay/salary.

“There seems to be some relationship between level of education and reduction in pay/salary. Almost 9 in every 10 employed graduates (89.7%) continued to receive a full salary, compared to 75.2% of those with less than matric as their highest level of education,” said Stats SA. – SAnews.gov.za