Tag: employment

SA sheds 2.2-million jobs in the second quarter

By Lameez Omarjee for News24

South Africa shed 2.2-million jobs during the second quarter, according to Statistics South Africa (Stats SA).

While the employment figures reflected the largest decline in employment between the second and first quarter since 2008, Stats SA on Tuesday said unemployment fell substantially as well, decreasing by 2.8 million to 4.3 million. The official employment rate is now 23.3%, compared to the first quarter’s 30.1%.

Peter Attard Montalto, economist at Intellidex said that it is best to rely on the expanded definition of unemployment – which would see the rate between 42.6% and 52.7%, which is more realistic.

The expanded definition includes persons who were not employed when surveyed and were available to work but did not look for work either because they are discouraged from looking for work or did not look for work for other reasons other than discouragement.

Weighing in on the latest statistics, chief economist at the Bureau for Economic Research Hugo Pienaar explained that while the number of employed people declined by 2.2-million, the size of the labour force declined by much more – that is by 5 million. “This is why the unemployment rate came down.”

As to why the labour force declined, Pienaar explained that during the hard lockdown in April, people were not allowed to leave their homes unless they were considered essential workers or to buy food. “You were not allowed to go out and look for a job if you were unemployed at that stage,” he said. Millions less people were actively searching for a job and this resulted in a large decline in the labour force, he said.

“This is temporary. In the third quarter, with the economy opening up again, people can look for work again. The labour force will increase again, I imagine quite dramatically,” he added.

Economists had anticipated record high unemployment, due to poor economic conditions. Nearly a million job losses were projected for the single quarter – this matches the job losses in the 12 months following the global financial crisis, Fin24 previously reported. Investec had forecasted an unemployment rate of 37.9%.

Government had implemented a nationwide lockdown in March in order to slow the spread of Covid-19. During April, only essential goods and services were operational and economic activity was limited with lockdown restrictions at their highest level. As a result GDP contracted by 51%, on a quarter-on-quarter, annualised basis. Non-annualised, the contraction was 16.4%.

In its September quarterly bulletin, released on Tuesday, the Reserve Bank noted that the lockdown had brought about logistical complications for Stats SA – contributing to the delay of the release of the employment data.

“The number of unemployed South Africans had already increased significantly in the year to the first quarter of 2020 due to a surge in the number of new and re-entrants into the labour market who failed to find employment.

“The official unemployment rate increased to a record high of 30.1% in the first quarter of 2020, reflecting the impact of the economic recession that had already started in the third quarter of 2019,” the bulletin read.

Stats SA said that it had to change the mode of collection of data to adapt to Covid-19 safety protocols.

“Given the change in the survey mode of collection and the fact that Q2: 2020 estimates are not based on a full sample, comparisons with previous quarters should be made with caution,” Stats SA said.

In an emailed response to questions from Fin24, Stats SA said data is usually collected from April to June. But due to a change in data collection from face-to-face to Computer Assisted Telephone Interviewing, it was delayed for planning and the training of field workers between April and mid-May. The data was collected from 14 May to 30 June 2020.

Stats SA noted that the usual sample size for the survey is 30 000 but not all sampled dwelling units had contact numbers and the data for this survey was collected from 17 345 dwelling units.

By Ivan Israelstam, chief executive of Labour Law Management Consulting

Xenophobia deters many South African employers from employing immigrants. However, many other employers are not at averse to employing aliens whether they are in the country legally or illegally.

Some of the reasons for the high number of illegal immigrants gaining employment in South Africa include:

• Job seekers from outside our borders provide potential employers with false identity documents or work permits

• Employers do not always think of asking prospective employees for proof of their right to work here

• Other employers, aware of the holes in the law enforcement system in South Africa, close a blind eye to such legal requirements because they couldn’t be bothered

• Some employers believe that an illegal immigrant will be more likely to do his/her work properly and obey the employer’s rules for fear of being reported to the Department of Home Affairs

• Illegal immigrants are often willing to accept lower remuneration than is paid to legal employees

• Employees without legal papers are often more willing to accept poor treatment, transfers to out of the way locations, extra work and not being registered for unemployment insurance

• Many skills are difficult to find in South Africa and many employers do not care whether they obtain these skills legally or illegally.

It is therefore not surprising that so many employers turn a blind eye to the law’s requirements. However, they do this at their peril because the courts have the power under the Immigration Act to repatriate illegal immigrants and to impose heavy fines on offending employers.

Immigration legislation very strictly prohibits the employment of foreign nationals unless extremely stringent, rigid and unrealistically lengthy procedures are first carried out. That is, the employer is, before employing an immigrant, required to prove that it has done everything in its power to recruit a South African into the post in question and that no such South Africans are available. By the time the employer has dragged itself through this time consuming process the foreign national with the rare skills has accepted a job in another country. These restrictive regulations are, under the latest amendments, currently becoming even more rigid and draconian.

What then must employers do when they discover that some employees are working illegally? Such employers obviously need to terminate the employment of such employees. However, what is not so obvious is how the employer should go about such terminations.

An employer cannot dismiss a suspected illegal alien before checking up on these suspicions. This is because, if the employee is incorrectly fired for being illegal, it may constitute an unfair dismissal and/or unfair discrimination on the grounds of ethnicity. This could result in the employer having to pay the employee compensation up to the equivalent of 24 months remuneration.

The wise employer’s first step is to investigate thoroughly all allegations that employees are working illegally.

Secondly, especially where the employee’s status is unclear, the employer should hold a hearing to establish the truth of the matter before firing the employee. This will give a properly qualified chairperson the opportunity to look thoroughly into the legality of the employee’s status.

Thirdly, where the hearing proves that the employee is working illegally the chairperson should end the employment relationship making it clear that this has been done purely for reasons of immigration law.

Fewer than a quarter of matrics find jobs relatively quickly, according to economist Mike Schüssler of economists.co.za.

Those members of the matric class of 2017 who will not be studying further, but will be looking for a job, will not be easily absorbed by the job market, he told Fin24 on Tuesday.

“It will be tough for them to get work. Over 50% of our matriculants under the age of 34 have not found permanent employment and it’s not getting better,” he said.

“This is part of the process young job seekers go though. It takes long to get a first job – even for those with a degree it takes a while. You do not get a degree and suddenly you are running the firm.”

The overall unemployment rate in SA nears 28% in the narrow sense (excluding people out of work, but still actively searching) and 37% in broader terms (including those who have given up looking for a job). For young people this figure is much higher. Schüssler estimates it to be well over 50%.

“To get your first job is probably one of the hardest things in life and often takes a while. If you have not had a job, you are regarded as not having ‘proven’ yourself yet,” explained Schüssler.

“Unemployment in SA is high already, but for the youth it is higher and for those looking for a first job it is very tough.”

According to Statistics SA, only 12.8% of people in SA between 15 and 24 have a job (in terms of the narrow definition). For those between 25 and 34 years of age, only 49.6% actually have a job; and for those between 35 to 44 years of age, 63% have a job.

“My message to matrics is that a job is a job. The big thing is to start off doing a first job. Yes, we will have minimum wages, but maybe we have to be careful regarding how it is implemented,” suggested Schüssler.

“Maybe people getting a job for the first time could be excused from having to get the minimum wage for the first two years of employment.”

Another suggestion by Schüssler is for young matriculants who do not find a job quickly to try and do volunteer work.

“Maybe ask if you can just get money for transport. At least you will still be in the process of learning. The next employer wants to know that you can stick to a job and perform the tasks you are given. That is very important,” said Schüssler.

Never lose hope

“Don’t give up hope. Everybody is suffering and employers often prefer young people who are a little bit older – about 25 years – as they might be regarded as being more mature and used to the discipline of sticking to a job.”

He pointed out that this is a global trend as older people tend to be regarded as having proven themselves – whether they have done so or not.

“Young people must try to offer a service – even start waitering, just start somewhere. The best advice is not to give up. And if you get a job, work hard. Employers want people who are productive and efficient,” said Schüssler.

“Young people must say to themselves: get a job, then negotiate and work your way up. It is not an automatic thing. Yes, SA’s unemployment is high, but all over the world young people struggle to find jobs.”

By Carin Smith for Fin24

Automation could kill 800m jobs worldwide

As many as 800-million workers worldwide may lose their jobs to robots and automation by 2030, equivalent to more than a fifth of today’s global labour force.

That’s according to a new report covering 46 nations and more than 800 occupations by the research arm of McKinsey & Co.

The consulting company said on Wednesday that both developed and emerging countries will be impacted. Machine operators, fast-food workers and back-office employees are among those who will be most affected if automation spreads quickly through the workplace.

Even if the rise of robots is less rapid, some 400-million workers could still find themselves displaced by automation and would need to find new jobs over the next 13 years, the McKinsey Global Institute study found.

The good news for those displaced is that there will be jobs for them to transition into, although in many cases they’re going to have to learn new skills to do the work. Those jobs will include health-care providers for aging populations, technology specialists and even gardeners, according to the report.

“We’re all going to have to change and learn how to do new things over time,” Michael Chui, a San Francisco-based partner at the institute, said in an interview.

Reported by Rich Miller for Bloomberg LP on Tech Central

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