Tag: unemployment

The UIF is not a ‘money tree’ – Nxesi

By Jason Felix for News24 

The Unemployment Insurance Fund (UIF) is not a “money tree” with unlimited resources.

That was the warning from Employment and Labour Minister Thulas Nxesi, who revealed on Tuesday that the UIF has around R50-billion available.

Nxesi delivered a ministerial briefing in the National Council of Provinces (NCOP) on the measures his department has taken to mitigate the Covid-19 pandemic.

Through the Covid-19 Temporary Employee Relief Scheme (TERS), over R49-billion had been disbursed in benefits in the form of over 11-million payments since the beginning of the lockdown.

Nxesi said R23-billion was disbursed in Gauteng, in five million payments, and R484-million was disbursed in the Northern Cape, in over 100 000 payments.

‘Mass unemployment’

At the same time, R7.5-billion was disbursed in 1.3 million payments in normal UIF benefits.

Nxesi said plans were afoot to ensure the sustainability of the UIF fund.

“We have about R50-billion available. The question we need to answer now is what is the way forward when we have to deal with mass unemployment? This is a serious matter that the UIF board is looking at.

“It is difficult at this stage to determine all the retrenchments. But if the worst comes to the worst, we might see ourselves in the 2008 situation, where we would have to appeal to government,” he said.

Nxesi said, while the UIF was repurposed, it also needed to build in the necessary financial controls.

“I said at the time, ‘we don’t start paying out benefits before controls are in place’.

“This led to initial delays, and complaints from employers that the conditions were too onerous – which, in turn, compromised UIF controls in the rush to get payments out to laid-off workers,” he said.

He also said the UIF was aware of the fraud risks with TERS payments.

Nxesi said:

In September, all Covid-19 TERS payments were put on hold after several allegations of corruption and complaints that employees were not receiving their monies.

Stopping the payments allowed the UIF to implement adequate controls and to mitigate the identified risks.

During the first payment run on 21 September, and after the suspension of the TERS payments, errors were detected and the payments were rejected.

Some of these included the rejection of 193 applications after it was found the applicants were deceased persons.

Nxesi said 1 688 government employees, who applied for TERS were rejected. Also rejected were two applications from inmates and 1 968 applicants with invalid identification numbers.

“The holes are being plugged. The UIF has received the correct master data from the Department of Home Affairs, which is the latest data, so no deceased employee will be paid.

“The risk of inflated salaries by employers has also been corrected as the UIF now verifies with the latest declared salary.
“All under-age ID numbers have been blocked on the system,” he said.

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.

Unemployment in South Africa rose to 30.1% in the first quarter of 2020, according to Stats SA.

Since the beginning of the year, SA’s tech sector has seen a jobs bloodbath.

  • In January, telecommunications giant Telkom communicated it was retrenching as many as 3 000 employees
  • Retail giant Massmart closed down its electronics units – DionWired and Masscash – leaving 1 400 people without jobs
  • Systems integrator Dimension Data revealed that approximately 480 employees were to leave the business through a Section 189 process
  • Cell C announced it was to let go of as much as 40% of its semi-skilled labour force, as well as some senior managers and executives
  • SABC is also set to cut about 600 jobs

During the period, finance shed the most jobs (50 000), followed by community and social services (33 000), agriculture (21 000), transport (17 000), manufacturing (15 000), construction (7 000) and utilities (4 000).

SA’s unemployment rate breaks 30%

Source: EWN

South Africa’s unemployment rate for the first quarter of this year rose by a percentage point to 30.1%.

The number of employed persons decreased by 38,000 to 16,4 million between January and March 2020, while the number of unemployed persons increased by 344,000 to 7,1 million compared to the fourth quarter of 2019.

South Africa’s unemployment rate increase by 1,0 percentage point to 30,1% in Q1:2020 compared to Q4:2019. The unemployment rate usually increases between Q4 and Q1 each year.

Chief economist at Stanlib, Kevin Lings, said that these numbers were exceptional.

“The unemployment rate from my perspective jumped quite substantially, it’s now at about 30%. What’s stood out in particular, is that in the past year, almost 900,000 more people have become unemployed and I think that is exceptional and it speaks to our inability to create jobs in a very low-growth environment.”

It’s important to note that these figures capture data from the first quarter of this year.

National Treasury now estimates that job losses could be between 690 000 and 1.79-million due to the impact of the Covid-19 pandemic on the South African economy.

The 690 000 job losses are likely in the event of a quick recovery; the larger figure is a worst-case scenario.

The sectors that will see the largest impact are likely to be:

  • Manufacturing;
  • Construction;
  • Trade;
  • Catering and accommodation; and
  • Financial and business services.

Avis Budget Rent-a-Car, part of the Barloworld Group, announced that a total of 978 employees would be affected by retrenchment, according to a Fin24 article. This is nearly half of the employees of the company.

Meanwhile, the Bidvest Group’s shares fell more than 5% on Monday after the diversified services and trading company warned of possible job losses as a result of coronavirus-related disruptions across its operations.

This is in addition to running list of companies in South Africa who have gone into business rescue, or foresee retrenchments and job cuts.

These include:

  • Phumelela Gaming and Leisure (currently in business rescue)
  • Afarak Mogale and Afarak South Africa (currently in business rescue)
  • SAA (currently in business rescue)
  • SA Express (currently in business rescue)
  • Edcon (currently in business rescue)
  • Comair (currently in business rescue)
  • Tiger Brands
  • Cell C
  • Pam Golding
  • Prasa
  • Flight Centre
  • SAB

Local seven-year-old starts stationery business

By Lungile Satsuma for IOL 

Omphile Mabitsela, 7, is so determined to beat the country’s harrowing unemployment statistics that he has already started building his stationery empire.

Mabitsela, a Grade 2 learner from Randburg, has already roped in two of his friends, his aunt and mother to help him grow his stationery business.

His “office” space is situated at his mother’s business building, also in Randburg. Quirk Quirk Inc, Omphile’s business, produces and supplies a variety of paper-based stationery, such as bookmarks and party packs and sells puzzles, crayons and pencil cases.

He told The Star this week he wanted to be the person who hired the unemployed who he heard President Cyril Ramaphosa speaking about in the media. It was announced recently the country’s unemployment rate had shot up to 29.1%.

“President Ramaphosa told us there are so many people who are not hired so I want to be that person who hires them,” Omphile said.

His mother, Prudence Mabitsela, said parents needed to instill entrepreneurial skills into their children to become self-starters and not necessarily wait for jobs.

“We should stop creating job seekers as a country and start creating jobs ourselves,” she said.

The young mogul said he was inspired by his mother to start his business which has been in existence for a year now. It also has its own website.

“It was my mother that inspired me to start my business because she is a business owner as well. I want to hire people who don’t have jobs,” he said.

Quirk Quirk Inc is a registered and 100% black-owned business. Omphile mixes his academics and arts to produce his products.

He said his passion was inspired by his friend who showed him his “quacks quacks” and that inspired him to make bookmarks for people who read books. These sold for R10 each.

His mother said Omphile was someone who was aware of his surroundings and wanted to assist where he could.

“He has hired a team which consists of social strategists, a brand manager and a receptionist,” she said.

Omphile said his target audience is from everywhere in South Africa and people can order items online.

His parents initially funded the company which eventually grew to be self-sustainable.

The determined young man said he was motivated by unemployed people seeking jobs and knowing that he can be the solution in inspiring people to be business-minded.

“I want to inspire them to have their own company,” he said.

The company has sold more than 1000 products countrywide.

What unemployment looks like in South Africa

South Africa’s unemployment rate is getting worse. The latest stats from Stats SA, as well as the opinions of leading economic and labour experts, paint a very dire picture:

  • The unemployment rate increased by 1,4 percentage points from 27,6% in the first quarter of 2019 to 29,0% in the second quarter of 2019
  • The number of people unemployed grew by 455 000
  • The number of people employed grew by just 21 000
  • Government’s failed Industrial Policy Action Plan (IPAP) was supposed to create 350 000 manufacturing jobs
  • 320 000 manufacturing jobs have been lost since 2008
  • Gang violence on the Cape Flats is a direct result of the loss of jobs in the textile industry in the areas
  • 6,7-million people are currently unemployed in South Africa – the size of the entire country of Bulgaria

By Jewel Stolarchuk for The Independent 

18 000 jobs in Deutsche Bank are set to be cut as the German national lender embarks on mass retrenchment exercise. Whole teams at the bank’s Asia-Pacific offices have reportedly been let go, as the lender seeks to transform itself from an investment bank that used to compete with the lenders in Wall Street, after struggling in the aftermath of the financial crisis.

Deutsche Bank employs about 4,700 employees in its Asia-Pacific offices in Singapore, Sydney, Tokyo and Hong Kong. The investment banking team in the region consists about 300 staff members and it is expected that 10 to 15 per cent of these employees and almost all the employees in the equity capital markets division will be retrenched.

According to Reuters, the restructuring plan will ultimately cost 7.4 billion euros (SGD $11.31 billion) and will see the bank cut back on its fixed income operations and axe its global equities business altogether.

Most of those retrenched are working in the bank’s offices in Europe and the United States but some offices from Sydney to Hong Kong were also affected. Retrenched workers are due to sign redundancy packages.

One Deutsche bank employee, an equities trader based in the Hong Kong office who declined to be named, told Reuters that staff were called individually to meetings and that the mood was “pretty gloomy” as the job cuts began. He said: “(There are a) couple of rounds of chats with HR and then they give you this packet and you are out of the building.”

While a Deutsche Bank spokeswoman declined to comment on specific departures, an insider who is familiar with the bank’s Australian operations told Reuters that most of the mergers and acquisitions staff would not be immediately affected but the teams in the four-strong equity capital markets were being retrenched.

The Deutsche bank spokeswoman assured the press that the bank would be directly in touch with employees. She added: “We understand these changes affect people’s lives profoundly and we will do whatever we can to be as responsible and sensitive as possible implementing these changes.”

Deutsche Bank’s Chief Executive Officer Christian Sewing called the retrenchment exercise part of a “restart.” In a letter to employees, he wrote: “We are creating a bank that will be more profitable, leaner, more innovative and more resilient.”

This “restart” comes on the heels of Deutsche Bank’s failure to merge with its rival Commerzbank. In May, Mr Sewing hinted at extensive restructuring as he promised shareholders that he will implement “tough cutbacks” to the investment bank.

How it will impact South Africa

According to an article by Business Insider, the Sandton headquarters employ approximately 70 staff.

  • The equity trading desk will be closed completely, with the loss of around 12 jobs
  • The fixed income team, which trade bonds, will remain largely unchanged in South Africa

The bank suffered a pre-tax loss of €16-million (R251,5-million) on its South African activities last year, according to the Deutsche Bank annual report.

By Luyolo Mkentane for Business Day

The unemployment rate rose to a near 15-year high in the first quarter of 2019, highlighting the enormity of President Cyril Ramaphosa’s plans to recover the country’s economy.

Ramaphosa said he wants to lead the country out of “nine wasted years”, a tacit reference to his predecessor Jacob Zuma’s term in office, which was marked by increasingly brazen corruption and state capture. Under Zuma’s watch unemployment soared and economic growth faltered, while confidence in the SA economy fell to new lows.

Read the full article here: https://www.businesslive.co.za/bd/economy/2019-05-14-soaring-joblessness-weighs-on-ramaphosa-presidency/

By Tehillah Niselow for Fin24

The official unemployment rate increased by 0.5% to 27.2% in the second quarter of 2018, up from 26.7% in the first three months of the year.

Statistician-General Risenga Maluleke released the Quarterly Labour Force Survey for April, May and June in Pretoria on Tuesday.

The increase in the unemployment rate was due to a decline of 90 000 people in employment, as well as an increase of 102 000 people who became unemployed. Additionally, the number of discouraged job seekers rose to 2.9 million people, between the first and second quarters of 2018.

Manufacturing has lost 55 000 jobs year-on-year, and Maluleke said that basic metals and food production were the main drivers of the employment losses in the sector.

The industry hardest hit by job losses was manufacturing, with 105 000 people becoming unemployed in that sector in the second quarter. Community, social and services recorded a 93 000 jobs contraction, and 57 000 employment positions were cut in trade.

The transport sector accounted for the largest increase in jobs, with 54 000 new positions in the second quarter, while mining added 38 000, private households 22 000 and utilities increased by 18 000.

Of the 20.2 million South Africans aged 15 to 34 years, the number of young people not in employment, education and training (NEET) increased by 0.4% in the second quarter year-on-year.

This rate increased for black African males and white males. The female rates of NEET was recorded at over 40% among black African females aged 15 to 34 years old.

“Black women are the most vulnerable when it comes to unemployment,” Maluleke said.

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