Tag: unemployment

34.4% of SA’s labour force is unemployed

By Robin-Lee Francke for IOL

The latest Quarterly Labour Force Survey (QLFS) for the second quarter of 2021 has been released by Statistics South Africa and it paints a grim picture.

The household-based sample survey collects data on the labour market activities of individuals aged 15 years and older who live in South Africa.

However, this report only covers labour market activities of persons aged 15 to 64 years.

The report revealed a new record high of 34.4% of the labour force in South Africa as being unemployed.

The number of employed persons decreased by 54 000 in the second quarter to 14.9-million.

The number of unemployed persons increased by 584 000 to 7.8 million compared with the first quarter of 2021.

The report also revealed that the number of discouraged work seekers increased by 5.9% (186,000 people) and the number of people who were not economically active for reasons other than discouragement decreased by 4.5% (571 000 people).

Stats SA said that between the two quarters of 2021 there was a net decrease of 386 000 people not economically active within the population.

It said the changes in the second quarter resulted in the official unemployment rate increasing by 1.8 percentage points from 32.6% in the first quarter of 2021 to 34.4% in the second quarter of 2021.

Stats SA said this was the highest since the start of the QLFS in 2008.

It said the unemployment rate according to the expanded definition of unemployment increased by 1.2 percentage points to 44.4% in the second quarter of 2021 compared with the first quarter.

While only employment decreases were observed in the formal sector, employment gains were reported in the informal sector with an increase of 184 000 in total.

The agricultural sector saw an increase of 69 000 jobs and private households 67 000 jobs.

 

SA lost half a million formal-sector jobs

Source: News24

South Africa lost 552 000 formal-sector jobs in the year to end-March, the latest quarterly employment statistics (QES) from Statistics South Africa (Stats SA) show.

In the first quarter of 2021, total employment in the formal non-agricultural sector declined to 9.644 million, which was 5.4% less than in March 2020. The number of full-time jobs fell by even more (-6.5%), while part-time employment increased by 47 000 or almost 5% year-on-year between March 2020 and March 2021.

The total number of jobs also declined compared to the last quarter of 2020 and the first quarter of 2021 – by 9 000 posts – from 9 653 000 in December 2020 to March 2021.

The biggest falls in employment during the first quarter were in trade, construction and electricity, but community and social services, mining and manufacturing saw employment gains.

Total gross pay earned by South Africans fell by 1.9% between March 2020 and March 2021.

The South African economy has been hit hard by the pandemic, and many businesses were not allowed to operate for months during the hard lockdown last year. The SA GDP numbers for the first quarter of 2021 showed that the economy was 3.2% smaller than the same quarter a year ago.

SA’s jobless grows to 7.2m

By Siphelele Dludla for IOL

South Africa’s unemployment rate increased by 1.7 percentage points to an unprecedented 32.5 percent in the fourth quarter of 2020 compared from 30.8 percent in the previous quarter.

This is the highest jobless rate since the start of the Quarterly Labour Force Survey (QLFS) in 2008, with more people entering the labour market and actively looking for jobs.

The unemployment rate according to the expanded definition of unemployment, however, decreased by 0.5 of a percentage point to 42.6 percent in the fourth quarter compared to the third quarter.

Statistics South Africa (StatsSA) said that the number of unemployed persons increased by 701 000 to 7.2 million compared to the third quarter of 2020.

StatsSA said the number of discouraged work-seekers increased by 235 000, or 8.7 percent.

The number of people who were not economically active for reasons other than discouragement decreased by 1.1m between the two quarters, resulting in a net decrease of 890 000 in the not economically active population.

The QLFS also showed that the number of employed persons increased by 333 000 to 15 million in the fourth quarter of 2020

StatsSA said this resulted in an increase of 1 million in the number of people in the labour force.

The statistics agency said employment increased in all sectors in the fourth quarter, with formal and informal sector employment, private households and agriculture all recording positive outcomes.

The formal sector in South Africa accounts for 69.9 percent of total employment.

StatsSA said that trade, construction and agriculture had higher employment shares relative to their gross domestic product (GDP) contribution.

Employment increased in all industries, except finance and mining, with community and social services, construction recording the most gains.

 

By Mike Schüssler and Phumlani Majozi for IOL

Nearly 1.4-million formal and informal jobs are at risk in the South African economy with the present Level 3 restrictions impacting directly across at least seven sectors.

The sectors are travel, tourism, entertainment, leisure, manufacturing, agriculture, and services that are not elsewhere classified.

The total number of people employed across these sectors equates to one in 12 jobs being directly at risk of destruction. If one includes family and dependants as a reflection of the normal size of households, the level 3 restrictions could impact millions more as they rely on the breadwinner’s wages.

As many also help dependants outside the immediate family, the overall number of people impacted could be as much as 10 percent of the South African population.

Remember, too, that South Africa is often credited with the highest unemployment rate in the world. The impact will be felt even if only half of the jobs at risk are destroyed.

Some provinces, such as the Western and Northern Cape, have even higher numbers: One in six jobs in the Western Cape and one in five in the Northern Cape are at risk.

While the Eastern Cape has only one in 13 jobs at risk, the impact could be greater as the provincial extended unemployment rate could increase to close to 60 percent. Measured differently, the risk for the Eastern Cape is that only one in four adults will have a job if the jobs at risk are destroyed.

While metropolitan unemployment rates are generally lower than rural unemployment rates, all eight metros in the country could end up with extended unemployment rates above 40 percent.

One, Nelson Mandela Bay, would have an unemployment rate of more than 50 percent. Two others, Mangaung and Ekurhuleni, could have unemployment rates of close to 50 percent.

Limpopo and the Eastern Cape already have the highest unemployment rates in the country, so any, even a small, increase would have a devastating impact.

Overall, South African unemployment could rise from 43.1 percent to 51.6 percent within a year, driven by the potential level 3 job losses. And increasing job seekers.

In addition to these unacceptable job losses, the level 3 restrictions are having detrimental repercussions for the turnover of industry as well.

The formal private sector turnover of the industries impacted by the restrictions was R69 billion a month in 2019. The formal private sector is at risk of losing 8.1 percent of its turnover every month that the restrictions remain, using annual financial statistics.

The estimated impact across these sectors is a reduction of at least 60 percent in turnover. This means that R41.4bn is lost every month that the restrictions remain.

The formal salaries paid to employees in these sectors is R9.6bn per month. Personal income tax is estimated at R1.5bn per month. Adding agriculture and informal employee income would be close to R10.5 million.

The knock-on impact can be seen by the fact that these industries buy R38.7bn worth of goods from other sectors every month, and spend R1.5m on advertising as well as fixed costs such as rent, leases, and interest of R4.6bn per month.

Moreover, these sectors pay R7.6bn in taxes every month (excluding employees’ PAYE mentioned above).

These taxes are made up of VAT, excise duties and company taxes.

The total taxes combined are well over R9bn for the formal sector alone per month. Adding things like passenger taxes and tourism spend along with the informal sector VAT spend, the impact of the level 3 restrictions on the fiscus is certainly well over R10bn a month.

The fact that the government extracts more than R10bn a month from these industries during normal times, but cannot find any funds to help them when they are in trouble, is economically short-sighted.

Keeping these businesses alive and operating as far as possible, while they take precautions against the Covid-19 pandemic, will help pay for the now bigger deficit even in the short-term.

Over a maximum period of six years, a relief package that helps the whole industry for three months at a rate of just more than R10bn will have been more than paid back.

Government relief on that scale will also mean that banks will be more likely to help restructure repayments, and suppliers would also be able to help with more finance, too.

Moreover, paying employees extra via the Temporary Employee/Employer Relief Scheme would also help greatly. No one can go 10 months with reduced earnings as a result of harsh restrictions without any government relief.

The government has a moral duty to not cause business failure, as well as to avoid mass hunger. It must immediately open the economy up again and allow businesses to take the necessary hygienic precautions without undue interference.

 

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.

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