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Coronavirus Exacerbated South Africa’s Unemployment Challenges

South Africa, the unemployment rate has risen to 30.8% in the third quarter of 2020, up from 29.1% recorded a year ago and an increase of 7.5% compared to the previous quarter, according to the country’s National Statistics Agency report.

This number is the highest the country has experienced on record since the outset of the Quarterly Labour Force Survey in 2008. Despite the fact that, the unemployment rate of 30.1 percent was up from 29.1 percent in the last quarter of 2019.

The country’s economy was already in recession before the pandemic hit. The southern African country, one of the most industrialized in Africa, was among the first to record a case of COVID-19 on the continent. In response to the pandemic, authorities imposed a strict lockdown and national state of disaster on March 2020, further squeezing businesses and consumers.

Deep down: South Africa’s Economy in Recession

The data from Statistics South Africa showed that the number of employed persons increased by 543,000 to 14.7 million in the third quarter of 2020, and the number of unemployed persons increased by 2.2 million to 6.5 million compared to the second quarter of 2020.

This resulted in an increase of 2.8 million in the number of people in the labour force. Between July and September 2.2 million more people were listed on the unemployment list. The 15-24 age group was the most affected as unemployment rose the most within this age group.

South Africa: Employment and Labour on Critical Role Played by Entities during COVID-19 Pandemic- Report

Total employment only decreased in utilities (-23 thousand) and transportation (-7 thousand), but rose mostly in trade (62 thousand), finance (200 thousand), community and social services (137 thousand) and private households (116 thousand). The expanded definition of unemployment, including people who have stopped looking for a work, was at 43.1%, up from 42% in the prior period.

Economic Impact of COVID-19 in Sub-Saharan Africa

Of the 14.7 million persons who were employed in the third quarter of 2020, 73.2% were expected to work during the national lockdown by the companies/organisations they work for. Those who worked were predominately men in most industries, except in the community and social services sector and private households, where the majority were women. Approximately nine out of ten people employed within the construction industry who worked during the lockdown were men.

Compared to the second quarter of 2020 where 17.0% indicated that they worked from home, this proportion declined to 10.9% in the third quarter of 2020. Working from home was more prevalent in Gauteng and Western Cape and among Professionals and Managers (indicative of access to tools of the trade to facilitate work from home for these workers).

Unemployment Insurance Fund pays out R15bn in South Africa

The majority of those in employment continued to receive pay during the lockdown. However, those with lower levels of education were more likely to receive reduced salaries than those with higher levels of education, the labour force survey found.

Nevertheless, despite the increase in the number of discouraging work-seekers (up by 9.1% over the quarter), the number of people who were not economically active for causes other than discouragement decreased by 2.9 million between the two quarters, resulting in a net reduction of 2.6 million in the not economically active population.

A discouraged jobseeker is defined as someone who wants to work but there are no jobs in the area; they were unable to find work that required their skills, or they have lost hope of finding any kind of work.

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