Stats SA has published its latest Quarterly Labour Force Survey for the three months to June 2020, revealing that the number of employed persons decreased by 2.2 million to 14.1 million in Q2: 2020 compared to Q1: 2020.
This unprecedented change is the largest quarter one to quarter two decline since the survey began in 2008, the statistics body said in a statement on Tuesday (29 September).
The largest employment decreases were observed in the formal sector (1.2 million), followed by the informal sector (640,000), private households (311,000) and the Agricultural sector (66,000).
Compared to a year ago, total employment decreased by 2.2 million, the number of unemployed persons decreased by 35.5% (2.4 million) and the number of persons who were not economically active increased by 33.1% (5.1 million).
“Contrary to what one might expect in the face of such a large decline in employment, unemployment declined substantially as well – decreased by 2.8 million to 4.3 million compared to Q1: 2020, resulting in a decrease of 5.0 million (down by 21,4%) in the number of people in the labour force,” the group said.
The number of discouraged work-seekers, like the number of unemployed, decreased by 447,000, and the number of people who were not economically active for reasons other than discouragement increased by 5.6 million between the two quarters, resulting in a net increase of 5.2 million in the not economically active population.
Because of the removal of the 5 million-plus people from the workforce, Stats SA said the ‘official’ unemployment rate actually decreased to 23.3%. However, the broader definition of unemployment puts the rate higher at 42%.
The data also marks the point where the economically inactive (20.6 million) outweigh the labour force (18.4 million).
“A decline in employment, accompanied by a larger increase in inactivity other than in unemployment has been observed in most countries across the world, except Canada and the United States of America 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.
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 Reserve Bank said on Tuesday.
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.
“Growth in the formal non-agricultural nominal remuneration per worker was restrained by the recessionary conditions in the first quarter of 2020, with remuneration growth slowing in both the public and the private sector.
“Year-on-year growth in nominal unit labour cost in the formal non-agricultural sector moderated to 4.5% in the first quarter of 2020, while labour productivity continued to contract.”