Don’t expect SA jobs lost to Covid-19 lockdown to bounce back: study

The second wave of the National Income Dynamics Study (NIDS) covering the impact of the Covid-19 pandemic and lockdown on the South African jobs market shows that none of the approximately 3 million lost since the onset of the pandemic had returned by June.

Between February and April 2020, the wave 1 Coronavirus Rapid Mobile Survey (CRAM) data indicates that the percentage of those not employed increased from 43% to 53% (13.7 million people to 16.5 million).

Wave 2 data shows that the number has not changed from April to June, despite the easing of lockdown.

“The evidence to date suggests that these losses may be long lasting. Wave 3 and Wave 4 data should shed more light on the permanence of these losses,” the researchers said.

The NIDS CRAM is a study conducted by a national consortium of 30 social science researchers from local universities, as well as groups like the Human Sciences Research Council and the Department of Education.

The project exists to collect, analyse and disseminate data on a broadly representative sample of South African individuals, and to report on their employment and welfare in light of the Covid-19 pandemic.

The latest wave of data shows that the despite some bounce-back in jobs – particularly for furloughed workers – the situation is far from reversed.

The number of furloughed workers has returned to pre-Covid levels, the group said, with half of furloughed workers being ‘re-employed’. However, 40% of the workers have become unemployed.

Wave 1 indicated that over and above the 3 million job losses between February and April, an additional 1.4 million people (4.6% of working age adults) were furloughed – i.e. they did not work and did not get paid but said they had a job to return to).

In June, this additional group of furloughed workers have almost disappeared, with the number of workers on furlough returning to their February levels.

Only half (54%) of furloughed workers in April were ‘re-employed’ in June, while nearly 40% fell into non-employment with the remainder still being furloughed in June.

Maintaining some form of employment relationship seems to have been crucial for recovering employment, the researchers said.

More worryingly, although most groups experienced some ‘bounce-back’ between April and June, employment levels in the country remain well below February levels. The lowest levels and slowest recoveries were experienced by disadvantaged groups, the consortium noted.

Bounce-back of furloughed workers was experienced across industries, but concentrated in services, sales, elementary occupations and craft industries.

Among those that reported having an employment relationship there was a sharp increase in non-furloughed workers between April and June with the largest increases in services and sales (+17 percentage points), elementary occupations (+15 percentage points), and craft and related occupations (+11 percentage points).

Jobs data

While the NIDS CRAM covers the period since the onset of the Covid-19 lockdown, its findings are in line with the latest Quarterly Labour Force Survey data for the second quarter, published by Stats SA this week.

Stats SA’s data showed that 2.2 million people had lost their jobs during the quarter – an unprecedented change, and the largest quarter one to quarter two decline since the survey began in 2008.

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).

The data also marks the point where the economically inactive (20.6 million) outweigh the labour force (18.4 million).

While alarming, the data was not unexpected, the stats body said.

“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.

Responding to the data, president Cyril Ramaphosa said that South Africans must work together to ensure a rapid rebound in employment following the release of the latest employment figures.

“Our success in responding to this unprecedented crisis will be measured by the speed of our labour market recovery.

“In addition to the relief measures we have already implemented, we must ensure that every job lost during the crisis is replaced and that more jobs are created so that we can meaningfully reduce unemployment,” he said.

Structural reforms, investment in infrastructure and other measures to grow the economy, the president said, will play a crucial role in supporting the recovery of the labour market in the medium term.

Read: Jobs rebound in South Africa: we are working on it, says Ramaphosa