South Africa unemployment hits highest point on record

Stats SA has published the latest unemployment numbers for the fourth quarter of 2020, showing that South Africa’s unemployment rate has hit its highest point since the Quarterly Labour Force Survey (QLFS) was started.

The results of the QLFS show that around one million people moved from the ‘not economically active’ segment of the population – which is broadly defined, but includes those who lost work during the Covid-19 lockdown – back into the workforce.

However, the split between those who returned to employment and those who are now classified as unemployed, leans heavily towards the latter.

The number of employed persons increased by 333,000 to 15 million in the fourth quarter of 2020, it said. Meanwhile, the number of unemployed persons increased by 701,000 to 7.2 million compared to the third quarter of 2020.

Compared to the same period in 2019, there were 1.4 million more unemployed people in the country.

The number of discouraged work-seekers increased by 235,000 (8.7%), and the number of people who were not economically active for reasons other than discouragement decreased by 1.1 million (7.4%) between the two quarters, resulting in a net decrease of 890,000 in the not economically active population.

StatsSA reported that 140,000 new people entered the labour force over the period.

To better understand the key labour market indicators between Q3: 2020 and Q4: 2020, special tabulations were done to study movements between labour market status categories.

Stats SA observed that a large number of people moved from the “other not economically active” category to “employed” and  “unemployed” status (i.e. labour force) between the two quarters.

The movement was proportionately more towards the unemployed than for the employed, which resulted in a significant increase of 1.7 percentage points in the official unemployment rate to 32.5% – the highest since the start of the QLFS in 2008.

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

Employment gains were observed across all industries with the exception of mining and finance.

The largest employment increases were observed in the formal sector (189,000), followed by private households (76,000), the informal sector (65,000) and the agricultural sector (2,000) in Q4: 2020.

Read: Alexander Forbes lays bare South Africa’s unemployment reality