Big trouble for domestic workers in South Africa

The latest employment data from Stats SA shows that the jobs crisis for domestic workers in South Africa continues, with thousands of jobs lost over in the latest quarter.

According to Stats SA, 7,000 domestic worker jobs were lost in the first three months of 2024, taking the total number of workers employed to 869,000.

Positively, there are far more domestic workers employed compared to the same time in 2023—a 9.1% increase year on year from 797,000 in Q1 2023—but this is is till about 150,000 fewer than before the Covid-19 pandemic at the start of 2020.

Pre-Covid-19, South Africa employed over 1 million domestic workers. Industry reports pointed to around 250,000 domestic workers losing their jobs during the pandemic.

By the end of 2023, only around 125,000 of those jobs had been recovered—a 50% recovery rate.

The latest employment data has further dented this, meaning around 132,000 domestic worker jobs are still lost, and total employment is still around 20% lower than pre-pandemic levels.

The data coincides with new median earnings data from Stats SA, which shows that domestic workers also have the lowest median salaries in the country, coming in at around R2,350 a month.

The trouble domestic workers does not look like it will be ending any time soon, with households—the biggest employers of domestic workers—under financial pressure.

The latest DebtBusters Debt Index for the first quarter of 2024 shows that persistently high interest rates and inflation – especially food inflation – continue to erode households’ disposable income, while a lack of any meaningful economic growth is constraining salaries.

As a result, South Africans’ debt-service burden is now incredibly high, with households using 62% of net income to repay debt – and the situation is worse amongst higher-income earners.

These sticking points for private households are likely to stick around for much of the year, with interest rate cuts only expected at the end of 2024 or early 2025, while risks to inflation persist.

Unemployment in South Africa

The drop in domestic worker jobs comes as South Africa’s unemployment rate deteriorated in the quarter.

South Africa’s official unemployment rate increased to 32.9% in the first quarter of 2024 from 32.1% logged in the final quarter of 2023.

Although the rate has improved moderately from levels logged during the pandemic— where it reached 35.3% in Q4.21— it remains at an elevated level.

The number of employed persons increased by 22,000 during the quarter, while those categorised as unemployed climbed by 330,0000 to 8.2 million in Q1.

Despite the uptick in unemployment, FNB said that the outlook remains positive for a marginal job increase throughout this year.

“This is supported by our economic growth forecast, which is expected to rise from below 1% last year to 1.2% this year, lifting to 1.5% in 2025 and 1.6% in 2026,” the group said.

“However, we are concerned about the structural constraints on growth that have led to economic growth projections significantly lower than the 5.2% average annual growth realised between 2004 and 2007. During that period, the unemployment rate trended downward, highlighting the significant differences between past growth rates and current projections.

“Addressing these structural constraints will be critical to achieving sustained economic growth and reducing unemployment rates in the long term,” it said.

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