South Africa’s unemployment rate rose by one percentage point to 30.1% in the first quarter (January-March) of 2020 compared to the fourth quarter of 2019. The expanded unemployment rate was 39.7%.
According to the latest Quarterly Labour Force Survey released by Statistics SA on Tuesday, employment decreased by 38,000 to 16.4 million while unemployment increased by 344,000 to 7.1 million.
Statistician-General Risenga Maluleke said, “The South African working-age population increased by 147,000 to 38.9 million and the labour force increased by 306,000 to 23.5 million.
“The number of discouraged work-seekers increased by 63,000 and those who were not active in the labour market for other reasons other than discouragement decreased by 222,000 resulting in a net increase of 107,000 in the number of those who were not economically active.”
Formal sector, agriculture shed jobs
The net decline in employment in the first quarter was driven mainly by the formal sector, which shed 50,000 jobs, and agriculture, which lost 21,000 jobs.
Employment in the informal sector increased by 3,000 while private households employed 30,000 more people during this period.
Job losses were registered across most industries, including Finance (50,000), Community and social services (33,000), Agriculture (21,000), Transport (17,000), Manufacturing (15,000), Construction (7,000) and Utilities (4,000).
3.5 million young people aged between 15-24 years were not in employment, education or training (NEET), an increase of 2.1% compared to the fourth quarter of 2019. This figure rises to 8.5 million young people in the 15-34 years age group.
Impact of COVID-19
The unemployment rate usually increases between quarter four and quarter one each year. South Africa went into nationwide lockdown at the end of March, which means the full impact of COVID-19 is not reflected in the Survey’s figures.
Last week, a number of major companies, such as fashion retailer Edcon, SA Broadcasting Corporation (SABC) and mobile operator Cell C, announced plans to retrench employees.
In his newsletter on Monday, President Cyril Ramaphosa said this is evidence that predictions of job losses and business shutdowns caused by the pandemic are beginning to materialise. However, he urged companies to strike a balance between business sustainability and jobs.
He said, “We would urge that the difficult decisions to be taken are taken with care and with due regard to balancing the sustainability of companies and the livelihoods of workers. It is important that whatever is done is underpinned by ensuring a just transition to all concerned.
“The measures we put in place to protect local businesses during the lockdown in the form of loans, tax relief, debt restructuring, extended credit lines and retail rental exemptions are continuing to provide vital support.”