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The Unemployed in South Africa Could Remain Unemployed for a Very Long Time

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Johannesburg- Sunburst Africa–Unemployment continues to grow- dampening any hopes of finding a job for those who are unemployed at the moment especially those who have never been employed in South Africa.

According to data released by Statistics South Africa (StatsSA) yesterday, the  South African economy had a net decrease of 28,000 people  (in the number of employed persons).

The results of the Quarterly Labour Force Survey (QLFS) for the first quarter of 2021 show that the number of employed persons remained almost unchanged at 15,0 million (a slight decrease of 28 000) in the first of quarter 2021. The number of unemployed persons also remained almost unchanged at 7,2 million compared to the fourth quarter of 2020 (increased by 8 000). The number of discouraged work-seekers increased by 201 000 (6,9%), and the number of people who were not economically active for reasons other than discouragement decreased by 38 000 (0,3%) between the two quarters, resulting in a net increase of 164 000 in the not economically active population.

These minor changes resulted in the official unemployment rate increasing by 0,1 of a percentage point from 32.5% in the fourth quarter of 2020 to 32,6% in the first quarter of 2021 – the highest since the start of the QLFS in 2008. The unemployment rate according to the expanded definition of unemployment increased by 0,6 of a percentage point to 43,2% in quarter 1 2021 compared to quarter 4 2020.

With the over 7 million unemployed South Africans and little changes in employment prospects, the future is dark for the employed for the following reasons:

Firstly, it is more difficult to find a job in South Africa especially if you have never worked. This is made worse by the fact that many companies are closing down, others reducing staff and many moving online due to Covid-19. This trend of reducing labour force might continue as companies continue to readjust due to Covid-19 in the long term. Manufacturing production has also performed so poorly in 2020 dashing any hopes of increased employment in the sector in the short term.

Secondly, the power crisis facing Eskom will compound the unemployment problem. The state owned power producer- Eskom is in multiple crisis including operational crisis, financial crisis and governance issues among others. This has reduced prospects of any expansion in various sectors of the economy as there will be no sufficient power to allow for such.

Thirdly the problem of demand and supply mismatch in the labour market continues to compound the unemployment problem. While there are many trained graduates- many of their skills are not what is required by industry. Enough of the bad news. If you are employed in the formal sector in South Africa- things have gotten better for you. Let’s look at why I say so.
According to StatsSA, gross earnings decreased between the quarters  June 2020 and September 2020.

This indicates that things have gotten worse for the employed and the fall in inflation and oil prices leaves some cash in the hands of the employed to spend during this festive season.

However, there is little hope for the unemployed in South Africa as the economy continues to shrink and employers are reducing jobs. There is need for urgent rethink about where the jobs of 2021 will come from.

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