South Africa’s unemployment increased 1.7 percentage points to 32.5% (7.2 million people) in the fourth quarter of 2020, representing the highest unemployment rate recorded in 12 years.
The number of unemployed people increased by 701 000 to 7.2 million in the final quarter of 2020 following an increase of 2.2 million people in the previous quarter.
According to the expanded definition of unemployment, however, the unemployment rate decreased by 0.5 percentage points to 42.6% in quarter four of 2020. This means 11.1 million in the country are unemployed.
The expanded definition of unemployment refers to people who were available to work but did not look for work either because they are discouraged from looking for work or did not look for work for other reasons other than discouragement.
The number of discouraged work-seekers increased by 234 000 (up by 8.7%) and the number of people who were not economically active for reasons other than discouragement decreased by 1.1 million between Q3 and Q4 of 2020.
The increase in the unemployment rate coincided with the easing of lockdown restrictions which allowed for travelling and allowed for people to actively look for employment compared to the second quarter of 2020 when the country was under a hard lockdown which prevented movement.
Of the 15 million people who were employed in quarter four of 2020, almost eight out of ten people (78.3%) were expected to work during the national lockdown by the companies or organisations they work for.
“Those who actually worked were predominately men in most industries, except in the community and social services sector and private households, where the majority were women. About nine out of ten people employed within the Construction industry who worked during the lockdown, were men,” Stats SA said in a statement.
The largest employment increases were recorded in the formal sector (189 000), private households (76 000), the informal sector(65 00) and the agricultural sector (2000).
There were employment increases in all industries, except finance and mining. The industries which gained the most jobs were community and social services (170 000)and construction (86 000).
“Compared to quarter 4 2019, employment contracted in all industries. Most job losses were observed in finance (256 000), Community and social services (241 000) and Manufacturing (230 000),” Stats SA said.
Covid-19 and the lockdowns continued to impact on the data collection from Stats SA. The entity continued to collect data telephonically in the 4th quarter of 2020, unlike the usual face-to-face interviews
As such, data could not be collected from the full sample but only from households for which contact numbers were available.
The entity also continues to feel the strain of the R200 million which was slashed from its budget in last year’s Supplementary Budget. Statistician-general Risenga Maluleke told Moneyweb that although the budget cuts affected the entity’s operations, the collection of “basic data” such as GDP and employment remains unaffected.
Maluleke however warned that in the long term, the entity may experience challenges in its data collection due to the budget cuts.