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More damage to South Africa’s labour market as unemployment hits new high

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Source: Ray Mahlaka, Business Maverick, 23 February 2021, photo credit: Shutterstock/Rawpixel/Skills and Work – WordPress.com

According to Statistics SA, the country’s official unemployment rate during the fourth quarter of 2020 rose by 1.7 percentage points from the previous quarter to a record high of 32.5%.

SA’s official unemployment rate hit a fresh high in the fourth quarter of 2020, with signs emerging that even though Covid-19 lockdown rules were substantially eased during the period, the country’s labour market faces permanent and worrying damage.

Although many sectors of the economy were open during the fourth quarter, which paved the way for economic activity to pick up and unemployed people to search for jobs, SA’s unemployment crisis continued to worsen.

The crisis – aggravated by a Covid-19 lockdown that is nearly a year old – poses a headache for President Cyril Ramaphosa’s government, which is arguably bereft of ideas on how to create jobs, while balancing efforts to grow the economy and manage a deteriorating fiscus.

According to Statistics SA, the country’s official unemployment rate during the fourth quarter of 2020 rose by 1.7 percentage points from the previous quarter to a record high of 32.5%. In other words, the number of people who joined the unemployment queue in the fourth quarter increased by 701,000 – bringing the number of unemployed people in SA to 7.2 million.  

Statistics SA said the official unemployment rate of 32.5% is the highest since the data collection agency began measuring unemployment trends in 2008 through a redesigned survey called the Quarterly Labour Force Survey.

The latest unemployment figures suggest that the Covid-19 lockdown has made it more difficult for job seekers to find an entry point into the labour market and for struggling businesses to create employment.

The figures also indicate that the number of jobs lost due to the lockdown won’t bounce back as robustly, because SA’s economy is still in the doldrums, low business confidence is persisting, and the government isn’t moving with speed to implement pro-growth structural reforms. 
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