Unemployment in South Africa hits highest on record

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Stats SA has released the latest unemployment figures for the fourth quarter of 2020, showing that the unemployment rate in South Africa has reached its highest level since the launch of the Quarterly Labor Force Survey (QLFS).

QLFS results show that around one million people have left the ‘non-economically active’ segment of the population – which is broadly defined, but includes those who lost their jobs during the Covid-19 lockdown – to return to the job market.

However, the divide between those who have returned to work and those who are now classified as unemployed, leans strongly towards the latter.

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The number of people employed increased from 333,000 to 15 million in the fourth quarter of 2020, he said. At the same time, the number of unemployed increased from 701,000 to 7.2 million compared to the third quarter of 2020.

Compared to the same period in 2019, there were 1.4 million more unemployed people in the country.

The number of discouraged job seekers increased by 235,000 (8.7%) and the number of people who were not economically active for reasons other than discouragement decreased by 1.1 million (7.4%) between the two quarters, i.e. a net decrease of 890,000 in the non-economically active population.

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According to StatsSA, 140,000 new people entered the workforce during the period.

To better understand the main indicators of the labor market between Q3: 2020 and Q4: 2020, special tables have been produced to study the movements between categories of status in the labor market.

Stats SA observed that a large number of people moved from the “other not economically active” category to the “employed” and “unemployed” (ie the working population) status between the two quarters.

The movement was proportionally more towards the unemployed than the salaried workers, which translated into a significant 1.7 percentage point increase in the official unemployment rate to 32.5% – the highest since the start of the QLFS in 2008.

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The unemployment rate according to the broad definition of unemployment fell 0.5 percentage points to 42.6% in the fourth quarter from the third quarter.

Employment gains were observed in all industries except mining and finance.

The largest increases in employment were observed in the formal sector (189,000), followed by private households (76,000), the informal sector (65,000) and the agricultural sector (2,000) in Q4: 2020.


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