Stats SA third-quarter data shows rise in unemployment

South African unemployment jumps 52 percent in the third quarter of 2020.

Stats SA’s Quarterly Labour Force Survey (QLFS) results for the third quarter of 2020 demonstrate the impact of the national lockdown on jobs in South Africa.

Unemployment increased substantially by 2.2 million or 52.1 per cent to 6.5 million, compared to the second quarter of 2020.

The number of discouraged work seekers increased by 225,000  or 9.1 percent, and the number of people who were not economically active for reasons other than discouragement decreased by 2.9 million or 15.8 percent between the two quarters.

Stated simply, of the 2.85 million people who fell out of the country’s workforce during lockdown, only 543,000 managed to get their jobs back, leaving 2.2 million unemployed, and 225,000 joining the group of discouraged work seekers. Most job losses were observed in trade, which lost 400,000 jobs, manufacturing lost 300,000, community and social services  lost 298,000 and construction lost 259,000 jobs.

The survey indicates large movements out of the “other not economically active” category to “employed” and “unemployed” between quarters two and three.

The number of employed persons increased by 543,000 to 14.7 million compared to the second quarter of 2020 and  employment remains nearly 1.7 million below the level in Q3 2019.

This more clearly shows how the lockdown affected jobs in the country. In the second quarter data, Stats SA handled the jobs lost due to the lockdown by removing them from the workforce, rather than classifying them as unemployed. This had the effect of decreasing the country’s unemployment rate to 23.3 percent.

With that classification now feeding into more typical “employed” and “unemployed” categories, the country’s narrow definition of unemployment moved to 30.8 percent with the broader definition, which includes discouraged work seekers, at 43.1 percent.

The movement from Q2’s classification  was proportionately more towards the unemployed than for the employed, Stats SA said.

The survey shows an encouraging recovery with employment increasing in all industries, except utilities and transport. The industries that gained jobs were finance with 200,000 jobs, community and social services increased by 137,000 and private households added 116,000 jobs.

Compared to the third quarter in 2019, employment contracted in all industries except mining, where it remained unchanged in Q3 2020.