Job losses due to coronavirus pandemic will take several years to recoup: Economist

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Economist Jeff Schultz says it will take several years for the local economy to recoup employment losses triggered by the impact of the coronavirus pandemic.

Figures released by Statistics SA on Thursday show that the country’s unemployment rate jumped from 23.3% to 30.8% in the third quarter.

South Africa’s unemployment rate increased by 7.5 percentage points in the third quarter of the year compared with the second quarter. This is the highest unemployment rate recorded since 2008.

The sectors that lost most jobs were electricity, water and transport while finance, private household and constructions created some jobs.

SA’s unemployment rate increased to 30.8% in the third quarter: 

According to Stats SA, the results indicate that the number of employed persons increased by 543 000 to 14.7 million in the third quarter of 2020, and the number of unemployed persons increased by 2.2 million to 6.5 million compared to the second quarter of 2020. This resulted in an increase of 2.8 million in the number of people in the labour force.

Stats SA says in spite of the increase in the number of discouraged work-seekers is up by 9.1%, the number of people who were not economically active for reasons other than discouragement decreased by 2.9 million between the two quarters, resulting in a net decrease of 2.6 million in the not economically active population.

Schultz says the numbers reflect the current poor state of the economy.

“It highlights that the labour market is under pressure alongside the economy which will take many years to recoup the losses that it has experienced this year. Challenging times ahead for the SA consumers and more reason to get the policy right so that we get the economy growing again and ultimately becoming labour absorbent.”

Stats SA releases the latest Quarterly Labour Force Survey: 

Infographic on unemployment stats: