The unemployment figures are even worse than they appear to be

The unemployment figures are even worse than they appear to be

Alternative Information and Development Centre Statement, 24 February

Ahead of the 2021 Budget Speech, the latest Quarterly Labour Force Survey (QLFS) figures released by Stats SA paint a gloomy picture. The number of unemployed people in South Africa for the fourth quarter of 2020 now stands above 7,2 million. This official unemployment rate is now at 32.5%, the highest recorded level since the QLFS started in 2008. While these figures are startling in their own right – it is not a true representation of the depth of the crisis we all know the country is grappling with. 

A closer look at the figures paints an even gloomier picture. The unemployment rate, according to the expanded definition of unemployment, now stands at 42.6%. This definition includes workers who have had their hope of finding a job smashed, so much so that they have given up even trying to look for work. The number of these “discouraged work-seekers” increased by 234 000 from the third quarter of 2020 (up by 8,7%), to over 2,9 million. The inclusion of these discouraged workers in the unemployment rate, means that currently only six out of every ten people that are able to work in South Africa have a job.

It is clear that the pandemic is partly to blame for the crisis of unemployment, but the decline of 1.4 million jobs in the last year is only an exacerbation of a crisis that already existed. The unemployment crisis is a longstanding one: besides the legacy of apartheid, this is the product of macroeconomic policies that have been fixated on export-led growth and attracting foreign direct investment.

This unemployment crisis is like a virus, underpinning many of the social ills we see in society, including incomparably high levels of inequality. It undermines the social fabric of society and contributes to increased levels of crime, violence, xenophobia, and other social tensions. The government’s implementation of budget cuts alongside the increased liberalisation of the SA economy and other austerity measures will only result in the deepening of the unemployment crisis in the country. Even more retrenchments can be expected, especially in light of the imposed cuts on the public sector wage bill of R160 billion over the next three years. With that will come even higher levels of unemployment and increased strain on the social fabric.

To address the crisis requires the immediate implementation of a dignified Basic Income Grant (BIG), this should be coupled with a government employment guarantee programme that is geared towards providing public services. To this end, the government should address the unemployment crisis directly by employing everyone willing and able to work, and paying them a living wage. The time for indirect measures aimed at “growth” and targeting “foreign direct investment” must end. The government must implement a BIG and the Right2Work to address the unemployment virus in the country. We cannot afford not to do so. 

For more information please contact:

Greg Dor – greg@aidc.org.za

Rekang Jankie – rekang@aidc.org.za