South Africa’s fragile economy shed almost 120,000 jobs, a fall of 1.2%, in the second quarter, according to the latest Quarterly Employment Statistics (QES). The bottom line is that employment remains below the dismal levels recorded before the pandemic.
The Quarterly Employment Statistics, released by Statistics South Africa (Stats SA) on Tuesday, showed that total employment in the three months to June fell by 119,000 to 9,948,000, from 10,067,000 in March.
Stats SA estimated in June that the country’s population was just over 60 million, with roughly one in six South Africans has a paying job in the formal sector.
Put another way, five out of six don’t. This explains why many, and probably most, breadwinners in South Africa have multiple dependants, and even taxpayers with no offspring or immediate dependants are carrying the can for the rest. If so much of that money wasn’t stolen or squandered, this would be an easier burden to bear.
The recent report also indicates that employment in the community services industry dropped by 100 000 jobs, followed by businesses services which saw a decrease of 15 000 and construction which reported an employment drop of 13 000. Manufacturing had 12 000 less jobs, while the electricity industry lost 1 000 jobs in Q2.
Part-time employment saw an even worse blow, seeing 103 000 fewer jobs in Q2, from 1 225 000 in March 2022 to 1 122 000 in June 2022. Largely led again, by in community services (down 92 000) and manufacturing (down 13 000) industries as well as the trade industry which lost 2 000 jobs.
However, it must be said that the QES – like its twin, the Quarterly Labour Force Survey (QLFS), which measures the unemployment rate – is not taken by economists to be set in stone. Both have question marks around methodology and they can paint different pictures of the employment situation in the same period.
For example, the QLFS – based on household surveys covering the entire economy – showed a rise of 420,000 jobs in the formal, non-agricultural sector of the economy in Q2, translating into a slight fall in the unemployment rate to 33.9%.
“We believe that apparent job gains shown in the QLFS could be largely attributable to improved response rates, as the survey moved back to face-to-face, rather than telephonic interviews,” Absa said in a note before the QES was published.
‘Apparent’ is the operative word here, as most other indicators for the quarter – which saw the economy contract 0.7% on a quarterly basis – hardly signalled job creation.
So, that helps to explain why the QES – based on surveys of companies in the non-farm space – and the QLFS have diverged, with one showing employment growth, the other, shrinkage.
On the other hand, gross earnings increased 0.1% on a quarterly basis and 4.5% compared with a year ago, bringing this number above levels that prevailed three years ago. Among other things, this points to solid wage increases for many of those fortunate enough to have a job, though inflation is eating into those gains.
“Prevailing geopolitical tensions, elevated inflation and tightening global financial conditions are expected to slow the momentum in global growth. This, along with local energy supply constraints, are likely to impede employment prospects...
“Ultimately, the employment recovery to pre-pandemic levels may still be protracted in the near term, lagging the recovery in earnings,” FNB’s Mano said.
Given the incessant load-shedding, it is feared that emote working has been severely disrupted and those working remotely for international business organisations have high risk of losing or have already lost their jobs.
Sources: Daily Maverick, Money Web