Unemployment hits another record high as unrest takes its toll

South Africa’s unemployment rate has hit yet another record high, coming in at 34.9% of the labour force in the third quarter of 2021.

Data from Statistics South Africa (Stats SA) released on Tuesday shows that the official unemployment rate increased by 0.5 percentage points compared with the second quarter. At 34.9%, the unemployment rate is at its highest level since the start of the statistics agency’s quarterly labour force survey in 2008.

Unemployment under the expanded definition, which also counts job seekers who have given up on the search, increased by 2.2 percentage points to 46.6% in the third quarter versus the previous three months. The number of discouraged work seekers increased by 545 000.

In a quarter marked by July’s civil unrest — which swept through parts of the country’s two economic hubs, KwaZulu-Natal and Gauteng, dealing a R50-billion knock to the economy — the uptick in unemployment is no surprise. 

High-level data had already shown signs of the unrest’s economic onslaught, which, paired with the third wave of the Covid-19 pandemic and a fresh bout of electricity load-shedding during the period, served a heady knock to business and investor confidence. 

Between June and September, the composite leading business cycle indicator, which measures economic activity, deteriorated by more than 5%.

According to the third-quarter unemployment data, Gauteng was most severely hit by job losses during the period, followed by the North West. Gauteng lost 200 000 jobs, while Kwa-Zulu Natal shed 123 000, coming in as the third-worst-affected province.

South Africa’s deepening unemployment crisis was sent spiralling when Covid-19 hit last year and the government imposed a national lockdown in response, initially shutting down all but essential services.

In the second quarter of 2020, which Stats SA dubbed “the lockdown quarter”, 2.2-million people lost their jobs. 

But at the time the unemployment rate significantly decreased to 23.3%, the lowest rate recorded since the third quarter of 2009. This decline was, however, because of a technicality: Stats SA’s official definition of unemployment requires that people look for work and are available for work, conditions that were hindered by the lockdown. 

Since then, the unemployment rate has climbed to record highs, dashing hopes that jobs would return to pre-pandemic levels as the economy recovered. The previous three surveys have all recorded unemployment rates at the highest levels since 2008.

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

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