‘Startling’ bounce-back for SA’s labour market — Nids-Cram survey

The labour market bounced back substantially by October 2020. But only half of the people who lost their jobs at the beginning of the Covid-19 lockdown were re-employed.

This is according to the most recent data release from the National Income Dynamics Coronavirus Rapid Mobile Survey (Nids-Cram), which found that by October, the number of actively employed adults reached pre-Covid-19 levels.

According to the survey, by October, 53% of its respondents were employed. This is compared to the only 40% employed in the first month of the lockdown.

The Covid-19 pandemic, and its accompanying economic downturn, dealt a massive blow to workers worldwide. According to recent data from the International Labour Organisation, 8.8% of global working hours were lost in 2020. This is equivalent to 255-million full-time jobs.

In South Africa, which was already in the throes of a deepening unemployment crisis, the effects of job losses resulting from business closures were acutely felt. Last year, Statistics South Africa (StatsSA) reported that 2.2-million jobs were lost in the first three months of the lockdown.

The Nids-Cram report calls the labour market recovery “startling”, given the scale of the job losses reported last year. The imminent release of StatsSA’s quarterly labour survey for the end of 2020 — which has a larger sample size — will help verify the extent of the bounce-back.

According to the Nids-Cram survey, the reported labour market recovery has not been driven by the re-employment of those who lost their jobs in April 2020. 

A notable proportion of people without employment going into the lockdown subsequently found work, the report notes. Among the February non-employed, 27% of youth and prime-age adults and 32% of older adults were employed in October.

Job recovery positively correlated with education levels, especially among youth. According to the survey, between February and October, the employment of young people with more than a matric certificate increased from 42% to 46%. On the other hand, for youth without a matric-level education, the employment rate fell from 28% to 23%.

The younger workers were, the survey notes, the more likely it was that they experienced persistent job loss, with 17% of the young people who lost work between February and April failing to re-enter employment.

“The factors that make finding employment difficult for youth are likely to be exacerbated in poor labour markets when there is less demand for workers and employers may become even more risk-averse,” one of the three Nids-Cram labour market reports reads.

Reza Daniels, an associate professor in the School of Economics at the University of Cape Town, said the remarkable labour market recovery could not be called a true bounce-back unless people who lost their jobs were re-employed.

The findings indicate that South Africa’s labour market is undergoing “a profound transition”, Daniels added. 

Treasury deputy director general Ismail Momoniat said the reported bounce-back is a surprise, but added that this recovery picture is a complex one.

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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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