Ina Opperman

By Ina Opperman

Business Journalist


Jobs bloodbath unrelenting: Unemployment rate now highest since 2008

When the job statistics for the third quarter of 2020 were announced, the feeling was that South Africa had reached the peak of unemployment. Sadly, the statistics for the fourth quarter are even worse.


While South Africans were optimistic the economy was starting to recover during the fourth quarter of 2020, new unemployment figures from Stats SA show was not the case, with another 701 000 people losing their jobs.

A total of 11.1 million people are now unemployed in the country.

A total of 1.397 million people lost their jobs in 2020, with the unemployment rate now at 32.5%, compared to 30.8% in the third quarter. Compared to a year ago, the number of unemployed people increased by 7.5% (507 000), while the number of people who were not economically active increased by 9.5% (1.5 million).

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Professor Jannie Rossouw of the Wits Business School says it is worrying the unemployment rate is still growing, because this means that there will be more people unable to pay tax.

“The government will have to be very careful not to overestimate its income from tax for the future.  It is also concerning that economic growth is not keeping up with the population growth of 1.5%. The only thing that can save us is to make it easier to employ people,” he says.

The number of discouraged work seekers increased by 235 000 (8.7%) and the number of people who were not economically active for other reasons decreased by 1.1 million (7.4%) in the third and fourth quarters, resulting in a net decrease of 890 000 in the not economically active population.

Stats SA said this movement was proportionately more towards the unemployed than the employed, which resulted in a significant increase of 1.7 percentage points in the official unemployment rate, with the unemployment rate according to the expanded definition of unemployment decreasing by only 0.5 of a percentage point to 42.6% in the fourth quarter from the third.

The working age population increased by 143 000 (0.4%) quarter-on-quarter and compared to the fourth quarter of 2019, by 583 000 or 1.5%. The number of employed people increased by just 333 000 to 15 million in the fourth quarter of last year.

Employment increased in these sectors

The largest employment increases were in the formal sector (189 000), followed by private households (76 000), the informal sector (65 000) and the agricultural sector (2 000). The number of employed people increased in eight of the 10 industries surveyed.

ALSO READ: GDP growth does not mean increased employment, says labour department 

The largest increase was recorded in community and social services (170 000), followed by construction (86 000) and private households (76 000). The only decreases were recorded in finance (123 000) and mining (35 000).

Decrease in employment in these sectors

There was a decrease of 1.4 million in total employment year-on-year, with 256 000 people in the financial industry losing their jobs, 241 000 in community and social services, 230 000 in manufacturing, 186 000 in trade and 184 000 in construction.

Informal and formal sector

Employment in the informal sector stood at 176 000 in the third sector and showed an increase of 65 000 in the fourth quarter, while employment in the formal sector also increased by 189 000.

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