Long way to go to decrease unemployment rate, says economist

On Tuesday, Statistics South Africa (Stats SA) released the Quarterly Labour Force Survey (QLFS) results for the third quarter of 2021, which were the highest since the start of the QLFS in 2008.


As the country hit a new low with its high unemployment rate of 34.9%, not only is it an accurate depiction of how challenging South Africans are finding the job market, but a reflection of the weak broader economy in South Africa.

On Tuesday, Statistics South Africa (Stats SA) released the Quarterly Labour Force Survey (QLFS) results for the third quarter of 2021, which were the highest since the start of the QLFS in 2008.

“The results for the third quarter of 2021 show that the number of employed people decreased by 660 000 in the third quarter of 2021 to 14.3 million,” the statistical release said.

“The number of unemployed people decreased by 183 000 to 7.6 million compared to the second quarter of 2021.

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“The number of discouraged work seekers increased by 545 000 (16.4%) and the number of people who were not economically active for reasons other than discouragement increased by 443 000 (3.3%) between the two quarters, resulting in a net increase of 988 000 in the not economically active population.”

Economist Nchimunya Hamukoma said although these figures were a meaningful representation of what the world of unemployment looked like for young and old South Africans, the country was capable of seeing a lower unemployment rate.

“We can get out of it. That is one of the beautiful things about economics, it is never static; things do not stay the same. The baseline rule about economics is that things move in cycles and so it gives us the opportunity to prepare and think about the next possible results,” she said.

The statistical release added changes resulted in the official unemployment rate increasing by 0.5 of a percentage point from 34.4% in the second quarter of 2021 to 34.9% in the third quarter of 2021 – the highest since the start of the QLFS in 2008.

“The unemployment rate according to the expanded definition of unemployment increased by 2.2 percentage points to 46.6% in third quarter compared to the second quarter.

“The labour force participation rate in Q3: 2021 was lower than that reported in Q2: 2021 as a result of these movements – decreasing by 2.3 percentage points to 55.2%.

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“The absorption rate also decreased by 1.8 percentage points to 35.9% in the third quarter of 2021 compared to the second quarter of 2021.”

Political economy analyst Daniel Silke added lack of policy and competitiveness contributed to the high unemployment rate.

“The lack of policy and clarity within the country and that we are not competitive enough in terms of our understanding of where policy should be in SA compared to other countries formed part of microeconomic issues,” he said.

“There is a long way to go to decrease this figure, the government has to get clarity on what their vision is for South Africa.”

Trade union federation Cosatu national spokesperson Sizwe Pamla said further lockdowns in response to rising Covid numbers were likely to worsen unemployment numbers.

“The expanded definition stands at a staggering 46.6%, in essence almost half of the adult working population is unemployed,” he said.

“The immediate measures of the Economic Recovery and Reconstruction Plan have not yielded the employment numbers necessary to reduce the level of unemployment. This is because localisation and manufacturing initiatives are yet to be realised.”

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