Report reveals shocking number of job losses in South Africa during lockdown

A team of South African researchers have published the National Income Dynamics Coronavirus Rapid Mobile Survey (NIDS-CRAM) which looks at the economic impact of the coronavirus pandemic, and countrywide lockdown.

The study surveyed 7,000 South Africans and can be considered the most nationally representative survey that currently exists, the researchers said.

The key finding was that approximately three million people lost their jobs over the lockdown period, representing an 18% decline in employment from 17 million people employed in February, to 14 million people employed in April 2020.

Accounting for a 95% confidence interval, the decline in the number of people employed from February to April was likely between 2.5 million and 3.6 million, the researchers said.

They stressed however, that it can be difficult to define ’employment’ in the current environment due to the number of furloughed workers and temporary layoffs.

Using income as a definition of employment, the group found that the proportion of adults who earned an income in February declined by 33% which is made up of a roughly equal share of those who lost their job, and those who were furloughed.

The report revealed a 40% decline in ‘active employment’ also split equally between those who were laid off, and those who were either furloughed or on paid leave.

Job losses were disproportionately concentrated among the already disadvantaged groups in the labour market.

“A larger share of the informal economy, relative to formal employment, were locked out of employment during the month of April.

“Moreover, for the typical informal worker that was employed in both February and April the hours worked per week decreased by as much as 50%. Decreases in typical working hours were particularly large for women and workers in self-employment and for informal casual workers,” the researchers said.

The study also shows that significant numbers of the newly unemployed are in households with no grants.

“Many of those who experience job losses are in grant-receiving households, for example, a child support grant or an old-age pension, but there are also a substantial portion of people who live in households where there is no grant income.

“Approximately 30% of those who were retrenched between February and April report no household-level grant protection at all.”

Job losses

Carmen Nel, economist and macro strategist at Matrix Fund Managers, said recently that total job loss estimates for the country range from 400,000 – 1.5 million.

“Our view is that losses will be towards the lower end as the economy opens up again,” she said.

“If we lose 1.5 million jobs, that will mean half our labour force will be unemployed, which will put a tremendous strain on the UIF and grant system, and even raise questions around the need for a universal basic income grant,” said Nel.

Data published by the the Commission for Conciliation, Mediation and Arbitration (CCMA) also indicates that the country is facing a jobs ‘horror show‘.

The CCMA said that it received over 16,500 referrals relating to issues between workers and employers in June. While the most common complaints relate to unfair dismissal due to misconduct, at least 1,800 of these deal with retrenchments.

In these 1,800 cases, as many as 100,000 employees are in the firing line – though the CCMA’s track record shows that a significant portion of these jobs are likely to be saved.

Minister of Employment and Labour, Thulas Nxesi also warned that massive job losses were on the way.

In a presentation earlier in June, Nxesi produced four ‘mass job loss’ scenarios for the country, which projected that the unemployment rate could peak anywhere between 41% and 54% as a result of the lockdown.

The latest data from Stats SA shows that South Africa’s labour force is around 23.5 million people, 7 million of whom are unemployed.

Stats SA’s Quarterly Labour Force Survey for the first quarter of the year (to the end of March), shows that the country’s unemployment rate increased by one percentage point to 30.1%.

This reflects data from before the nationwide lockdown came into full effect, with the move happening at the tail-end of March.

Read: Businesses take on insurance firms for rejecting Covid-19 claims

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