Better GDP figures do not mean we are out of the woods, says employment and labour Director-General Thobile Lamati
While the better-than-expected latest Gross Domestic Product (GDP) figures indicate that more people got employed, this does not mean that South Africa is out of the woods. Not by a long shot.
Commenting on the figures, the Director General of the Department of Employment and Labour Thobile Lamati said the rate of absorption of new entrants was still low – rated at below 60% figures compared to other developed countries.
“The results in the third quarter of 2020 appear to suggest that the increase in the GDP translates into increased employment but it does not indicate that South Africa is out of trouble with the persistent stagnant high number of unemployed people in the country. The labour absorption rate increased only by 1.2 percentage points from the second (36.6%) to the third (37.5%) quarters of 2020,” said Lamati.
The results seem to confirm that the relaxation of the lockdown restrictions (Covid-19 pandemic) might be a good strategic policy choice but “people must still adhere to Covid-19 health safety guidelines in order to sustain the current positive economic trends”.
He added: “As lockdown restrictions have started to ease and economic activity has gradually begun to resume, some individuals and businesses may be out of danger of the negative effects of Covid-19 lockdown” and this calls upon government departments like DEL to strengthen mechanisms to monitor and implement the new economic recovery plan, in particular the Presidential Job Summit and high infrastructure investment in the short and medium term in order to combat the high level of inequality and poverty in the country.
“All of these, of course should be done within the policy imperatives of health and safety in the workplace and ensure that workers are protected from the pandemic and other dangers as outlined in the various pieces of legislation to ensure a healthy and safe workplace,” Lamati said.
Unemployment levels increased substantially by 2.2 million to 6.5 million in quarter three of 2020 compared to quarter 2 of 2020 resulting in an increase of 2.8 million in the number of people in the labour force (employed plus unemployed) in September 2020. This means that more of those who reported to be Not Economically Active (NEA) in quarter two of 2020 had now reported to be unemployed, which led to an increase in unemployment levels in the third quarter of 2020.
“The number of employed persons increased by 543 000 to 14.7 million in the third quarter of 2020 compared to 14.1 million in the second quarter of 2020. The data has shown that all sectors reported employment gains with the largest in the formal sector (non-agricultural) with 44% and the least in the agriculture sector with 1.6% in the third quarter of 2020. However, this comes with the caution that employment is still well below employment loses reflected during the quarter two of lockdown restrictions,” Lamati said.
Similar employment gains were recorded in all nine provinces, with the largest increase of 116 000 recorded in the Limpopo province. The least employment increase was recorded in the Northern Cape province with only 31 000 over the same period.
By industries, eight out ten industries (using the Standard International Classification codes) reported employment net gains except for the utilities and transport industries with 23 000 and 7 000 job losses respectively. The industries which gained more jobs were the finance (200 000), the community and social services (137 000) and the private households (116 000) between the quarters two and three of 2020.
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