SA’s latest unemployment data, which shows the country’s joblessness crisis worsening to a new record, also reveals the costs of the violence and looting that engulfed KwaZulu-Natal and parts of Gauteng in July.
The provinces accounted for more than half of the 660,000 jobs lost during the third quarter of 2021.
The national unemployment rate climbed to 34.9% from what was already a record 34.4% in the previous three months. Unemployment as measured by the expanded definition, which includes those who have stopped searching for work, rose 2.2 percentage points to 46.6%.
During the third quarter, the largest employment decrease was recorded in Gauteng, which was down 200,092 to 4.4-million employed people. KwaZulu-Natal recorded a decrease of 123,000 to 2.2-million.
The Stats SA report is the first comprehensive indication of the job losses suffered in the provinces as the jailing of former president Jacob Zuma in July led to an explosion of violence that is estimated to have cost the economy R50bn.
Characterised as a failed insurrection by President Cyril Ramaphosa, the violence saw shops, warehouses, factories, pharmacies and malls stripped bare and set alight.
The government has come under attack, first for failing to anticipate the mayhem and acting accordingly, and then also doing little or nothing to hold those responsible to account, adding to concern among investors that the apparent impunity will encourage similar acts in the future.
Many business people indicated that they would not be able to rebuild, meaning a significant portion of the jobs lost will not return in an economy that was already battered by the Covid-19 outbreak and lockdowns — which led to a 6.4% drop in GDP during 2020.
The jobs report is further bad news for an economy that suffered another blow with the discovery of the Omicron variant, which has seen countries close their borders to SA, plunging the tourism industry, one of the big employers before the Covid-19 outbreak, into a new crisis.
The Steel and Engineering Industries Federation of Southern Africa (Seifsa) said the numbers reflect the impact of “Covid-19, stricter lockdown measures, the July riots and overall depressed economic activity across all major economic sectors”. Seifsa is the steel and engineering sector’s largest employer body, representing 18 organisations employing 170,000 workers.
Seifsa economist Palesa Molise said: “More effort should be placed in curbing the stubbornly high unemployment rate, reducing electricity costs [and] logistical costs and providing for critical skills opportunities in digitisation, automation, data science and artificial intelligence.” These are some of the reforms that the government has promised but delivered very little on.
Federation of Unions of SA president Godfrey Selematsela said the federation would call for an urgent meeting at the National Economic Development & Labour Council “to find ways of creating a conducive environment that attracts investment to grow the economy and create jobs”.
Cosatu national spokesperson Sizwe Pamla said further lockdowns in response to rising Covid-19 numbers would probably worsen unemployment numbers. Pamla called for an enhanced vaccination drive, but Cosatu has in the past opposed vaccine mandates, which would exclude unvaccinated people, including workers, from certain activities.
Economists at Nedbank said the unemployment numbers indicate the economic recovery so far has not supported job creation, with all industries well below pre-pandemic levels.
“The outlook for the job market remains poor,” they wrote.
“Economic conditions are still fragile. Business confidence is still depressed by the power shortages. Further lockdown restrictions will dampen activity somewhat, while long-standing structural deficiencies will continue to linger on investor sentiment.”
Update: November 30 2021
This article has been updated with new information throughout
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