The latest headline numbers on jobs are disturbing enough, with SA’s unemployment rate climbing to almost 35% in the third quarter. But the details are even more alarming, demonstrating as they do just how profound the malaise in SA’s economy and society is.
The economy may be recovering thanks to high commodity prices and relatively strong consumer spending, but it is proving to be a jobless recovery — even a job-shedding one. The economy lost 660,000 jobs in the third quarter, and the unemployment rate would have looked even worse but for an increase in the number of people who simply gave up looking for work.
If anyone had already forgotten July’s unrest, the jobs numbers provide a stark reminder, with KwaZulu-Natal and Gauteng — the provinces affected by the violence — showing the sharpest falls in employment and the trade sector hardest hit.
But the third quarter was also the quarter of the third wave of the Covid-19 pandemic, which saw lockdown restrictions tightened once again and hit SA’s economic heartland of Gauteng particularly hard. The worse-than-expected employment outcome suggests that when third-quarter GDP figures are published next week, the economic growth outcome could also be worse than expected.
As it is, there are now 2.1-million fewer people in jobs than in the first quarter of 2020, before the pandemic, with total employment standing at just 14.3-million. On the expanded definition, which includes those who have given up looking for work, unemployment is now at a catastrophic level of almost 47%.
There can be no louder signal that the government urgently needs to hold to account those implicated in the July unrest, and to put measures in place to make sure SA does not have a repeat of the violence that disrupted supply lines and brought economic activity to a near standstill for several days, as well as directly causing the loss of lives, livelihoods and many smaller businesses.
The damage has proved to be significantly costlier than originally expected, with Sasria now reporting R32bn in claims. And the cost in terms of jobs could be permanent.
There can surely also be no louder reminder of the need to vaccinate as many people as possible. That is the only way to speed up the reopening of the economy, especially of the tourism, entertainment and trade sectors, and ensure it remains open.
With the new variant having trashed the tourist season and threatening to bring the economy to a halt once again, the need to vaccinate has never been more urgent and the government needs to act with haste to mandate and incentivise people.
If it cannot, SA risks losing even more jobs.
The presidential employment stimulus will have helped the third-quarter figures a little, helping to create jobs at the margin. But worthy as they are, the more than 500,000 publicly funded temporary opportunities it has created are no substitute for the large-scale private sector job creation that SA needs more desperately than ever.
That will only materialise on any sort of sustainable basis if the government hastens to implement the reforms it has long promised to boost economic growth.
There have been encouraging announcements that have the potential to drive higher rates of private-sector investment, in essential infrastructure in areas such as electricity, ports, rail and broadband, as well as more broadly in sectors such as mining. But talk is not (yet) action.
The problem for SA is that these kind of reforms take time to deliver results even when you have a government that shows urgency. The lacklustre performance so far can only make calls for seemingly easy solutions — yet more massive borrowing to fund spending and intervention with Reserve Bank policies — even louder. For a start it will be almost politically impossible for the government to allow the special Covid-19 social welfare grants to lapse without a replacement.
But there is only one sustainable solution, a growing economy that creates opportunities for wealth and job creation. The jobs numbers should surely be a wake-up call.
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