The unemployment rate in Africa rises to 32.5%

According to Statistician-General Risenga Maluleke, the unemployment rate in Africa rose to 32.5% in the last three months of last year, which is a 1.7% increase from the third quarter of 2020. “Formal sector employment increased by 189 000 (1.8%); informal sector employment by 65 000 (2.6%); private households by 76 000 (6.8%), and employment in agriculture increased by 2 000 (0.3%). Employment increased in all industries, except finance and mining. The industries which gained the most jobs were community and social services (170 000) and construction (86 000),” Maluleke said.

Compared to the last quarter of 2019, the findings show that employment contracted in all industries. According to Stats SA the industry with the most job losses was finance (256,000), followed by community and social services (241,000) and manufacturing (230,000). Stat SA has also noted that those who worked in the last quarter of 2020 were predominantly men across most industries, except for the community and social services sectors as well as private households, where women are predominantly employed.

The national statistics agency noted that almost eight out of ten of the 15 million people who were employed in the last quarter of 2020 were expected to work during the national lockdown by their respective employers. Meanwhile, working from home was more common for those living in Gauteng and the Western Cape, in particular among professionals and managers. The findings also showed that those with lower levels of education were more likely to have had their salaries reduced than those who have higher levels of education.

IZA World of Labor author Robert Moffitt has looked at the evidence and found that during economic downturns, or recessions, unemployment benefits provide additional support to workers without large negative side effects. As such they improve workers’ long-term labor market productivity and stimulate the economy:

“Unemployment benefit programs provide much needed support to unemployed workers during economic downturns, without major side effects in lengthening periods of unemployment or raising the unemployment rate. By helping households with very low incomes, unemployment benefit programs lower the poverty rates. And unemployment benefit programs encourage people to take socially beneficial jobs, despite some risk of future layoffs, which improves the economy,” Moffitt writes in his article.

Read Robert Moffitt’s article Unemployment benefits and unemployment.