Chart: S.Africa: 1 million people out of work in Durban due to Covid-19 lockdown
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Durban – Unemployment in the eThekwini Municipality has increased to 22% with more than one million people now looking for work the city’s official quarterly statistics show.
According to a report by Durban EDGE Team, a unit in the Policy, Strategy Innovation and Research Department of the Economic Development Unit of eThekwini Municipality, the spike in unemployment in the city in the second quarter of 2020 was due to the Covid-19 lockdown.
Despite an easing of the restrictions, there were more people – especially among the city’s youth – that were searching for jobs after being retrenched.
The figures come in the wake of Stats SA Quarterly Labour Force Q2 report released last September that showed that the South African economy shed 2.2 million jobs in the second quarter of 2020.
According to the latest eThekwini figures, the unemployment rate in the city increased by 22.2 percentage points to 14% from -8,2% in the previous quarter.
“An initial increase in real unemployment is positive, as it represents an increase in the number of people actively looking for work,” the report said.
“They may not have been able to do so previously because of Covid-19 restrictions on mobility. When the country moved to level one around the third quarter, this allowed for people to look for work resulting in high strict unemployment. This unemployment is however still low when compared with the average unemployment rate of 21% recorded in 2019. This is just an indication that even with the easing of lockdown restrictions job opportunities were still slim in the third quarter as businesses recovered, and that fewer people were actively searching for jobs than in 2019”.
The report revealed that the number of employed people had increased by 73 000 from 986 000 to 1.059 million between the second and third quarter of 2020.
In turn, the number of not economically active people has decreased by 152 000 between 2020 Q2 and 2020 Q3 from 1.406 million to 1.254 million, the data showed.
While data showed that people are starting to actively look for work, strict unemployment (people actively looking for work) increased by 85 000 people (from 88 000 to 173 000).
“There is therefore a move from the; not economically active’ to ‘employed’ and ‘unemployed’ status when compared to previous quarter, resulting in an increase of 158 000 people in Durban’s labour force (the labour force therefore had 2, 486 million people in total in Q3)”.
Worryingly, the report showed that youth unemployment was still high and was so even before the coronavirus pandemic.
“To date, the youth remains the most vulnerable of all age groups in the South African labour market. Durban’s youth unemployment rate is 21.1% which is greater than the aggregate unemployment rate for all ages (14%). Job creation isn’t happening fast enough to absorb youth into the labour force. While huge investment opportunities have been lost in the process of the pandemic, the city is actively implementing alternative ways to create jobs both in the formal and informal sector to attract investments back. Nonetheless, even pre-pandemic investment levels were not sufficient to create enough youth work opportunities, and therefore more work is needed,” the report noted.
It, however, said that Durban’s youth unemployment is still significantly lower than that in its counterpart cities and was due to the higher proportion of not economically active youth than in other cities.
“It will take some time to understand the magnitude and severity of the impact of Covid-19 on the overall labour market. However, what is clear is that lockdown restrictions directly impact the number of people able to look for work; and the number of job opportunities available. Overall Q3 has therefore resulted in the return of some jobs to Durban’s economy, with more people actively participating in job searches. Despite these positive gains; the City is still in the midst of a pandemic; and the labour market has still has not recovered to 2019 levels. Lastly, youth unemployment is still stubbornly high and remains a concern”.
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