Eastern Cape’s unemployment rate in third quarter increases to 47.3%

The Quarterly Labour Force Survey for the third quarter revealed that the Eastern Cape’s unemployment rose to 47.3%, while the expanded unemployment rate is sitting at 54.5%.

The survey was released on Tuesday by Stats SA.

While the province saw a jobs gain of 4,000 more people employed in the third quarter, the overall unemployment rate increased by 0.3 percentage points.

Statistician-general Risenga Maluleke said the rate for SA also continued to accelerate, reaching 34.9% — up from 34.4% in the preceding three months.

Presenting the Quarterly Labour Force Survey (QLFS) for the third quarter in Irene in Tshwane on Tuesday, Maluleke said the number of employed people fell by 660,000 in the three months to end-september to 14.3 million, while the number of unemployed people decreased by 183,000 to 7.6 million.

SA’S economy is dogged by high rates of inequality, poverty and unemployment.

The economy took a further battering from Covid-19 with about 1.4 million jobs lost in 2020, and it contracted 6.4%.

Maluleke said the number of discouraged jobseekers increased by 545,000 (16.4%), while the number of people who were not economically active “for reasons other than discouragement” increased by 443,000 (3.3%) between the two quarters, “resulting in a net increase of 988,000 in the not economically active population”.

“These changes resulted in the unemployment rate increasing 0.5 of a percentage point from 34.4% in the second quarter of 2021 to 34.9% in the third quarter of 2021 — the highest since the start of the QLFS in 2008,” Maluleke said.

“Unemployment, as measured by the expanded definition, increased 2.2 percentage points to 46.6% in the third quarter of 2021 compared with the second quarter of 2021.”

During the period under review, employment decreased by 571,000 (5.6%) in the formal sector, by 65,000 (5.4%) in private households and by 32,000 (3.8%) in agriculture.

Informal sector employment increased by 9,000 (0.3%).

Comparing the last two quarters, 5,000 people in the Nelson Mandela Bay joined the ranks of the unemployed while BCM shed 17,000 jobs. The unemployment rate in BCM has increased from 31% to 41% when compared year on year.

The biggest losses for the province came from the trade sector, followed by community and social services.

Eastern Cape premier Oscar Mabuyane did not respond to a request for comment.

DA MPL Bobby Stevenson said the government needed to create an environment for businesses to stay, invest and create jobs so people could live a life of value.

“We need to embrace bold and new ideas, and dismantle old ideological boundaries.”

“One such idea is turning the Coega area into an export processing zone, which has the potential to create thousands of jobs,” he said.

Political analyst Ongama Mtimka said a solution to unemployment might lie in the informal sector.

He said the sector managed to hold a steady gain compared with both annual and quarterly figures at 9.7% and 0.3%, respectively.

This is on a national overview. “The informal sector accounts for a significant share of the total employment in SA,” Mtimka said.

“This means upgrading and investment in this sector is crucial to address the unemployment problem.

“Government policy ought to be revised to show greater support of that sector, because it remains a big employer and it is not represented in the formal structure of policymaking.

“As such, the policy outlook of both the financing sector as well as government development agencies remains exclusionary. If more and more agencies begin to find instruments for investing and funding the sector, we may have a much better outlook.”

Nationally, the survey noted seven out of eight industries recorded formal sector employment losses. It said 571,000 job losses in the formal sector employment were mainly driven by trade, community and social services, construction and mining industries.

Finance is the only industry that experienced gains in the formal sector employment in the third quarter, compared with the second quarter.

We need to embrace bold and new ideas, and dismantle old ideological boundaries