We know, the headline is not surprising, or at least it shouldn’t be, but we need to have a conversation about how Statistics SA defines “unemployment”.

Earlier on Tuesday, Statistics South Africa revealed the results of the Quarterly Labour Force Survey Quarter 2: 2020.

As one might expect, the survey results make for a grim read, but there is confusion afoot as there are two statements at odds with each other.

“The results indicate that the number of employed persons decreased by 2,2 million to 14,1 million in the 2nd quarter of 2020 compared to the 1st quarter of 2020. This unprecedented change is the largest quarter 1 to quarter 2 decline since the survey began in 2008. Contrary to what one would expect in the face of such a large decline in employment, the number of unemployed persons declined substantially as well – by 2,8 million – to 4,3 million compared to Q1: 2020,” reads the first paragraph of the release issued by Statistics South Africa.

So fewer jobs, but more employed people, got it.

But this doesn’t make much sense and that’s because the statement above doesn’t quite paint the full picture.

There are two definitions of “unemployment” as defined by Statistics SA, namely the official definition and the expanded definition.

These are defined as such:

Unemployed persons according to the Official definition are those (aged 15–64 years) who:

  • Were not employed in the reference week; and
  • Actively looked for work or tried to start a business in the four weeks preceding the survey interview; and
  • Were available for work, i.e. would have been able to start work or a business in the reference week; or
  • Had not actively looked for work in the past four weeks, but had a job or business to start at a definite date in the future and were available

Unemployed persons according to the Expanded definition are those (aged 15–64 years) who:

  • Were not employed in the reference week; and
  • Were available to work but did not look for work either because they are discouraged from looking for work (see definition of discouraged work-seeker) or did not look for work for other reasons other than discouragement.

Looking solely at the official definition then, the number of unemployed people decreased but that doesn’t mean they are now employed.

This means that from the outside, yes, unemployment by the official definition decreased 5.7 percent year-on-year.

But this fails to take into account folks who have simply given up the search for work or couldn’t because of strict lockdown measures in South Africa.

Looking at the expanded definition we see unemployment increased by 3.5 percent year-on-year.

Lockdown pay downgrades

As lockdown hit, many companies opted to lower salaries in a bid to keep employees working rather than letting them go.

Stats SA has outlined how survey participants had their salaries reduced if at all and there appear to be some interesting results.

The survey looked at salary reductions between those with no Matric qualification, those with a Matric qualification, those with a tertiary education qualification and post-graduates.

While the majority of employees received a full salary, it looks like the lower your qualification, the more likely you would be to have a salary reduction.

As per Statistics SA, only 10.3 percent of post-graduates had their salaries reduced while 24.8 percent of folks without a Matric qualification received a salary reduction.

Worryingly, Statistics SA also revealed what percentage of workers did not receive pay while working during lockdown.

That figure sits at 17.6 percent overall though from the data presented to us, more young people (ages 15 – 34) didn’t receive a salary compared to adults (ages 35 – 64).

“Those who were employed during the national lockdown were also asked if they will be returning to the same job after lockdown and 94,5 percent indicated that they will; 2,0 percent indicated that they will not return to the same job; and 3,5 percent were not sure. Those who were not returning to the same job or were not sure, were also asked if they thought they might lose their jobs or close their business in the four weeks succeeding the survey interview due to COVID-19. 25,9 percent indicated that they thought they would,” Statistics SA reported.

You can find the full results of the Quarterly Labour Force Survey Quarter 2: 2020 here.

[Image – CC 0 Pixabay]