The Quarterly Employment Statistics (QES), released by Statistics South Africa (Stats SA) on Tuesday, showed that total employment in the three months to June fell by 119,000 to 9,948,000, from 10,067,000 in March. 

Stats SA estimated in June that the country’s population was just over 60 million, so roughly one in six South Africans has a paying job in the formal sector. 

Put another way, five out of six don’t. This explains why many, and probably most, breadwinners in South Africa have multiple dependants, and even taxpayers with no offspring or immediate dependants are carrying the can for the rest. If so much of that money wasn’t stolen or squandered, this would be an easier burden to bear.  

It must be said that the QES – like its twin, the Quarterly Labour Force Survey (QLFS), which measures the unemployment rate – is not taken by economists to be set in stone. Both have question marks around methodology and they can paint different pictures of the employment situation in the same period. 

For example, the QLFS – based on household surveys covering the entire economy – showed a rise of 420,000 jobs in the formal, non-agricultural sector of the economy in Q2, translating into a slight fall in the unemployment rate to 33.9%.

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“We believe that apparent job gains shown in the QLFS could be largely attributable to improved response rates, as the survey moved back to face-to-face, rather than telephonic interviews,” Absa said in a note before the QES was published. 

‘Apparent’ is the operative word here, as most other indicators for the quarter – which saw the economy contract 0.7% on a quarterly basis – hardly signalled job creation. 

So, that helps to explain why the QES – based on surveys of companies in the non-farm space – and the QLFS have diverged, with one showing employment growth, the other, shrinkage. 

Figure A: Employment in the non-agricultural formal sector, June 2018 – June 2022

Still, both are indicators of broad trends, and those clearly are not good at the moment. The QES shows that formal employment levels remain stuck below pre-pandemic levels. Many of the jobs lost during the harshest lockdown periods – in hindsight, many of the restrictions were certainly questionable –have not come back.  

The labour-intensive food and beverage sector, for one, is still battling to regain lost ground. 

SA’s food and beverage sector battling to rebound after pandemic, lockdown measures

Stats SA said in a statement that the quarterly decline in employment “was largely due to decreases in the following industries: community services (-100,000); business services (-15,000); construction (-13,000); manufacturing (-12,000); and electricity (-1,000)”.

“Most job losses were recorded in the community services sector and were most likely linked to temporary census work,” Koketso Mano, FNB Senior Economist, said in a note on the data. 

Figure B: Gross earnings of employees in the formal non-agricultural sector, June 2018 – June 2022

On the other hand, gross earnings increased 0.1% on a quarterly basis and 4.5% compared with a year ago, bringing this number above levels that prevailed three years ago. Among other things, this points to solid wage increases for many of those fortunate enough to have a job, though inflation is eating into those gains. 

“Prevailing geopolitical tensions, elevated inflation and tightening global financial conditions are expected to slow the momentum in global growth. This, along with local energy supply constraints, are likely to impede employment prospects… 

“Ultimately, the employment recovery to pre-pandemic levels may still be protracted in the near term, lagging the recovery in earnings,” FNB’s Mano said. 

The legacy of the pandemic is still taking its toll. DM/BM