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How did economy shed 2.2m jobs in Q2, but unemployment rate still fell sharply?

29 September 2020 6:46 PM
Tags:
Unemployment
The Money Show
Stats SA
Job creation
Bruce Whitfield
Jobs
Statistics South Africa
unemployment figures
Quarterly Labour Force Survey
Employment stats
Lockdown
COVID-19
Paul Berkowitz
Hlaziya Solutions

'It's an abnormal report in abnormal times'. Paul Berkowitz (CEO, Hlaziya Solutions) makes sense of Stats SA unemployment figures.

"Along with so many other conventional economic/financial indicators, Covid has made a nonsense of the Stats SA Quarterly Labour Force Survey and the unemployment numbers."

That's the response from Hlaziya Solutions CEO Paul Berkowitz after Statistics South Africa released its survey for the second quarter (Q2) of 2020.

Despite the loss of 2.2 million jobs, there was also a huge drop in unemployment according to Stats SA.

A woman and child beg for money on Republic Road in Randburg. Image: Taurai Maduna/Eyewitness News

It says the unemployment rate fell from 30.1% to 23.3% in the period from April to June.

The official unemployment rate does not include "discouraged job seekers".

If this category is added, the unemployment rate shoots up to 42%.

Why is it that the narrow unemployment rate is used for employment stats in South Africa and other countries?

Paul Berkowitz (Hlaziya Solutions CEO) shares his insights on The Money Show.

I think to summarise the Quarterly Labour Force Survey report, it's an abnormal report in abnormal times. The Stats SA preamble did warn that because of lockdown Stats Sa wasn't able to do face to face interviews.

Paul Berkowitz, CEO - Hlaziya Solutions

There are so many unknowns about this report and the fact that the narrow unemployment rate reports that reduction in the unemployed because they were under lockdown so they weren't allowed to look for work by law - it translates into a drop in the narrow unemployment rate but the broad unemployment rate just kept climbing.

Paul Berkowitz, CEO - Hlaziya Solutions

This confusion around the figures leads to lack of clarity he says, but ultimately the number of people potentially out of work lies between the report's 2.2 million, and 5 million.

There's been a reduction in unemployed and there's been a reduction in employed - 2.2 million people lost their jobs, 2.8 million other people weren't able to look for jobs even if they wanted to and it's not quite clear how we record them.

Paul Berkowitz, CEO - Hlaziya Solutions

We don't know who is going to get their jobs back...

Paul Berkowitz, CEO - Hlaziya Solutions

Listen to the discussion in detail in the audio below:


29 September 2020 6:46 PM
Tags:
Unemployment
The Money Show
Stats SA
Job creation
Bruce Whitfield
Jobs
Statistics South Africa
unemployment figures
Quarterly Labour Force Survey
Employment stats
Lockdown
COVID-19
Paul Berkowitz
Hlaziya Solutions

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