Cape Town has the lowest unemployment rate in SA

The City of Cape Town has the lowest expanded unemployment rate of all metros in South Africa, according to the Quarterly Labour Force Survey released by Stats SA on Tuesday, 29 September. The metro had a 28,9% unemployment rate in the second quarter of 2020 from April to June.

According to the statistics, the expanded unemployment rate (which includes discouraged job seekers and people who have other reasons for not seeking employment) in the City increased by 3.8 percentage points, quarter-to-quarter, to 28.9%. This means that a further 41 000 more people were defined as unemployed, in the broader sense, between April and June 2020.

The City’s Mayoral Committee Member for Economic Opportunities and Asset Management, Alderman James Vos released a statement saying that, while it is encouraging that the City has the lowest broad unemployment rate, “the impact of the national lockdown measures has been devastating for far too many residents.

“Our tourism and related industries have been among some of the hardest hit. That is why I am very excited to welcome back the first international flights tomorrow, Thursday 1 October, at our award-winning Cape Town International Airport,” continued Vos.

“The number of persons employed decreased by 2.2-million in Q2:2020 to 14.1-million quarter-on-quarter,” according to Stats SA. In the second quarter, jobs were shed across all industries.

The formal sector, which accounts for 71.1% of total employment in the country, was hit the hardest, losing 1.2-million jobs for a deficit of 10.8 percent. The informal sector lost 640 000 jobs (21.9%). Agriculture lost 66 000 jobs (7.6%) and private households lost 311 000 jobs (23.6%).

Despite the rampant job loss, Stats SA reports that the official unemployment rate in South Africa has decreased to 23.3% – from 30.1% in Q1 – the lowest it has been since 2008.

This is because Stats SA decided to classify the 2.2-million people who lost their jobs in Q2 as ‘economically not active’ instead of adding the figure to the unemployment rate, which would have resulted in a steep increase in the rate.

When questioned about why they referred to those who lost their jobs during the lockdown as ‘economically inactive’ by a member of the public on Twitter, Stats SA replied: “As a national statistics office, we use the official definition as per the International Labour Organisation. This ensures our statistics are comparable with other countries.”

The official definition defines unemployed persons as those 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;

– “[or] had not actively looked for work in the past four weeks, but had a job or business to start at a definite date.”