Joblessness spikes in Eastern Cape

More than  40% of working-age people in the Eastern Cape were unemployed in the three months to March  — before the devastating effects of the coronavirus lockdown could be quantified.

The figures are contained in Stats SA’s latest Quarterly Labour Force Survey, which was released on Tuesday.

According to the survey,  the official unemployment rate in the province increased to 40.5% between January and March, up from 39.5% in the last quarter of 2019.

This means there were 939,000 unemployed people in the province in the first quarter, a figure likely to increase dramatically because the nationwide lockdown took effect on March 27, forcing most businesses to stop operating.

Using the expanded definition of unemployed, which includes discouraged work seekers, or people who have given up looking for a job, the figure for the Eastern Cape was a staggering 48.3% in the first quarter, up from 47.7%.

The official unemployment figures for Nelson Mandela Bay showed an increase from 189,000 in the last quarter of 2019 to 198,000.

Unemployment in non-metro areas in the province jumped substantially —  from 936,000 in  2019 to 997,000.

Industries that recorded huge job losses in the province include community and social services, private households, trade and utilities.

The agricultural  sector contributed to the employment of 3,000 people in the first quarter, while manufacturing was flat.

Nationally, the unemployment rate rose to 30.1% in the first quarter, reaching its highest level on record, even before the advent of the Covid-19 crisis.

The rise in joblessness is up from the 29.1% in the fourth quarter of 2019, Stats SA said.

It said nationally most industries experienced job losses in the first quarter, with the finance sector shedding the most jobs, followed by community and social services, agriculture and transport.

Using the expanded definition, unemployment nationally rose to 39.7% in the first quarter.

According to the survey, all provinces recorded increases in the expanded unemployment rate except Northern Cape, where the rate decreased by 1.5 percentage points.

Stats SA noted that due to the nationwide lockdown, face-to-face data collection was suspended from March 19, at the tail end of its work for the survey.

Eastern Cape Treasury spokesperson Mzukisi Solani said any increase in unemployment was always  of concern to the provincial government.

“It is no secret that our economy has not been performing well and has been under pressure.  

“But as government, we have always made available facilities that allow businesses to always use retrenchments and job losses as a final resort to ensure that we prevent a jobs bloodbath.”

DA leader in the provincial legislature Bobby Stevenson said the latest figures were a worrying sign of things to come, and that the real slaughter would be seen in the second quarter, when the effect of the lockdown started to play out.

“That the province has seen continuing growth in the unemployment, which increased by 1% from the fourth quarter of last year to 40.5% and by 1.2% in the expanded unemployment figures, to 48.9%, was expected.

What is the real shocker is the huge jump in the expanded rate of unemployment in non-metro areas, up from 45.1% to 56.5%," Stevenson said.

He said the unfolding humanitarian crisis meant more than half the working population in the more rural areas of the province were without work before the lockdown was implemented.

“This highlights the huge hardship that families are going through as they struggle to simply survive at a time like this,” he said.

Stevenson said to stem the tide of job losses in the province, municipalities needed to provide reliable basic services so businesses could operate.

“We need reliable electricity, water and road infrastructure!”

— Additional reporting by BusinessLIVE