Job creation slanted in favour of the skilled

The labour market in South Africa is recovering from COVID-19, but unskilled and less educated people are still being left behind, writes Derek Yu, professor of economics at the University of the Western Cape.

- Derek Yu

For more than three decades, the South African economy has had very high rates of joblessness. The country’s economy has been unable to create enough jobs for its growing army of workers. This has partly been because of the stagnant economic growth rate of only 1,7% during the 2010s (it was even lower at 0,9% between 2015 and 2019).

Another factor that limited the economy’s capacity to create jobs at a rapid enough pace to absorb new job seekers and previously employed people was the impact of restrictions imposed during the coronavirus (COVID-19) pandemic. Compared with the global financial crisis of 2008/9, the impact was much greater. Then, about 600 000 jobs were lost in South Africa. During the COVID-19 restrictions there were a staggering 1,5 million job losses.

We examined the labour market during the lockdown period. We compared data from 2020’s first quarter with data from 2022’s second quarter, obtained from the Quarterly Labour Force Survey data released by Statistics South Africa. The survey done for 2020’s first quarter was the last one before the pandemic hit the country. The 2022 second-quarter survey took place just before all the remaining lockdown restrictions were abolished.

To complement the findings of this study, we also analysed the most recently released 2023 third-quarter survey data to find out whether the most vulnerable groups had recovered and whether their labour market outcomes had at least returned to pre-COVID-19 levels.