South Africa: Twin Shocks of Economic Contraction and Covid-19 Reverberate Through SA's Unemployment Line


The economy may be improving, but this has not translated into jobs - the recovery would have to be sustained for several quarters before employment figures shift positively.

First published in the Daily Maverick 168 weekly newspaper.

Statistics South Africa will release the GDP data for the first quarter (Q1) of 2021, on 8 June. This release of the economy's trajectory follows the 7% contraction of 2020 in the face of the once-in-a-century event, which is our current Covid-19 pandemic.

According to the South African Reserve Bank, the contraction was also an event on the same time scale - the biggest decline in economic output in South Africa in a century. So there is scarcely anyone in South Africa alive who has experienced either catastrophe.

The impact of these twin shocks has been nothing short of seismic, especially on the employment front, which is deeply worrying. South Africa's economy is probably growing again, but this has not been accompanied by meaningful job creation, according to the latest data, which shows unemployment at record highs.

In the early 1990s, American economist Nick Perna coined the phrase "jobless growth", referring to an economy that grows without creating jobs.

This may not explain...

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