Official unemployment in the Republic of South Africa has risen to 34.4 percent. According to Bloomberg, this is now the highest indicator in the world.
In the first quarter, the share of unemployed in the country’s economy was 32.6 percent and increased by 1.8 percent by the end of March. In the second quarter, the financial sector in South Africa lost 278 thousand jobs, and the manufacturing industry — 83 thousand. Unemployment in the broader sense, which includes able-bodied citizens who are not looking for work, rose to 44.4 percent from 43.2 percent in the first quarter.
This figure is likely to continue to grow in the third quarter because the South African government has tightened COVID-19 restrictions against the background of the third wave of cases. These measures are hindering the recovery of the economy, which shrank by 7 percent in 2020. Experts believe that due to the rising unemployment rate, the authorities may also extend economic measures to support the population, which, in turn, will complicate the stabilization of the state budget.
In July, the country was rocked by riots in the provinces of Gauteng and Kwazulu-Natal, two key economic centers, which killed 354 people. Thousands of businesses were looted and closed. According to the South African Association of Property Owners, the unrest caused damage from the theft of products worth 50 billion rands ($3.3 billion), and at least 150,000 jobs were at risk.
The unemployment rate in South Africa, Africa’s most industrialized economy, has exceeded 20 percent for at least two decades. The indicator remained so high even in the early 2000s when production grew by five or more percent per year.
The ability of South African companies to hire employees is being undermined by the education system, which does not provide potential employees with the appropriate skills. The situation is also complicated by strict labor laws, which make hiring and firing burdensome processes for the employer. In addition, the strategy of the apartheid era, under which black citizens were subjected to racial segregation and lived on the periphery of cities in separate settlements, was curtailed only in 1994. Its consequences still make it difficult for residents to access the official labor market.
In the context of the pandemic, many countries are experiencing mass unemployment. The number of vacancies in the UK in August reached one million, but the labor force in the country still cannot cover the huge demand.
