One in every two jobs lost as a result of Covid-19’s economic onslaught was once held by an informal worker. This is acc
Posted: Wed May 04, 2022 7:57 am
One in every two jobs lost as a result of Covid-19’s economic
onslaught was once held by an informal worker.
This is according to a recent analysis of the effect of the
pandemic on South Africa’s labour market. The research forms part
of a Wits School of Governance project on the future of the
country’s economy.
The research — by economists Timothy Köhler, Haroon Bhorat, Robert
Hill and Benjamin Stanwix — also found that the lockdown decreased
the probability of employment for nonessential workers not
permitted to work under the stricter lockdown by 8%.
And self-employed workers — most of whom are in the informal sector
— experienced a nearly three times greater negative effect on
employment than the overall average effect.
The report notes that “South Africa’s lockdown was always expected
to lead to substantial short- and long-term economic costs”.
Statistics South Africa’s quarterly labour force survey found that
in the first months of the hard lockdown, 2.2-million people lost
their jobs. The country’s labour market lost about 200-million
working hours between the first and second quarters of 2020. This,
the economists’ report notes, is equivalent to more than
4.4-million weekly working hours.
The Covid-19-induced jobs loss essentially erased the last decade
of employment growth, the report points out.
The researchers used the StatsSA data to estimate the causal effect
of South Africa’s lockdown on employment probability.
According to the report, job losses in the informal sector and
among domestic workers together represent about half of total
employment losses.
“These sectors accounted for just under 28% of pre-pandemic
employment, showing that they were affected
disproportionately.”
Early on in the pandemic, the International Labour Organisation
(ILO) warned that lockdowns around the world would hit informal
sector workers the hardest.
An ILO analysis of global employment released at the end of April
last year estimated that in the first month of the crisis, informal
workers experienced a 60% decline in earnings. The largest declines
were in Africa and Latin America.
The ILO noted that lost earnings would result in an increase in the
rate of relative poverty for informal workers and their families by
almost 34% globally.
Self-employed hardest hit
At the time the ILO called for “urgent and significant” policy
responses to protect workers. “With further increases in income
inequality among workers, an even greater proportion of informal
economy workers will be left behind,” the ILO report read.
In South Africa, the government came under fire because, although
it instituted pay protection measures for formal sector workers
through the Unemployment Insurance Fund (UIF), did not extend to
informal sector workers. And although domestic workers were covered
by the scheme, many of them initially missed out because their
employers had not registered them with the UIF.
The South African analysis showed that most of those who lost jobs
(95.2%) were not union members and that trade union memberships
grew over the period, increasing from 3.95-million to
4.2-million.
According to the economists’ analysis, once the lockdown started
there was substantial reduction in employment probability overall.
But those who were deemed nonessential workers during the period
experienced a 14% reduction in employment probability, while
essential workers had a reduction of 9.77%.
Self-employed workers were disproportionately affected by the
lockdown. The economists found that they experienced a 22.4%
reduction of employment probability. More than 86% of self-employed
workers work in the informal sector.
Job recovery since the first wave of the pandemic has been slow.
According to the latest statistics, the unemployment rate reached
32.5% in the last months of 2020, the highest since the labour
force survey began in 2008. There were still almost 1.4-million
fewer people employed in the last quarter of 2020 than in the same
period in 2019.
Source: Smit, S. (2021). Covid kills a decade of employment growth
in SA.
https://mg.co.za/business/2021-05-08-co ... wth-in-sa/
Answer ALL the questions in this section.
Question 1 (30 Marks)
Covid - 19 has placed every generations' jobs at risk however, the
elderly has less chance of changing their career and much less
chance of being able to make a big leap in the job world, at this
stage.
Considering that the older generations have a greater chance of job
loss, critically discuss the effects that they could experience as
a result of losing their job.
onslaught was once held by an informal worker.
This is according to a recent analysis of the effect of the
pandemic on South Africa’s labour market. The research forms part
of a Wits School of Governance project on the future of the
country’s economy.
The research — by economists Timothy Köhler, Haroon Bhorat, Robert
Hill and Benjamin Stanwix — also found that the lockdown decreased
the probability of employment for nonessential workers not
permitted to work under the stricter lockdown by 8%.
And self-employed workers — most of whom are in the informal sector
— experienced a nearly three times greater negative effect on
employment than the overall average effect.
The report notes that “South Africa’s lockdown was always expected
to lead to substantial short- and long-term economic costs”.
Statistics South Africa’s quarterly labour force survey found that
in the first months of the hard lockdown, 2.2-million people lost
their jobs. The country’s labour market lost about 200-million
working hours between the first and second quarters of 2020. This,
the economists’ report notes, is equivalent to more than
4.4-million weekly working hours.
The Covid-19-induced jobs loss essentially erased the last decade
of employment growth, the report points out.
The researchers used the StatsSA data to estimate the causal effect
of South Africa’s lockdown on employment probability.
According to the report, job losses in the informal sector and
among domestic workers together represent about half of total
employment losses.
“These sectors accounted for just under 28% of pre-pandemic
employment, showing that they were affected
disproportionately.”
Early on in the pandemic, the International Labour Organisation
(ILO) warned that lockdowns around the world would hit informal
sector workers the hardest.
An ILO analysis of global employment released at the end of April
last year estimated that in the first month of the crisis, informal
workers experienced a 60% decline in earnings. The largest declines
were in Africa and Latin America.
The ILO noted that lost earnings would result in an increase in the
rate of relative poverty for informal workers and their families by
almost 34% globally.
Self-employed hardest hit
At the time the ILO called for “urgent and significant” policy
responses to protect workers. “With further increases in income
inequality among workers, an even greater proportion of informal
economy workers will be left behind,” the ILO report read.
In South Africa, the government came under fire because, although
it instituted pay protection measures for formal sector workers
through the Unemployment Insurance Fund (UIF), did not extend to
informal sector workers. And although domestic workers were covered
by the scheme, many of them initially missed out because their
employers had not registered them with the UIF.
The South African analysis showed that most of those who lost jobs
(95.2%) were not union members and that trade union memberships
grew over the period, increasing from 3.95-million to
4.2-million.
According to the economists’ analysis, once the lockdown started
there was substantial reduction in employment probability overall.
But those who were deemed nonessential workers during the period
experienced a 14% reduction in employment probability, while
essential workers had a reduction of 9.77%.
Self-employed workers were disproportionately affected by the
lockdown. The economists found that they experienced a 22.4%
reduction of employment probability. More than 86% of self-employed
workers work in the informal sector.
Job recovery since the first wave of the pandemic has been slow.
According to the latest statistics, the unemployment rate reached
32.5% in the last months of 2020, the highest since the labour
force survey began in 2008. There were still almost 1.4-million
fewer people employed in the last quarter of 2020 than in the same
period in 2019.
Source: Smit, S. (2021). Covid kills a decade of employment growth
in SA.
https://mg.co.za/business/2021-05-08-co ... wth-in-sa/
Answer ALL the questions in this section.
Question 1 (30 Marks)
Covid - 19 has placed every generations' jobs at risk however, the
elderly has less chance of changing their career and much less
chance of being able to make a big leap in the job world, at this
stage.
Considering that the older generations have a greater chance of job
loss, critically discuss the effects that they could experience as
a result of losing their job.