OPINION: Unemployment figures in SA explained, Newsline

Pali Lehohla

JOHANNESBURG – In summer, rain and lightning often overwhelm.

When clouds form, a medicine man knows whether the clouds herald hail and or fierce lightning.

For Basotho, the medicine man animated talk-in-tongues directs the storm away.

Statistician-General Risenga Maluleke has been taken to be talking in tongues lately.

Many wanted to question the second quarter GDP numbers he released on Tuesday.

Here are some important facts Maluleke has made.

First he has applied the methods consistently, however because of the changed circumstances, he was not able to enumerate the full sample he drew.

This led to a bias.

However, Maluleke compensated for the bias and arrived at the results he announced.

What surprises many is how come that a loss of 2.2 million jobs is accompanied by a significant drop in unemployment of over six percentage points.

This is a conundrum. This conundrum is however methodologically explainable.

To establish whether people are unemployed or not, Maluleke asks whether they have actively been looking for a job in the last seven days.

He looks at whether people should have applied, visited an employment bureau,walked the streets or visited firms to get a job.

It is the zero result from this active behaviour that qualifies one to be defined as an unemployed person. It is conceivable that when so many get offloaded from employment that they lose the inertia for job search.

But recall that there was lockdown level 5 to level three where movement was restricted.

This imposed an extra constraint on job search behaviour. This pattern of results is not unprecedented.

In 2005, the first half yearly results of the labour force survey revealed a pattern where unemployment levels were high yet discouragement was low.

What happened was that because the labour market was promising jobs, many more people actively looked for jobs, thus increasing the unemployment rate.

The report came out between the General Council of the ANC and a planned Cosatu strike. It became quite politically important to address the questions that emerged in that context. The opposite in the context ofCovid-19 is now true. Unemployment rate is low and yet discouragement has actually risen and this is with the expanded definition of unemployment reaching unprecedented levels.

The medicine man of statistics has explained this counterintuitive outcome correctly.

This is caused in part by the very depressed labour market that has thrown many of those who used to work on the streets that there is no incentive nor expectation that there can be prospects for new jobs.

Although he has gone to elevated ground with lightning conductor rods, Maluleke and his equipment have stood the test of time and survived the corona lightning and no ethnic group should live in fear of being cursed by the statistician-general.

* Dr Lehohla is the former Statistician-General of South Africa and the former Statistician-General.