Should you be reading the electronic copy of this column, only the first 50 odd words would be visible before you would need to click on the arrow to be able to read the column in its entirety. Accepting the initial obscurity in the title, what would you consider to be “a national danger, a national scandal”? Consider former US President Harry S. Truman’s words, “It’s a recession when your neighbour loses his job; it’s a depression when you lose yours.”

The title is derived from Ellen Wilkinson whom in 1936 led her constituency’s march on the UK Parliament, declaring “Unemployment is bigger than a political party. It is a national danger and a national scandal.”

Originally scheduled for release on August 11, on September 29, Statistics South Africa (StatsSA) released its “Quarterly Labour Force Survey (Q2: 2020)”, which without having to be a trained Economist you would know it to be very bad news, indeed.

It does not disappoint, it starts off that way. When comparing the second quarter of 2020 to the first quarter of 2020 the number of employed decreased by 2.2 million to 14.1 million. In other words, the number of unemployed increased. StatsSA calls this an “unprecedented change” as it is the largest quarter one to quarter two decline since the survey began 12 years ago. No surprises there.

The surprise is however reserved for the following sentences of the release, which culminates to inform of a significant decrease of 6.8 percentage points in the official unemployment rate from 30.1% in the first quarter of 2020 to 23.3% in the second quarter of 2020.

Ironically the reason for the significant decrease in the official unemployment rate is founded in two words – ‘national lockdown’.

StatsSA’s explanation: “This sharp fall in the unemployment rate in quarter 2 is not a reflection of an improvement in the labour market but rather an effect of the national lockdown, since the official definition of unemployment requires that people look for work and are available for work. In essence, the national lockdown hindered people from looking for work, so this significant decline in unemployment while employment is declining is inherent in the official definition of unemployment.” Who would have guessed that Covid-19 would result in the reduction of the official unemployment rate?

Before accepting it as a positive, consider that the official definition of unemployment is a ‘strict’ or ‘a narrow’ definition, which includes only active job seekers. If the non-searching unemployed are included, it results in a ‘expanded’ or a ‘broad’ definition, which truer to form increased by 2.3 percentage points to 42.0% in the second quarter of 2020 compared to the first quarter of 2020. The expanded definition is reflective of the fact that people were available for work but did not actively look for work, for they were not able to do so.

Before you try taking another positive out of the fact that the majority of employed persons continued to receive pay during the lockdown, actually about one in five, or 20%, of those employed had a reduction in their pay or salary.

If there is a lesson – life lesson – to be learnt from the effects of Covid-19 on the South African economy, StatsSA has identified a relationship between the level of education and reduction in pay or salary. Almost nine in every ten employed graduates, 89.7% to be exact, continued to receive a full pay or salary, compared to 75.2% of those with less than matric (standard 12).

Unfortunately, what the StatsSA release does not address is youth unemployment.

The www.internationalbanker.com article of January 21, ‘Unemployment in South Africa: Urgent Attention Required’ states that “One of the most alarming statistics is that those aged between 15 and 24 years are experiencing a horrendous unemployment rate of 58.2%. Youth unemployment rose dramatically between 2008 and 2018, from 44.9% to 54.7%.”

As British historian Thomas Carlyle reminds, “A person willing to work, and unable to find work, is perhaps the saddest sight that fortune’s inequality exhibits under this sun.”