7 Million jobs may be on the line as unemployment rate soars

7 Million jobs may be on the line as unemployment rate soars

- South Africa's unemployment rate is expected to rise to a staggering 50% due to the Covid-19 virus pandemic

- The International Labour Organisation has warned that nearly half of the global workforce could lose their jobs

- Retrenchments are increasing in South Africa and CCMA's Johannesburg office alone has reports 400 cases during lockdown

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South Africa's unemployment rate, which currently sits at 29%, is expected to rise to 50% due to the ongoing Covid-19 pandemic. The global pandemic which has claimed over 350 000 lives has also resulted in job losses on a massive scale.

Co-operative Governance and Traditional Affairs Minister Nkosazana Dlamini Zuma briefed the National Council of Provinces (NCOP) on Tuesday, where she spoke about the economic devastation the virus has had.

She said:

"This is also becoming an economic crisis and how the fault lines in South Africa are so deep. We see hunger, poverty and unemployment and the conditions in which our people live."

The International Labour Organisation warned that nearly half of the global workforce is at risk of losing their livelihoods. The informal economy, which represents over one billion workers and the most vulnerable labour force, has suffered massive damage.

While unemployment poses a global threat, it poses an even bigger one for South Africa, whose unemployment rate puts it in the top four of countries in the world with the highest unemployment rates after Namibia, Bosnia and Angola.

The public has began to wonder about the government's plan to save jobs:

The South African Social Security Agency (SASSA) reported that they received five million applications for their Social Relief of Distress Grant while the Unemployment Insurance Fund (UIF) received just under two million applications. These numbers are expected to increase as more people lose their jobs.

READ ALSO: Man starts vegetable garden to feed his family during lockdown

Dr Dlamini-Zuma said the economy has declined and industries such as tourism have also taken a big hit because of the closed borders restricting travel. She said:

"The tourism sector in particular will be the hardest hit because we have closed the borders of the country and we have closed tourism in the country. Some of the businesses will not survive and vulnerable households have lost a lot of income".

Dondo Mogajane, the National Treasury’s Director-General, issued a warning earlier in May that up to seven million South Africans could become unemployed and the economy could shrink by up to 12%.

Retrenchments have also began all over the country. The Commission for Conciliation, Mediation and Arbitration (CCMA) said the commission witnessed a substantial number of cases with up to 400 cases received in Johannesburg alone.

While the government has begun a process to reopen economic activities to circumvent the grim economic outlook post-Covid-19, Dr Dlamini-Zuma said the government decided to adopt a risk-adjusted approach that focuses on the rate of infection and readiness of the health system.

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Source: Briefly.co.za

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