Jobless youths wait for work. Picture: SOWETAN
Jobless youths wait for work. Picture: SOWETAN

The unemployment crisis is expected to worsen in the third quarter as more companies have issued section 189 notices to employees, according to labour federation Cosatu.

This comes as the Quarterly Labour Force Survey showed on Monday that the dire unemployment rate remained high at 27.7% in the second quarter.

Employers issue section 189 notices as a formal signal of impending retrenchments.

According to the survey, released by Statistics SA, employment figures fell and the number of jobseekers declined 37,000 to about 6.2-million, resulting in an unchanged unemployment rate.

Commenting on the jobs situation, Cosatu spokesman Sizwe Pamla said on Monday: “Eighteen months ago, it was a crisis, it is still a crisis and it’s worsening.

“When you consider the fact that over the last six months, we’ve seen more section 189 applications, it’s clear the third quarter is going to be worse.”

Last week, Pick n Pay, which has cut 3 500 jobs, said it would embark on a second round of retrenchments, while AngloGold Ashanti said in June it could cut up to 8,500 jobs.

“You are not going to solve unemployment if you leave it to the workers at ground level. The problems are beyond workers at the shop floor level, when they have no participation in the reasons,” Pamla said.

South African Federation of Trade Unions (Saftu) general secretary Zwelinzima Vavi said: “The job loss blood bath is unprecedented. The slaughter has continued unabated.”

Saftu had seen indications there would be thousands of job losses by the third quarter.

“The public sector is not spared. We are going to see job losses in the sector,” Vavi said.

Business Unity SA CEO Tanya Cohen said SA was likely to see more of the same in future. “It seems the statistics are a reflection of the economy being in recession and the poor levels of business confidence.”

Mining has shed 70,000 jobs in the past five years, with more expected in coming months. The construction industry and agriculture were the worst hit by job losses in the second quarter.

Agbiz economist Wandile Sihlobo said this was not unusual for agriculture. “This is in line with the season’s trend due to reduced horticultural activity in the second quarter.”

The industry is expected to pick up at least 2% in the third quarter if the Western Cape receives the rainfall it needs.

“Heightened ... uncertainties have impacted the economy, particularly where substantial capital outlays are needed,” NKC African Economics economist Elize Kruger said.

Investec economist Kamilla Kaplan said: “The declining growth trend since 2011 and stagnation in 2016 have pushed up the unemployment rate.”

 

menons@businesslive.co.za

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