Impact of COVID-19 and lockdown on employment in South Africa; DPME on its monitoring and evaluation assessment of departments responsible for securing of jobs

Meeting report

The Chairperson said it was unfortunate both the Minister and the Director-General of the Department of Planning, Monitoring and Evaluation (DPME) could not be present at the meeting.

After the presentation from DPME and the discussion with Committee Members, the Committee planned to engage and adopt its Budgetary Review and Recommendations Report (BRRR).

Dr M Cardo (DA) said the BRRR was sent to Committee Members quite late in the day, and there was not enough time to consider the report. There is no report from the Unemployment Insurance Fund (UIF) and the Compensation Fund yet. The Committee should first digest the contents of the BRRR before it proceeds to consider the report.

The Chairperson asked for clarity as she was under the impression the report was sent out on Monday. She apologised for the miscommunication which led to the report being sent to Committee Members late. The Committee cannot withhold its duties of adopting the BRRR because the UIF and the Compensation Fund have not yet submitted its reports.
Dr Cardo said the Committee would be engaging in a box-ticking exercise if it continues to adopt the BRRR without having had sufficient time to go through the report.

The Chairperson handed over to the Departments to continue with its presentations respectively, and said the Committee will continue with discussions after the presentations, if Members so agreed.

Statistics South Africa (Stats SA) Quarterly Labour Force Survey, Quarter Two 2021
Ms Nozipho Shabalala, Acting Deputy-Director General: Population and Social Statistics, Statistics South Africa (Stats SA), presented on behalf of the Statistician-General, who was presenting at another Portfolio Committee meeting where Stats SA was also presenting. She said the presentation was based on the results of the Quarterly Labour Force Survey (QLFS), quarter two, 2021, between April and June.

Ms Shabalala gave a brief background to the survey, noting it was conducted amid the COVID-19 pandemic. The restrictions put in place to combat COVID-19 created a barrier to the normal approach for data collection and operations. There was an increase in the demand for information during the period under review. Stats SA needed to come up with alternative means of collecting data during the pandemic. Collection methods were changed from normal face to face methods, to computer assisted telephone interviews. The interviews were then conducted with the respondents telephonically. The Department met with a challenge where respondents on the samples did not have contact numbers. Data was collected from part of the sample where contact numbers were readily available. This may have produced a bias but there were adjustments for these biases.

There was an increase in unemployment rates, which discouraged work-seekers between quarter one, 2021 and quarter two, 2021. There were 7.2 million people unemployed in quarter one and this number increased to 7.8 million in quarter two, 2021.

Quarter one, 2021 reflected 3.1 million discouraged work-seekers, and the number increased to 3.3 million in quarter two, 2021.

Statistically, those classified as ‘Not Economically Active’ (NEA) constitute 38.7% of students; 19.7% of discouraged work-seekers; homemakers are at 16.4%; those too old or too young to work make up 9.7%; and those living with disabilities or illnesses make up 9.0%. The number of NEA declined by a considerable amount of 386 000 in quarter two, 2021. The Department observed an increase in the labour force participation rate in the ten year period between 2011 and 2021, from 55.9% to 57.5% in quarter two, 2021.

There was a 1.1% increase in the labour force participation rate. It rose from 56.4% in quarter one, 2021 to 57.5% in quarter two, 2021. There was a significant dip in the labour force participation rate which resulted from the first Level Five lockdown period.

Ms Shabalala gave an overview of the unemployment rate for the period between 2011 and 2021. During this ten year period, there was an increase from 25.6% to 34.4%. The Eastern Cape province recorded the highest official unemployment rate and the highest official expanded unemployment rate. Limpopo and the Northern Cape have more than 15% between the expanded and official unemployment rates. There has been employment growth throughout all the sectors however the sector classified as ‘private household’ remained the same between 2011 and 2021. The formal sector employment grew from 9.8 million in 2011 to 10.2 million in 2021. The formal sector accounts for 68.3% of the total employment in South Africa. This sector decreased by 375 000 jobs between quarter one, 2021 and quarter two, 2021. There was a growth in employment rates of industries such as construction, trade, agriculture, private households, transport, utilities and mining. There was a decrease in the manufacturing, community and social, and finance sectors. There were education assistants appointed by the Department of Education, however the education assistant’s contracts ended in quarter two, which resulted in the decrease of employment in this industry.

Ms Shabalala noted the shares different industries have in relation to the Gross Domestic Product (GDP), with community and social services being the biggest contributor, at 22.7%.
There was a negative relationship indicated between the level of education and the unemployment rate. The higher the level of education, the lower the unemployment rate was, and vice versa. Graduates showed an 11% unemployment rate in quarter two, 2021 and persons who have some schooling but did not graduate matric showed a 39.1% unemployment rate. She also highlighted the statistics of employment rates according to the different age groups.

Discussion
Dr Cardo asked if budget cuts or any other constraints placed on Stats SA regarding resources created any barriers on the process of collecting data. He asked if this has this has not compromised the legitimacy of the figures presented to the Committee.

Ms N Mkhonto (EFF) asked how the migration from face-to-face, to telephonic interviews impacted the means of collecting data in rural areas. She asked what the effects of loadshedding were, because in most cases when there was loadshedding there was no network. She asked the Department to clarify what exactly the cause of the increase in unemployment numbers in the finance sector was. She asked if it was because of COVID-19 or because of the finance sector moving to the virtual space.

Mr S Mdabe (ANC) asked if the unemployment numbers between 2011 and 2021 takes into account population increases. He asked what the percentage difference was in relation to unemployed individuals during the time of the survey comparison. He also wanted to know what the reasons are behind the agricultural sector having the lowest employment rate. He said, during the presentation it was noted Agriculture was the largest contributor to the GDP during the lockdown period. He asked if technology used in the agricultural sector was a factor contributing to this decrease.

The Chairperson asked for clarity on the statistics of the employment of graduates, specifically in relation to the graduates race, sex, age, sector, and provinces. She said these should also include disability statistics. There was a loud cry of unemployment in the country and the statistics are not clear enough.

She said houses are a private space and asked how the Department goes about engaging with domestic workers in this space. She asked if it is possible for the Department to zoom in on health when it conducts labour surveys. She also asked how the entity conducts its surveys, as the Committee relies on it to give insight regarding if there is improvement on labour absorption in the health sector.

Response from StatsSA
Ms Shabalala said the funding for the Quarterly Labour Force Survey (QLFS) is part of the Stats SA baseline, as it is conducted on a quarterly basis. This survey was not affected by the budget cuts. There are permanent staff members responsible for the work which must be completed. Field workers responsible for collecting data for the labour force survey are part of the permanent structure of Stats SA. As highlighted by the Statistician General in various forums, Stats SA struggled to fill certain positions because of issues with compensation of employees. Stats SA staff are quite stretched. Personnel find themselves working over weekends if necessary. There has been no impact on the numbers produced by Stats SA. The Department will be the first not to release a report based on the quality of the report.

Field workers are sent into rural areas if there are no contact details for sample cases. The interview process is therefore continued telephonically. Loadshedding has been a problem as it presents network issues, however fieldworkers are expected to call several times or make appointments with respondents to figure out an appropriate time in such cases.

Unemployment rates amongst graduates are lower in comparison to those without a degree. Therefore there is a negative relationship between unemployment and level of education. It is possible to further determine the statistics by looking at level of education according to province, and level of education according to sector. This is information the Department can provide if necessary.

When the Quarterly Labour Force Survey is conducted, information is collected from different households. A domestic worker is a household in themselves, as a respondent if you work for someone else it is reported as a separate household from the household you work for. In the case of a live-in domestic worker, this falls under the classification of multiple households. There would be two interviews conducted in such cases, one for the main household and one for the domestic worker.
There are one size fits all approaches in terms of the data collection methods for the Quarterly Labour Survey, and information on where people work is picked up though these interviews. The intensity of the information on the health sector will be informed by the sample size received, and only then will the Department be able to de-segregate health according to province and any other variables.

Ms Malerato Mosiane, Chief Director: Labour Statistics, Stats SA, said when information is collected, respondents are asked for the various industries where respondents are employed. A coding system is then used to establish the various industries in the system. The samples are designed to code only at one-digit levels for reliable estimates. This does not allow for clear estimates of how many employees work in the health sector. The sample size would need to be increased, unless funding is provided.

There is currently no question on disability in the QLFS. The Sustainable Development Goals (SDG) reporting requires information to be desegregated by disability status. There are currently talks to start incorporating disability questions in the QLFS.

It is highly likely the increase in unemployment numbers of the finance sector is due to COVID-19. Most businesses closed during the lockdown period. The estimates between quarter one and quarter two of 2021 reflect there were only 8 000 estimated job losses in the subcategory, which includes banks.

The working age population in quarter one, 2021 was 39.4 million and in quarter two it was 39.6 million. There was an increase of 584 000 unemployed people between the two quarters. The percentage increase in the working age population was 0.4% and unemployment was 7.5%. Unemployment is growing at a faster rate than the population increase.

Agriculture has a higher employment share relative to the GDP, it contributes 2.8%. Regarding employment, it accounts for 5.7% of the total employment. Agriculture is a labour intensive sector and it employs more people than its contribution to the GDP.

The Chairperson thanked the Department for its presentation and said perhaps at a later stage if the Committee may be allowed, the Committee could make further contributions to areas where the method of reporting does not cater for a few issues on job creation.

Department of Planning, Monitoring and Evaluation (DPME): Monitoring and Evaluation Pertaining To Departments Responsible For Securing Of Jobs (2020/21)
Ms Palesa Shipalana, DPME, presented on the efforts of job creation by the Department of Employment and Labour (DEL). She said the efforts to monitor the Department of Employment and Labour were restricted regarding the process of collecting data from Stats SA on the employment status in the country.

The DPME also relies on the Medium-Term Expenditure Framework (MTEF) targets for 2019-2024.

The methodology the Department uses to create employment is the results-based Management and Theory of Change, to monitor outcomes and impact-based results.

The strategic intent of the sector is to unite South Africans of all races and classes around a common programme to address the triple challenges of poverty. The objectives entail achieving full employment, decent work, and sustainable livelihoods to improve the standards of South Africans by 2030.

Labour market indicators worsened over time and official unemployment increased. The total unemployment between quarter one, 2021 and quarter two, 2021 also increased. Labour force participation decreased.

Through the Presidential Employment Stimulus: Phase One, the government provided 694 152 employment opportunities, as of 31 March 2021. An estimated 422 786 job opportunities were created or retained, while 109 394 were awards issued for livelihood support. Phase One of developing the National Employment Policy is currently underway. It is estimated it will be ready by 31 March 2022. This policy is aimed at fostering demand-led employment growth and it puts emphasis on the implementation and institutional concerns which underscores demand side policy, which can promote full productive and freely chosen employment.

The draft of the Labour Migration Policy is due for submission to Cabinet at the end of 2021. The policy has gone through the parliamentary process to seek approval for consultation. South Africa attracts a lot of migrant workers within the region, which affects the employment in domestic sectors such as Hospitality and Transport. There were also issues regarding truck drivers. This policy aims to create a balance between the demands of South African labour and migrant labour.

Out of 29 targets set out by the Department of Employment and Labour, only 19 were achieved and ten were not achieved. This reflects a decline from the 79% performance achieved during the 2019/20 financial year. This is largely because of the restrictions of COVID-19. Out of the ten targets not achieved, six were from Programme One. An amount of 178 489 of the targeted 188 323 employers were inspected to determine compliance with employment law.

Overall, the Department only filled 28% of funded posts within four months of becoming vacant, against a target of 80%.The DPME has a performance dashboard which indicates the different levels of performances and targets which are met in the stipulated period.

She outlined the key challenges faced by the DPME and highlighted the recommendations it made regarding fast-tracking progress.

Discussion of the DPME Report
Ms K Mkhonto (EFF) said she does not quite understand the roles and responsibilities of the DPME. The role of the Department is to create a good environment to deal with labour related concerns, but the presentation focuses on the National Development Plan (NDP) which must achieve a certain percentage for growth of the economy by 2030. This is a long period and she asked for this to be divided into three-year progress report periods.

She asked what the Department is doing to improve the decreasing statistics. She said it is the DPME which must ensure other departments, together with the private sector are able to perform as expected for desired results to be achieved.

Mr S Mdabe (ANC) asked what the Department does after monitoring and evaluating the performance of other departments. He asked which recommendations the Department made and said the recommendations mentioned in the Report were incorporated in the annual report of the various departments. He said that there is no indication of the role played by DPME to ensure there is progress.

The Chairperson said there may be confusion of the role of the Department of Employment and Labour in the creation of jobs. She proposed to the Committee that DEL should be called to provide clarity, with the Minister and the Director General in attendance.

Ms Mmakgomo Tshatsinda, Deputy-Director General (DDG): Sector Monitoring, DPME, said the NDP is a long-term plan. The Department has the MTEF to implement it. The Medium Term Strategic Framework (MTSF) cuts the period of implementation into a period of five years.

All departments are meant to contribute to job creation in South Africa. The mandate of the DEL is to provide an environment conducive to creating these opportunities for employment. There are 11 key departments which each have one priority. This is the target for the period of five years.

The recommendation is to engage in the process every three years. It is currently being done bi-annually. The Department only finished one year of the MTSF. Half of the second year has already been done; there is a report which is yet to be tabled before Cabinet. The Department is willing to share these reports accordingly.

The Chairperson said there is further confusion, perhaps due to the difference in understanding the roles of the Department. She said the sooner DPME leadership and relevant units which focus on monitoring employment leadership of the Minister and the DG come forward, the better it will be. The Department is being lambasted and the country has a serious challenge of high unemployment. She wanted to know what departments are doing to assist with decreasing these numbers.

Committee BRRR
The Department was dismissed and the Committee proceeded to adopt the BRRR.

Dr Cardo proposed the BRRR should be considered on the following Wednesday, as it was received late by Members.

The Chairperson said she will have to do consultations and proposed the Committee convene again on Friday or Thursday, but leaning more towards Friday morning at eight o’clock.

The meeting was adjourned.