The recent headline – ‘BREAKING NEWS: Jobs bloodbath in the first quarter as formal employment falls’ – was one among several arising from the release of Stats SA’s latest Quarterly Employment Statistics (QES), indicating that there were 21 000 fewer formal, non-agricultural jobs at the start of 2023, compared to the end of 2022.
That is bad news. But, on closer inspection, it gets worse and more complicated.
According to the QES, which is based on surveying employers, the number of full-time employees dropped by 63 000 between the fourth quarter of 2022 and the first quarter of 2023, with a partial – 42 000 – increase in part-time jobs.
This partly conflicts with Stats SA’s other labour publication, based on surveying households, which indicated an increase in jobs between the fourth quarter of 2022 and the first quarter of 2023, though the QES data call this into question. Quarter-to-quarter indicators can be conflicting for many reasons, though looking for broader trends should iron out some creases.
So, looking back to June 2018 in the QES report one sees an estimated 9 034 000 full-time formal employees. But in the latest report this figure has come down to 8 818 000, a drop of 216 000 formal jobs.
It is difficult to exaggerate how impressive that is, in a negative sense. Many peer markets, including much poorer countries, experienced the return of pre-lockdown jobs by 2021 and have since had massive job-booms. But not us.
Then there are the population numbers. Stats SA’s 2018 mid-year population estimate indicated 57 725 600, which grew to a population of 60 604 992 by mid-2022. That means 2 879 000 more people and 216 000 fewer full-time formal workers.
Except it is worse than that, because the population has subsequently increased even further during the 2023 round of job-shedding, but it is not clear by how much. Stats SA conducted a theoretically total ‘census’ last year, whose results it was supposed to publish instead of the mid-year estimates. In April 2022 a ‘mop-up’ was supposed to collect data on the missing 5.4 million households not captured during the formal census. The ‘mop-up’ status is unknown.
Bad news on jobs
Back to the bad news on jobs, which are not only going down in quantity, but also, maybe, in quality.
The latest QES indicates that ‘Gross Earnings’ dropped by 4%, which is partly due to a typical, seasonal post-December drop in bonuses, but partly due to a 1.6% drop in total basic salaries. In current prices, the QES report says average monthly salaries dropped from R26 002 at the end of last year to R25 304 at the end of March 2023.
Again, it is worth looking at broader trends to see if this bad news is exaggerated. The QES indicates that average monthly earnings were R20 524 in May 2018, and are now R25 304, a 23% increase. But then again, what about inflation?
Table 11 of Stats SA’s QES is supposed to represent ‘average monthly earnings at constant prices’, meaning inflation is taken into account. This table says monthly average earnings were R19 146 in May 2018 and came up to R23 451 in February 2023, at ‘constant prices’.
So that looks like good news. The problem is that the numbers in between do not make any sense. The graph is seriously worth looking at.
This is absurd, suggesting incomes were flat, then spiked in the winter-spring of 2021 by 20%, and then flattened again. It is a mockery of the mind, and Stats SA’s QES reports have reproduced these numbers for a year.
It turns out that Stats SA used one inflation baseline for all the numbers used until August 2021, and another for the rest. The big positive jump is not real, it is just a statistical trick.
Yet, other than my colleague, Mlondi Mdluli, no one else seems to care, which is distressing given how many journalists report on Stats SA’s jobs numbers.
With a proper inflation adjustment, the average monthly earnings are now lower than they were in May 2018. Combine that with fewer jobs and more mouths to feed and you begin to see the horror. There are an estimated 4.7 million children in South Africa stunted by malnutrition.
We calculated the inflation numbers ourselves based on the total gross earnings table and the picture that comes out is stark.
What Stats SA is looking at is a wretched real-time documentary. The statisticians are under threat on multiple fronts, especially Stats SA’s reports on intra-racial income inequality which came out regularly until 2015 and not since.
When the latest QES report came out, Mdluli began corresponding with Stats SA – almost two weeks later he got a response, though there are many more questions to ask.
The slow response is unusual. Stats SA workers are generally prompt, professional, and excellent. Their work is so much more important than they are given credit for. Their new property data are world class. I love Stats SA even more than I love our national jewels, the Springboks. Stats SA are our eyes, and the ‘jobs bloodbath’ is the most important brute fact that they behold. The gaze must be kept analytically clear.
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