Trajectories for South African employment after COVID-19

Abstract

The COVID-19 health response shut down the South African economy for a period, and then continued to constrain face-to-face services such as tourism, hospitality and personal services. These industries create the majority of jobs in all middle- and high-income economies. The COVID-19 interventions further aggravated pre-existing and rising unemployment and poverty levels. By 2021, only 42% of the working-age population in South Africa was employed, as compared to the National Development Plan’s target of 60% by 2030. South Africa has had high unemployment since at least 1978, with an historical policy path that appears to direct the economy towards slow growth and low employment. This article outlines the results of employment scenarios modelling: the purpose is to envisage the future of employment in South Africa in the context of the COVID-19 pandemic, with a view to 2050. Two ‘plausible’ scenarios are modelled. The upper and lower trajectories are aligned to historical growth paths between 1970 and 2019, with three decades experiencing an average 1.5% GDP growth and two decades an average 3.6% growth. An average economic growth rate rising from 2% to 3.5% between 2022 to 2050 would result in the achievement of the National Development Plan’s employment targets. The modelling also shows what the employment trajectory might have been in the absence of the COVID pandemic.

Significance:

• This article evaluates the potential pathway for South African employment after COVID-19.
• After a rapid and significant fall caused by policies to manage COVID-19, employment might only recover to peak 2018 levels by 2024–2026.
• The COVID-19 pandemic may have long-term implications for employment. In the absence of the pandemic, there could have been between 500 000 and 1.6 million more people working by 2050.