South Africa set an unwelcome world record when our unemployment rose to a record 34.9% in the second quarter, which would be the highest of 83 countries tracked by Bloomberg.
With this being said, South Africa was already facing an economic crisis and unemployment disaster prior to the pandemic. Covid-19 was simply the catalyst which resulted in roughly 3 million South Africans losing their jobs, of which 2 million were women; 1.5 million South Africans received zero compensation in April.
What is next?
“Based on scenarios for the post-2020 economic recovery, it could take three to seven years before employment returns to 2019 levels,” said Christie Viljoen, a Cape Town-based economist at PwC.
It is important for employers to realise that their employees are under financial strain, caused not only by the lockdown but also the psychological effect which the pandemic has had on our fellow South Africans. It is vital for employers to acknowledge that they cannot ignore the situation which their employees find themselves in. 80% of employees require unsecured credit to make ends meet because they have to wait to be paid. This problem has been magnified by the worst economic crisis in a century. The question we’re asking is why can’t we access our wages as we earn them? Why should an employee have to borrow money at 50% interest while they have money owing to them, sitting in their employer’s bank account?
These are some very important questions which need to be seriously considered and answered by employers to reflect on whether they truly want the best for their employees and their wellbeing.
How does SmartWage fit in?
Excellent question. In short, we are working hard to be South Africa’s most affordable and accessible wage-access software, ensuring that we uplift the African continent for generations to come through responsible, sustainable and scalable business practices. Our mission is to eradicate the payday poverty cycle through access to earned wages and financial education, and through this create a future where no one should have to wait to be paid.
Your employees are looking to you for help, and advice during these unprecedented times. If you truly care about your employees, we encourage you to get in touch with us to find out how we can help you and your employees enjoy a more financially comfortable and inclusive future.