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Ever wondered how many people in South Africa work in the restaurants and hotels industry in South Africa, most of whom are currently not earning a salary or income due to the closer of these businesses during South Africa's 21 day lockdown.
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Potentially how many people in restaurant and hotel industry will be affected by Coronavirus?
The line chart below shows the number of employees in the restaurant and hotel sector in South Africa, according to data published by Statistics South Africa (Stats SA) in their Quarterly Employment Statistics (QES) survey which covers employment in the formal non agriculture sectors of South Africa, as well as the gross monthly earnings earned by these employees.
As at the end of December 2019 there were 330 385 people employed in the Restaurant and Hotels sector, which means the sector makes up 3.23% of the 10.215 million people employed in the formal non-agriculture sector in South Africa. The total gross monthly earnings by these 330 385 employees in this sector amounted to R2.936 billion, or R26 664 per employee in the Restaurant and Hotels sector in South Africa, which amounts to just 1.13% of total gross monthly earnings earned in the formal non-agriculture sector in South Africa. So while the contribution to total number of employees is over 3% of total employment, gross earnings only makes up just over 1%. What this says is that employees in the sector earn a lot less than those employed in other sectors. So relatively low paying jobs in the sector.
The graphic above tells story about the growing employment in the industry but the flattening of average gross monthly earnings. As the labor market is flooded with new entrants looking for jobs, the easy sector to get a job in without requiring any degrees is the restaurant and hotel sector. Since a lot of people are willing to work as chefs, cooks or waiters there is a readily available supply of labor, which means increased competition, which keeps earnings growth to a minimum. If a person is unwilling to accept low pay increases, restaurants will happily let them go as they know there is a host of others that would jump at the opportunity to get a job.
The worrying thing for these 330 385 employees is the fact that the Coronavirus and the impact its having in South Africa with South Africa currently being in the middle of a 21 day lockdown means their usual places of work is closed for 21 days. And a large number of these employees works on no work no pay principle or perhaps get tips only. So they wont be earning any money in coming weeks and potentially coming months a s a large number of restaurants, B&B's, guesthouses etc will close down after the lockdown as they cannot afford to lose business for 21 days.
The graphic above tells story about the growing employment in the industry but the flattening of average gross monthly earnings. As the labor market is flooded with new entrants looking for jobs, the easy sector to get a job in without requiring any degrees is the restaurant and hotel sector. Since a lot of people are willing to work as chefs, cooks or waiters there is a readily available supply of labor, which means increased competition, which keeps earnings growth to a minimum. If a person is unwilling to accept low pay increases, restaurants will happily let them go as they know there is a host of others that would jump at the opportunity to get a job.
The worrying thing for these 330 385 employees is the fact that the Coronavirus and the impact its having in South Africa with South Africa currently being in the middle of a 21 day lockdown means their usual places of work is closed for 21 days. And a large number of these employees works on no work no pay principle or perhaps get tips only. So they wont be earning any money in coming weeks and potentially coming months a s a large number of restaurants, B&B's, guesthouses etc will close down after the lockdown as they cannot afford to lose business for 21 days.