YOUTH UNEMPLOYMENT CRISES

With unemployment sitting at an eight-year high of 26.6%, few can argue that something is going drastically wrong

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Among young South Africans aged between 15 and 24, a total of 37.5% or 3.2-million are neither employed nor enrolled in education or training, revealed Statistics SA’s Quarterly Labour Force Survey in June. Young people, and women, in particular, are the most vulnerable, resulting in a global youth unemployment rate that is almost three times higher than the rest of the global population

If not addressed as a matter of urgency, the situation is expected to increase levels of frustration and impatience among the youth. In addition to this, the situation will contribute to a cycle of chronic unemployment and poverty: these young people are likely to become the parents of children who will then also grow up in a context of poverty.

Disturbing trends

The difficulty for those between the ages of 15 and 34 struggling to access decent employment opportunities has translated to the social and economic exclusion of this cohort. It has been a central issue for the last decade but despite a plethora of national directed policy options, the problem has remained pervasive and in fact, has worsened during the period. Since 2009, the share of those between the ages of 15 and 34 in the working population has fallen from 42.6% to less than 38% in 2016. Official unemployment rates for the cohort suggest that more than 48% find themselves without work. Recent figures released by the International Labour Organisation suggest that South Africa has the third highest youth unemployment rate across the globe.

It is a situation which poses a major threat to the country’s ability for future economic prosperity and which hampers the capability to vest a foundation on which a thriving and productive labour force could be built.

Apart from the struggles in procuring employment, a particularly disturbing trend is that more young people have stopped looking for work. Since 2008, young discouraged work seekers (those who are not economically active) have increased by 8%. Furthermore, when focusing on those between the ages of 15 and 24 years—those who would be entering their first job or continuing their studies—approximately a third are currently not in employment, education or training.

Not only does the group represent those who are more susceptible to chronic unemployment, but the lack of investment in their productivity brings with it an erosion of skills and consequently, lower future probabilities of securing a job. The significance in the lack of providing opportunities for the youth attributes consequences to both the individual and their societies.

Evidence suggests that facing long-term spells of unemployment early in an individual’s career imposes the youth’s future probability of finding work, which increases the intergenerational nature of poverty. For society, the exclusion of young and inexperienced work seekers has been largely associated with the induced criminal activities, violence and substance abuse that affect the community’s quality of life.

When focusing on 15 to 24-year-olds—those who would ideally be finding their first jobs or continuing their studies—just under a third are not in employment, education or training. This group is arguably the most vulnerable to chronic unemployment, poverty and social exclusion, as they are neither improving their skills through education nor gaining the work experience needed to progress in the labour market.

Racial and gender inequalities continue to play a significant role in the youth unemployment landscape in South Africa. African and coloured youth are far more vulnerable to unemployment than their white or Indian counterparts; young women are more likely to be unemployed than their male counterparts.

A complex challenge

Evidence suggests that youth unemployment in South Africa is a multi-layered problem that needs a multi-directional approach. The biggest factors are the evolving nature of the labour market and mismatches between the skills needed in the labour market and those provided through the educational system. Research indicates that a key difficulty facing young work seekers, in particular, is the fact that South Africa’s labour market favours highly skilled employees and currently, there is a lack of skills. We often equate unemployment with a lack of available jobs but one of the key issues at the heart of unemployment in South Africa is an inadequately educated workforce. Statistics South Africa recently revealed that 27.7% of the South African population is unemployed with 54.3% of that constituting the youth. Skills shortages have been identified as one of the main factors in unemployment rates and there is a general consensus that South Africa needs to increase the overall skill level of our entire population.

In addition, South African employers, in their apparent distrust of the quality of education received by young people, have raised the bar for entry into low-level jobs ever higher. But by escalating the educational requirements for entry-level jobs, employers are effectively shutting out a large pool of potentially good young employees.

The uneven quality of South Africa’s public schooling system further entrenches inequality in terms of finding employment. Many of the poorer children at schools, who are often under-resourced and ill-managed, very quickly fall behind in their learning, later on, they drop out of school and then become part of the excluded groups.

To achieve the right skill level, a multi-level skills strategy is required, this being that more individuals should have qualifications at higher levels. However, at each level of the workforce, new skill sets are required for technological advancement and moving the economy as a whole to higher levels of development. What is equally important is whether learnerships and apprenticeships are developing these skill sets and capabilities.

Geographic location also acts as a barrier to employment. Young people living outside the major metropolitan areas have to spend more time and money on looking for work. Other barriers include limited social capital and limited access to information.

A recent national study of participants in a youth employability programme reported that the average transport and other work-seeking costs for young people were around R560 per month. This stands against the average per capita household income for the same group of youth, which is R527 per month.

Poverty at the household and community level further complicates the situation. More than half of young people aged 15-24 live in households with a per-capita monthly income of less than R779 (the “upper bound poverty line” as defined by Statistics South Africa). Many lack access to information as they are unable to afford the high costs of data so they can’t use mobile phones or Internet cafés to search for job opportunities or for post-secondary education opportunities.

And, unlike their middle-class peers, poorer young people lack “productive social capital”—social networks that can be used for information about and access to the labour market. These are important for navigating entry into the labour market.

Short-term interventions

It’s clear that the challenge of youth unemployment is a structural issue requiring massive policy investments, political will and time. But it’s equally important to concentrate on what can be done in the interim.

Ways must be found to shift the labour market to be more youth-friendly. One option is “impact sourcing”. This involves employers being encouraged to review their recruitment criteria to reach candidates who might not normally be seen as employable. Another solution could be a national transport subsidy for job seekers.

Local-level youth employability programmes, often run through non-governmental organisations, are another possible intervention. They can help young people access information about jobs and support them to be more effective in looking and applying for jobs. But many operate on a small scale and are expensive to run. Evaluating their impact and finding ways to take the most efficient ones to scale could make a difference.

South Africa faces the risk of seeing the challenge as being insurmountable and doing nothing in the short term. The evidence suggests that, while there are major structural challenges, there are also some promising options to pursue.

There are some fundamental discrepancies in our education systems that bring about this situation of unemployment and also the lack of decent employment among the youth. It is often argued that our schools fail to prepare the youth for the dynamic market outside. The lack of marketable skills amongst the youth makes it more difficult for them to find decent employment.

Increased encouragement

As skilled individuals come out of universities, the job market is already highly saturated that there is no to create new jobs. Even the private sector is running at full capacity. As more FDIs flow in and the new ventures come about, this is mitigated to a certain extent, but the rate of skilled labour being made available far exceeds the rate of creation of jobs for them. There are more workers and fewer jobs.

The challenge lies in the fact that many young people are hesitant to move to start-ups of their own. This is often as a result of misconceptions regarding the risks involved. Yes, there are significant risks, but with the government’s backing, youth should change their mindset and take calculated risks.

The rise of young entrepreneurs such as Mark Zuckerberg has put the spotlight on the youth and has posed the question of the readiness of South African youth to be high-quality entrepreneurs. Although prizes such as Anzisha Prize (a prestigious prize, which platforms the top youth entrepreneurs across Africa) have showcased a number of South African youths producing exemplary products and services, there remains a large number of youths in our country who are highly challenged.

The challenge to produce young entrepreneurs is caused partly by the South African economic landscape and the lack of skills in South Africa. The BBBEE codes of good practice place an emphasis on growing black-owned SMEs. However, many of these entrepreneurs, mostly from poor backgrounds, have very little context for what high-quality entrepreneurship truly entails. There are a number of success stories but in order to create growth in the economy and employment, a groundswell of successful businesses must be created. Many of the entrepreneurs run enterprises, which are still at the survival stage.

Many entrepreneurs from poor landscapes do not have role models for excellent entrepreneurship and thus, can’t replicate and add to a healthy entrepreneurial ecosystem. Furthermore, the lack of a support system produces a lack of confidence in their skills.

The best resource a country has is its youth. We cannot afford to lose them and we cannot afford to let them leave for career prospects abroad because of the inadequacy of opportunities here. Brain drain has made developing countries suffer for so many years and we cannot even begin to understand the loss it has caused to our national development.

It is a country’s duty to look after its youth. If a government cannot afford to find jobs for each young person out there, it is still bound by the duty to help them to create their own.

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