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Wednesday, July 28, 2021

Youth unemployment: Is the solution a change in mindset?

THEBE MABANGA|

Lerato Malau (32) from Kwa Thema in Ekurhuleni has a degree in Human Resources but has never been able to find work in her field since graduating five years ago.

Malau says she is instead finding short term roles as an administrator at a local doctor’s rooms or a cashier at a large retail chain.

“I took the cashier role hoping it can lead to opportunities to be trained as a manager or lead to an opportunity in human resources, but in the year, I was there no opening occurred,” she say in reference to a stint that was cut short on the onset of Covid 19 pandemic.

Adding that her work hours were immediately reduced at the onset of the lockdown.

Malau is now hoping to register for Post Graduate Diploma in Human Resources as a way of updating her knowledge in the field and hopefully landing a proper job.

Experts say South Africa’s youth will continue to face bleak employment prospects unless the country creates jobs aimed at lower skilled and lower paid workers to absorb the armies of the unemployed in the short term and in the medium to long term.

According to two prominent economists, the country must undertake major economic reforms and better manage public resources to create employment.

Last week, Statistics SA reported that there are now 7,2 million unemployed people out of a workforce population of 22,2 million, to yield and unemployment rate of 32, 6%. This number excludes the 3,1 million job seekers who have given up looking for work. Stats SA’s latest survey shows that the expanded unemployment rate for black Africans was 47.9% during the first quarter of 2021. For black African females it was 51.5%. In the Eastern Cape and Limpopo, the unemployment rates for people of all races were 49.6% and 49.5% respectively. The expanded youth unemployment rate was a staggering 74.7%.

READ: South Africa’s youth unemployment crisis – a ticking time bomb

In an interview with Inside Education, economist and founding director for the Centre for Economic Development and Transformation Duma Gqubule said South Africa should aim to create jobs for the workforce that it has not the workforce it wishes it had.

Gqubule said the country must aim to absorb low and semi-skilled workers through labour intensive sectors that have high employment multiplier and job creation potential. These include agriculture and manufacturing, he said.

In his analysis of the labour market between December 2008 – at the start of the Global Financial Crisis – and the end of first quarter of 2021’s Quarterly Labour Statistics released by Stats SA this month, Gqubule found that over the 13-year period, South Africa created only 226 000 jobs while its labour force has grown by 5,7 million over the same period.

He said the manufacturing sector, frequently cited as a source of new jobs, has in reality lost 600 000 jobs while the trade sector lost 356 000.

According to Gqubule, financial services added 758 000 jobs in the period an indication of where jobs of the future might lie.

Gqubule said he uses the broader definition of unemployment, which includes discouraged work seekers, and puts unemployment at 43,2%.  He said South Africa should look to areas such as the green economy to create jobs.

READ: Youth unemployment: A catastrophe

Iraj Abedian, the CEO of Pan African Advisory Services said without implementing urgent reforms, South Africa will not achieve a dent in its unemployment rate.

He said unemployment will not be addressed by policy ideas, but actual implementation.

“For example, policy conversations about freeing up the communication spectrum have gone on for more than a decade.  

“Freeing up the spectrum sill improve access to the internet and general connectivity and lead to competitive telecoms pricing. This will benefit all sectors including the service sectors and even agriculture, which requires reliable connectivity before the exchange of goods,” said Abedian.

Last week, President Ramaphosa announced that the threshold for embedded generation will be lifted from 1MW to 100 MW.

This announcement was welcomed by many in the business sector and some analysts. Abedian called the move a step in the right direction but noting that it will not be enough on its own and “could have been done a decade ago”.

According to Abedian, reforming the energy sector earlier could have created between 250 000 to 300 000 jobs in the sector itself before boosting other sectors.  

He said apart from telecoms and energy, South Africa also requires reform in areas such as logistics and transport, where government aims to free up space in rail and ports to make them more competitive.

The lack of employment or employment opportunities is even more dire when one looks at youth unemployment. Gqubule told Inside Education that there are 2,3 million unemployed young people.

He said government efforts aimed at addressing youth unemployment have so far yielded limited results.

“The Youth Employment services of the Presidency set out to create 3 million jobs for young people but according to its website, has created 55 000 opportunities,” he said, calling this lack of progress “shameful”.

Abedian told Inside Education that the problem with South Africa’s youth is that the 1994 democratic breakthrough coincided with technological revolution which has evolved to the Fourth Industrial Revolution, yet the country’s education system did not keep up with this change, which then rendered its youth skills irrelevant.

 “The mismanagement of public resources and corruption has not helped matters,” said Abedian.

He added that unemployed young people, especially graduates, require “a change of mindset and reskilling” to suit the job market.

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