Business Maverick

Maverick Citizen Op-ed

South Africa’s State of Unemployment Disaster

Parents and children protest in Hanover Park, Cape Town, against unemployment. (Photo: Esa Alexander)

As President Cyril Ramaphosa delivers his 2020 State of the Nation Address you would expect the escalating unemployment crisis to be a prime issue. However, while there’s a lot of talk about the crisis, there’s no urgency for real action and innovations to assist job seekers. Meanwhile, people without work are kept away from those in power, uninvited to sites of planning like the Jobs Summit.

South Africa’s unemployment rate remains 29% – five times the rate for the rest of the world. To most South Africans, even this distressingly high rate does not capture the full extent of joblessness. The headline figure, also known as “strict” or “narrow” unemployment, considers just the seven million people who have actively sought work in the last four weeks.

There are a further 16 million people in the working age (15 to 64) who are rendered invisible, none of them working. They are people who want work but have become discouraged, or people regarded as economically inactive because they report not looking for work.

Considering countries around the world where there is more work to go round, it is clear that in South Africa, most of the discouraged and economically inactive should not just be looking for work, but in work. We are a full ten million jobs short of the world average for employment among the working age. This is especially tragic in the context of the country’s pervasive household poverty where the need to earn money is so clear.

Rendering visible the struggles of the economically excluded poor is one of the key elements of Organising for Work. Struggles like those of Unathi M, a 26-year-old mother trying to finish an accounting diploma at Cape Peninsula University of Technology, who says she feels powerless and unable to build towards the dreams for herself and her daughter. Or Ntombencinci H, a 37-year-old mother of three who says she cannot take care of her children the way she wants to. Or Avuyile P, a 28-year-old father who says the lack of dignity is most painful for him, particularly when he compares himself to those who are employed.

All three are members of Organising for Work’s Harare branch in Khayelitsha, where unemployed volunteers help the local population in their daily search for work. Their struggles, like those of other volunteers and members at branches across the Cape Flats, are not being heard by those in power. Job creation requires addressing many society-wide factors including education, health, and safety, all the way through to energy supply and the international competitiveness of our firms.

Here I highlight just two ways in which those in power could respond to the voices and experiences of the unemployed. Their actions could not just alleviate the burden of the work search but also unlock substantial formal and informal entrepreneurship.

Alleviating employer discouragement of job seekers

Employers impose prohibitive, if avoidable, costs on job seekers; on travel, data to search and apply for jobs, on printing, copying and posting applications, on clothing and grooming. Travel and clothing are two of the more expensive elements that can be mitigated by minor changes to the interview process. Conduct an initial phone pre-screen with candidates to prevent wasteful travel by those with no chance of getting the job, and stop requiring that candidates appear at the interview in your company colours. It can compel even the unsuccessful ones to spend on apparel, often getting them deeper into debt. 

Requiring physical copies of matric certificates, ID, SARS letters, bank statements and more is not just environmentally unfriendly, it imposes further wasteful expenditure on those who can least afford it. The President’s recent announcement extending the period of validity of certified documents illustrates that government, and not just big business, fails to appreciate the senseless cost and effort imposed on job seekers already discouraged by job scarcity. He said government jobs now require certification in the last six months, increasing the period from three months. This extension does nothing to change the fact that the cost of copying documents is placed also on the many unsuccessful candidates for a position.

If these unsuccessful candidates are active job seekers, they have to produce these copies for many other applications. Some relief could come from outlawing the requirement for certified copies altogether except, perhaps, from the successful candidate for a public or private job. Rather, employers could accept online images captured on applicants’ phones. Organising for Work’s CVs contain such digital attachments and our employer partners are starting to accept them.

Making the conditions for informal work more favourable

Due to the dearth of jobs, and difficulties applying for them, many of the members of our unemployed movement report trying out diverse informal activities to make money. These include car washes, hairdressing and beauty services, street vending, clothing resale, catering, car mechanics, wedding services, and spaza shops. However, the chances of successfully eking out a living in these activities are rendered exceedingly low by the presence of large retailers, the distance to wealthier consumers and the lack of trade networks and access to credit.

Those concerned with entrepreneurship and employment should know that our 1:2 ratio of informal to formal work is the wrong way round. The world average is closer to two to one, suggesting that many of the missing 10 million jobs are informal. The range from persistent neglect to active discouragement of informal work involves regressive decisions made by the government at all levels through by-laws, property use restrictions, the scarcity of central markets and the provision of support only to formal businesses.

All forms of substantial support in the country, including credit, require a business plan and burdensome statutory incorporation as a first step. This includes support from the main government body tasked with nurturing budding black businesses, the Small Enterprise Development Agency. Compounding the issue, large retailers are left unfettered to stamp out and out-compete traders, as established in 2019 by the Competition Commission. It found that long-term exclusive lease agreements between national supermarket chains and property developers excluded small businesses and other potential competitors.

Is it any wonder then that we have such a low rate of black entrepreneurship when trading informally barely ever receives a mention by officials and politicians, let alone official support?

Fortunately, there are examples both in South Africa and abroad of types of support that could unlock substantial informal work opportunities in poorer areas. A company headquartered in Cape Town, The Clothing Bank, has trained 3,300 women nationally to become informal clothing resellers. Their programme is rigorous and requires continuous training and commitment from the trainees over a two-year period. According to the programme’s founder, Tracey Gilmour, “many who complete it subsequently diversify into other formal and informal activities such as beauty services and catering.”

Comprehensive governmental support is required that focuses specifically on promoting informal work. It would need to have a presence in high unemployment areas for it to be accessible and to better understand the local challenges of informal entrepreneurship. Ideally, it should be combined with an increase in economic demand in these areas, for example through much-needed infrastructure renewal and rollout.

With such support and stimulus, elements such as The Clothing Bank’s training and credit provision could be adopted by existing and new informal traders’ associations. Around the world, such associations have proven crucial to networking, assisting and demanding rights for informal workers.

Voices of the Unemployed Still Not Welcome

In 2019, after their requests to attend the invitation-only Presidential Job Summit had fallen on deaf ears, the chairperson of the Unemployed People’s Movement, a well-known grassroots formation of the unemployed in Makhanda, showed up at the door and demanded entry. The summit is the pre-eminent event related to job creation. It tasks the Nedlac social partners (government, business, labour and community) with “finding solutions to unlock the bottlenecks identified in job creation including where relevant addressing policy and regulatory uncertainty to unlock inclusive growth and employment”.

The examples above are just two among many where decisions made by people sitting at summits as well as boardrooms and government offices could positively transform, rather than preserve and worsen the structure of unemployment in the country. Until the collective voice of the unemployed is heard in council meetings, national sites of planning and boardrooms across the country, expect more of the same.

The unemployed are organising but we need your help to get their struggles heard. Let employers know about the principles for avoiding discouragement of job seekers. Volunteer to help us get a permanent seat for the unemployed at major sites of planning that affect job creation. With a broad and organised coalition, we can help those with power feel the urgency for real action. MC

Ayal Belling is a founder of the unemployed movement, Organising for Work. He previously worked in finance and tech in London and Cape Town. He can be contacted at [email protected]


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