The Statistics South Africa (Stats SA) Quarterly Labour Force Survey (QLFS) — Quarter 1 of 2021 puts the aggregate rate of unemployed graduates at 9.3%: 40.3% of which represents graduates aged up to 24, 15.5% for those aged between 25 and 34, and 5.4% for those aged between 35 and 64.
Noticeably, the rate decreases in line with an increase in age, thanks largely to desperation leading underemployment’s “employment filtering”. Employment filtering is when employers take highly qualified and skilled employees to perform functions and duties that years prior were performed by lower-skilled and qualified people without changing the functions and duties of office nor remuneration then, over time, the requirements for such jobs become those qualifications and skills.
This is how graduates flood out those with lower education levels from the labour market. This is why it’s becoming increasingly common to find a bank teller, police constable, administrative assistant, furniture salesman or temperature screener with a postgraduate qualification in a scarce skill.
Unfortunately, Stats SA does not track graduate underemployment, even though it’s critical in analysing labour market deficiencies.
More and more graduates are sitting at home, evidenced by the QLFS-Q2 which puts graduate unemployment at 11%, 23.4 percentage points lower than the national official unemployment rate. These are graduates skilled and qualified in, among other disciplines, accounting (finances), economics, laws, public administration, logistics and transport economics (supply chain), business management, ICT, project management, research, operations management, town planning, human resource management, health sciences, social work, sport-cultural sciences, technicians, artisans and many other skills required for effective and efficient functioning of a municipality.
They are sitting at home with their abilities and availability, desperate and depressed in a country of collapsing municipalities.
Whatever experience or add-on skill is required by these graduates in order to adequately close the municipal skills deficit and ensure capacity, the Local Government Sector Education and Training Authority, a product of the Skills Development Act and National Skills Development Plan (NSDP), should be able to cover. This is the other purpose of these progressive pieces of policy the government has established — cover skills shortfall to grow the economy. Local government is critical for economic growth.
The Auditor-General (AG) through the Consolidated General Report on the Local Government Audit Outcomes — MFMA 2019-20 has painted a dire picture of South Africa’s municipalities.
The poorest quality financial statements are led by Limpopo on 86%, Free State on 93% and North West on 100%. Interestingly, North West has a highly ranked university with a flagship accounting qualification, yet those local graduates are either unemployed, underemployed or have to migrate to other provinces for work related to their skills while their province cannot produce elementary, high school financial statements.
The same applies to the Free State with Maluti-A-Phofung Municipality ranked among the worst in the country. Companies such as Clover are threatening divestment from the entire province — a threat to jobs, service providers, municipal revenues that could result in other negative spin-offs.
Poor budgeting practices and ineffective financial management compromise going concerns with the basics not being in place to ensure sound financial and performance management. This has given rise to the very expensive practice of acquiring consultants to the tune of R900-million — that is 18% of the R5-billion operational expenditure because of incompetent finance units within municipalities.
Consultants have become a fixed feature in financial reporting processes, devoid of skills transfer and scope for capacity building of those municipal units. Two per cent of municipalities have even used consultants to bridge their vacancy gaps. Even with their existence, 64% of municipalities could not provide adequate records, a fruitless exercise, and not even a quarter could produce quality performance reports. About 90% of municipalities received audits that were unqualified with findings, qualified with findings, adverse with findings, disclaimed with findings and outstanding (outstanding as in not submitted — not “excellent”!)
Municipalities in a state of non-compliance with legislation leading to material non-compliance stood at 86%, witnessing non-compliance with supply chain management, irregular expenditure of R26-billion and higher, and with councils unable to derive material remedial action. Local government finances, financial reporting, municipal performance and basic compliance are all “going south”, and as a result dragging down with them small suppliers, Eskom, water boards and even SARS, as PAYE, VAT and transfer contributions to pension funds of employees go unpaid.
Consultants have found a lucrative market due to 68% of municipalities lacking skills and 30% lacking skills and having vacancies unfilled. This clearly advocates for unemployed and underemployed graduates being absorbed permanently (full employment), and not just on dead-end internships. These graduates will assist in ensuring compliance with strategic planning documents and objectives; these graduates will assist mayors, councils, National Treasury, banks and lenders as they interact with these municipalities. The money used on consultants and other leakages is enough budget for this programme, with major savings.
In the upcoming election, unemployed and underemployed graduates must ensure that manifestoes, door-to-door campaigns, posters and entire electioneering strategies of parties and independents have a position on resolving their plight.
Ward councillors and proportional representatives will form councils (legislators) and mayoral committees (executives) and, as such, drive the bylaws, integrated development plans and structures of the administrations.
All these functions and positions must develop means to absorb graduates. This will not just save the municipality much-needed money in the long run, but also ensure proper functioning of the municipalities for all residents, ratepayers, businesses and creditors due to effective service delivery.
Graduates and current students must not miss the opportunity to exercise their urgency, but their vote must be cast with conditions. DM