Statistician-General Risenga Maluleke released the first Quarterly Labour Force Survey figures for 2023 a few weeks ago. Unsurprisingly, the figures painted a grim picture in terms of unemployment in South Africa, particularly among the youth. The official figures indicate that youth unemployment for the first quarter stood at 46.5% with the narrow definition.
A deep dive into the figures indicates a disaster waiting to happen – young people between the ages of 15 and 24 and those between 25 and 34 had unemployment figures of 62.1% and 40.7%, respectively. These figures are further exacerbated by the fact that 3.7 million young people from the more than 10.2 million youth between the ages of 15 and 24 are classified in the NEET category: neither employed nor in any form of education or training.
Moreover, worrying patterns are emerging regarding the structure of the economy on job availability on the basis of skills. In the first quarter of the 2013 Quarterly Labour Force Survey, graduates represented only 5.5% of the unemployment number, in contrast to the current 10.6% of graduates without employment. Moreover, young people with only a matric certificate represented 35.6%, and those with less than a matric certificate represented 37.6% of the unemployment figures.
The numbers are indicative of deep structural and systemic challenges that are directly affecting young people. The economy in total added about 258,000 jobs in the first quarter. However, more than 220,000 graduates enter the labour market every year. And a report from Umalusi, the council for ensuring good standards in general and further education, stated that on average a learner exiting the basic education system will need a further two years of training to be commercially competitive.
This prompts the question: At what point will a National State of Disaster be declared to mitigate and effectively deal with chronically high unemployment? The reality is that several interventions are needed.
Firstly, greater funding is needed to enable workplace-integrated learning for students and graduates to gain valuable skills that will improve their employability in the current market. Over the years, South Africa has been increasing its demand for skilled labour to meet the needs of the broadening services industries and emerging digitals from formerly traditional sectors like mining.
Secondly, we ought to rethink our current models of addressing unemployment through mainly short-term subsidised internship culture in both private and public sectors that hardly benefit young people. These models have been further supported by numerous measures that attempt to address the supply side of labour, through interventions such as youth incentive programmes, vocational training and upskilling of digital skills to some extent in order for young people to fill the existing vacancies.
The caveat though, is as pertinent as the interventions above are, they are limited insofar as the South African economy is concerned. Over the past 15 years or so, the economy has been in a steady process of deindustrialisation. More than a million jobs have been lost since the 1990s in labour-intensive sectors such as manufacturing and mining, and thousands more in sectors such as construction. This is evident when looking at our gross fixed capital formation numbers and the fact that, as a percentage of GDP, manufacturing has seen its contribution to GDP decline from 22% in the early 1990s to just about 12% currently.
Therefore, we ought to improve the demand element of skills while ensuring that we are enacting policies that will catalyse sectors that are labour intensive and have low skills barriers to address the stubbornly high structural unemployment. The outcome of this process will stimulate labour demand, which subsequently improves household incomes to ensure the demand for goods and services.
Thirdly, there is a fundamental need for a countercyclical fiscal policy framework, given that our economy is not growing and has not been growing in real terms for north of a decade. This is seen in how unemployment characterises itself worst in peri-urban and rural areas, and has a gendered lens where women are worst affected. Such policy direction would enable the state to facilitate more social investment, especially at community levels, where there is a great need for public infrastructure that can absorb the latent skills of unemployed youth.
A declaration of a National State of Disaster for youth unemployment has become necessary. The material conditions of young people are fast deteriorating, leaving many not only feeling helpless and hopeless but susceptible to illegal means of providing for themselves. On this Youth Day, we need to act with a greater sense of urgency in addressing youth unemployment, and turn the demographic potential into a dividend and not a catastrophe. DM