Youth unemployment – Too much empty talk with little action

We have to stop talking about youth unemployment and start doing something about it.

This week’s unemployment statistics again showed how dire the situation for South African youth is, with 33.6% of the 10.2 million young people between the ages of 15 and 24 disengaged from the labour market.

Unemployment is even worse in the group between the ages of 15 and 34, reaching 45.5%.

These unemployed are also not building on their skills base through education and training, and according to Statistics SA, as many as 50.4% of the 7.8 million unemployed people in the fourth quarter of 2022 did not have matric, while 39.5% completed matric.

Almost 7% of the unemployed had other tertiary qualifications, while only 2.7% of unemployed were graduates.

Independent economist, prof. Bonke Dumisa, says in South Africa we have structural unemployment which results in significant jobs mismatches.

“Most of our youth do ‘soft qualifications’ and our school education system does not produce people with the training which is readily relevant to the economic needs of the country.”

Dumisa says we will not stop these very high youth unemployment rates until we completely overhaul our school systems and until our universities consciously make their degree outcomes more correlated to the economic needs of South Africa.

ALSO READ: High youth unemployment highlights gravity of SA unemployment

Research on the reasons for youth unemployment

Researchers Ariane De Lannoy, Lauren Graham, Leila Patel and Murray Leibbrandt wrote in an article, Why is youth unemployment so intractable in South Africa? A synthesis of evidence at the micro-level that was published in the Journal of Applied Youth Studies, that the 1996 National Census already put the rate at 53.2%.

However, the youth unemployment rate decreased from 2004 to 2008 during the country’s economic recovery, only to reverse course due to the global economic downturn of 2009.

The researchers say these levels changed very little despite the country’s economic recovery since 2009 and became even worse for the 19 to 29 age group.

Some of the probable causes were the low absorption of youth into existing jobs, increased participation of youth in the labour market, low job growth, an overall increase in the youth population and young people leaving school early, as well as lack of access to postsecondary education and training.

The researchers analysed existing literature on youth unemployment in South Africa and the results, published in Science Matters included:

Education and skills

Although young people have a higher level of education than their parents, they do not have better prospects for employment. Employers also emphasise higher education in the form of diplomas and degrees.

Another problem is that about half of the group of children entering school in Grade 1 leave school before matric and they therefore have limited job prospects. In addition, the education system fails to adequately teach children even basic skills that employers require, such as literacy and numeracy.

ALSO READ: Why talent matters more than ever in the digital age

Aspirations and opportunity

Many young people strive to have a degree and therefore many value a university education more than a Technical and Vocational Education and Training (TVET) college qualification, which they see as inferior due to poor quality teaching and learning at some institutions.

Limited access to post-secondary education and training of any kind also makes it more difficult for young people to get qualifications, while those with post-secondary qualifications do far better in the labour market.

Lack of information

Schools offer little career guidance, which means that young people do not have enough information on matching skills and interests to their chosen school subjects.

They also do not have information on how to apply for a job, compile a CV or access further education opportunities.

Discouragement and mental health

Young people are discouraged and discouragement rates rising, while mental illnesses, such as depression, can follow when young people think they have failed and are discouraged, which can lead to further disconnection from the labour market.

Geography and costs of work-seeking

Research has also showed that apartheid-era spatial planning resulted in the country’s black population paying high transport costs from townships and rural areas. It costs money to look for a job and these young people are often from food-insecure households where the per capita monthly income is very low.

ALSO READ: What the new annual earnings threshold means for employees

Lack of work experience

Young people often wait longer in the labour market queue, especially for their first jobs and lack of experience is a major reason for youth unemployment. Therefore, part-time employment while young people are at school or studying has a positive effect on their employment prospects.

Limited social capital

Young people’s social networks help them to gather information on education, the labour market, job availability and job access, while informal networks of friends and family provide job opportunities access, but then factors such as work experience again come into play.

However, the researchers say, many young people lack these social networks, with large proportions of them living in households where nobody is employed.

Gender and care

According to research, young women are disproportionately affected by unemployment compared to men in South Africa due to, among others, labour market discrimination and the gendered nature of care expectations.

ALSO READ: Expert tips for job hunters from HR professionals

Employers’ hiring preferences and behaviour

The review also shows large gaps in understanding of employer behaviour. Although it is assumed that employers do not want to hire young people due to training costs, there is little empirical evidence to support this assumption.

However, they researchers point out, during economic downturns, employers shed jobs while not necessarily rehiring during economic upturns, indicating high risk-aversion amongst employers.

Racial discrimination can also affect hiring decisions although education level – where black candidates tend to come from lower quintile schools and attend historically black universities, sometimes perceived by employers to be “inferior” – is often a major factor.

It has also been found that employers inflate labour market entry requirements to exclude large numbers of potential employees whose skills or education otherwise match the job.

What can we do about youth unemployment?

In their recommendations after completing the analysis, the researchers said multiple dynamics interact to shape young people’s access to the labour market. Therefore, even if there is increased demand for young workers and a better-quality education system at the macro-level, many of these microlevel barriers are likely to continue to play a role and it requires policy and programmes to tackle the problem.

This means that there is no single intervention, but a range of coordinated and integrated interventions are rather necessary to tackle the skills, social capital and information gaps that young people face.

ALSO READ: Matric not go the way you planned? There is hope beyond that certificate

What government is doing

President Cyril Ramaphosa launched the YES (Youth Employment Service) Initiative, which involves the collaboration of the public and private sectors as well as civil society in direct response to the country’s ongoing youth unemployment crisis.

Involvement in the YES Initiative has been incentivised as an opportunity for business to ‘level up’ their BEE scorecards and in the next phase of development the major drawcard for South Africa’s corporate sector needs to be positioned beyond the BEE mandate and focus on building more sustainable industries that enable South Africa to take its place as a global economic contender, Cassim Coovadia, a non-executive director of YES, said at a Think Big webinar hosted by PSG last year.

In 2018, the Initiative announced its ambitious goal of creating one million new jobs and job opportunities over a three-year period. Four years later, with youth unemployment a record high of just over 66%, due to multiple headwinds such as Covid-19 and widespread political unrest, YES is far from realising its target, he said.

However, he promised prospects on the horizon for the corporates and business leaders at the forefront of the project. Empowered by valuable data collected over a 4-year period and driven by a more pragmatic vision of how to uplift the country’s youth, Coovadia said it is “full steam ahead” for YES into South Africa’s post-pandemic future.

He said YES has been successful at creating 80 000 work experiences and has seen a R4 billion cash injection into the South African economy, powered by an enthusiastic and driven cohort of young people. “These developments are a precursor of what is to come, which for the directors of YES, is a record year of job creation.”

Over 25 000 job opportunities were created in 2022 alone and the fact that the number of jobs created post-pandemic exceeded pre-Covid levels, the YES team project saw a dramatic increase in job placements across several sectors, Coovadia said.