Youth joblessness to persist due to stagnant economy, wrong skills

The youth unemployment rate could remain the same as there is limited growth in the economy and young people are acquiring skills not in demand, economists say.

Earlier this month in his State of the Nation address, President Cyril Ramaphosa noted the country was plagued by a youth unemployment crisis. More than half of all young people in the country were unemployed, he said.

“Of the 1.2 million young people who enter the labour market each year, approximately two-thirds remain outside of employment, education or training.

“The solution to this crisis must be two-pronged – we must all create opportunities for youth employment and self-employment,” Ramaphosa said.

A Presidential Youth Employment Intervention programme would be implemented, with its six priority actions being rolled out over the next five years.

This included providing shorter courses in specific skills that employers in fast-growing sectors need, supporting young entrepreneurs and allocating 1% of the budget to deal with high unemployment.

But youth unemployment might remain unchanged since the economy is growing at a snail’s pace. While Finance Minister Tito Mboweni might set aside billions of rands to try and curb the problem, the state cannot stimulate the economy by spending more money, economist Dawie Roodt said.

“The real jobs only happen when the economy goes up. It doesn’t matter what he [Mboweni] says. The solution is to grow the economy.

“The things he will say won’t [produce] economic growth. We have reached the end. The state cannot stimulate the economy by spending more money.”

While SA had a lot of unemployed graduates, there were a lot more unemployed matriculants, whose chances of employment were much lower, he said.

“These interventions [mentioned by the president] might help. The question is, is it sustainable? The answer is no. The moment they stop with those interventions, people lose their jobs. That is not real job creation. Real jobs creation is employing people because they are needed.”

Government should consider revamping the entire education system to cater for industry needs, economist Professor Bonke Dumisa said.

He said the youth were learning skills not really in demand.

Another challenge was that the population continued to increase while the economy was stagnant.

“We have GDP growth of less than 1% and population growth rate of over 3%. We create new jobs and then find we need five times that.”

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