Columns 23.8.2018 08:30 am

Look after the ‘lost generation’ to create jobs, stimulate economy

Picture: Twitter

Picture: Twitter

Many companies had started to do away with those aged 50 and above, of which many might want to use their pension payouts to start businesses.

Although there are many elements to the concept of a prosperous South Africa that we were promised by our liberation fathers, economic prosperity dominates both imagination and reality.

Despite the fact that we experienced visible and resilient economic growth during the Thabo Mbeki administration, the country obviously regressed a great deal since, with unemployment currently standing a fraction above 27%, according to the last StatsSA report. Of course, the liberation movement strategically likes to quote that dreaded 36% to 37% extended unemployment figure.

Right now, we are far from economic prosperity but overwhelmed by fuel and food increases – not to mention the ongoing retrenchments in the private sector and reports of pending layoffs in the public sector. The prosperity of a country is determined by good economic growth strategies, which we have not had since 1994. Gear (growth, employment and redistribution) was one-sided to aid the already prosperous, while both NGP (New Growth Path) and NDP (National Development Plan) became mere cosmetic attempts at pleasing the other side.

But nothing is worse than the poorly conceived idea to focus solely on youth to drive economic development and economic growth. While it is undeniable that the youth are the future, our rulers had neglected the potential that the middle-aged adult has to boost growth.

This youth-must-rise approach leaves out the 36-year-old to 65-year-old adults who might want to branch into business after accumulating skills and experiences that they gained over the years as employees and managers.

Many companies had started to do away with those aged 50 and above (with some firms even starting from 45 upwards) as they are juniorising and retrenching to cut costs. This has created a “lost generation” of people who are regarded as too old to work but too young to get a government grant.

Some of them struggle to make ends meet after leaving employment and many might want to use their pension payouts to start businesses. This is where government ought to come in.

But tough luck if the pension is not enough, as government only supports the youth between the ages of 18 and 35. This means managerial experience is lost and skills wasted as the middle-aged wait for 10 to 12 years for a social grant.

Even when economic opportunities is deliberately skewed to favour the youth, there must be a strategy to cater for the “lost generation” to contribute to economic growth.

Instead of being empowered to contribute to economic growth, the middle-aged are being left idle at home until old age. This approach exposes the lack of vision from those we call leaders.

Our leaders seem to be oblivious to the reality that this puts an unnecessary burden on the state’s social security system and the fiscus. Instead of creating more beneficiaries, government should remove as many as possible from the social security grid.

Wise leaders would work to reduce the dependency on the state. They should empower those cast out by juniorisation and early retirement in both the private and public sectors.

The state should provide funding or subsidies added to an individual’s pension payout to kick-start businesses that will grow to create jobs and contribute to economic growth.

Such businesses could be turned into family inheritances so as to empower the nation from that level.

Also, this way, the pension money would stay in the family and the business would not die when the original owner dies. The children or one child would take over the business and continue to provide jobs sustainably.

If this system is replicated and entrenched as a government policy, unemployment would be fast reduced and the economy would grow faster.

This is what innovation is all about, mark my words.

Eric Naki

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