The Congress of South African Trade Unions (COSATU) led a march to Parliament on Wednesday morning, ahead of the medium-term budget policy statement (MTBPS). Picture: Leon Lestrade / Independent Newspapers
By Karabo Seane
South Africa is on a cusp of disaster. The country’s unemployment crisis, particularly among its youth, has reached alarming proportions. With a staggering 45.5% of individuals aged 15-34 years out of work and the national average being 32.9% in the first quarter of 2024 reported by Stats SA. This is a clear sign that the situation is at a tipping point and that bold actions are needed.
In his fascinating book ‘21 Lessons for the 21st Century’ (2018) historian Yuval Noah Harari notes: "The most important thing is to realise that jobs are not just about providing income, but also about providing meaning and purpose." In essence, Harari emphasises the importance of dignified work in fostering a sense of purpose and fulfilment. It is therefore important to address the social and psychological impacts of unemployment.
World Bank's Jacques Morisset argues in an article (2023) on the US based Brookings Institution that "South Africa needs to make work more attractive, both for employers and employees".
Morisset adds that boosting employment could be achieved by changing the relative returns to a worker between being active or inactive in the labour market. Interestingly, he suggests three policy changes: the first being initiated by the Minister of Finance in lowering the entry tax rate of the personal income tax from 18% to say 5%, or increasing the threshold at which a citizen starts to pay the personal income tax.
His second policy change suggestion gives authorities the power to modify existing social transfers to encourage poor workers to enter the labour market. The last policy change suggests the facilitation of additional job opportunities closer to the home of low-income workers, which automatically reduce transport costs. These suggestions are in line with South Africa's National Development Plan (NDP), which aims to create a more inclusive economy by promoting economic growth, reducing inequality and investing in human development.
KZN’s Professor Labby Ramrathan's words underscore the critical role education plays in empowering young people when he says: "Education is the key to unlocking the potential of our youth", however, limited educational attainment, social and economic disadvantages are significant factors driving elevated unemployment rates. As a matter of urgency, the government and private sector must plough investments into STEM education, promoting vocational training and apprenticeships to encourage entrepreneurship and innovation.
One of the ways in which the government can address unleashing Entrepreneurship and Small Business Growth is to simplify company registration processes on CIPC and improve access to finance. They can also use targeted support programmes to facilitate the growth of small businesses and entrepreneurship amongst the youth and unemployed people.
In his acknowledgement of the role SMMEs play in the economy, President Cyril Ramaphosa emphasised in the 2020 state of the Nation Address that “small businesses are the backbone of our economy, and we must support them to drive growth and job creation”. By empowering entrepreneurs, South Africa can unlock innovation, create jobs and stimulate local economies.
The current Government (of National Unity) with all its political rumblings has brought hope to many South Africans but that is not enough, GNU must put the unemployment crisis as a permanent agenda of their administration until the end of the office term.
Initiatives such as the Youth Employment Service, National Youth Development Agency and Small Enterprise Development Agency must remove all bureaucratic barriers to entrance, ensure survival to those already participating in the sector and provide vital and genuine support for all job seekers. Targeted programs addressing the specific needs of youth and women are also vital in bridging the employment gap and must be revitalised.
Author Guy Standing correctly observes in his book ‘The Precariat: The New Dangerous Class’ (2011) that: "The precariat suffers from economic insecurity, social insecurity, and emotional insecurity." Addressing these insecurities requires government to implement comprehensive policies that promote stability, social protection and human development.
The legacy of apartheid policies that brought huge disparities between urban and rural areas must be erased and new policies aimed at promoting regional development and addressing infrastructure deficiencies must be implemented correctly and explored to help bridge the gap.
South Africa cannot afford to play catch-up when it comes to technology and embracing technological advancements can create new job opportunities. With this in mind, we must always remember what Harari cautioned us about: "The automation of work will accelerate, and more people will be pushed out of the labour market." GNU must urgently implement proactive measures addressing the consequences of technological change. There’s no other time except now.
As we navigate youth employment crisis and unemployment in general, it is essential to consider all changes related to the future of work. Emerging industries such as renewable energy, technology, and healthcare hold tremendous potential for job creation. To capitalise on these opportunities, education and training institutions must work together with labour providers to understand workforce needs to adapt relevant programmes.
If this is done correctly, South Africans will be prepared for emerging industries and the impact of automation could be mitigated while taking advantage of creating sustainable employment opportunities.
Existing systemic barriers still linger even today and hinder many South Africans from accessing employment opportunities. These include limited inadequate transportation, connectivity, social and economic inequalities.
To overcome these barriers, policymakers must implement targeted interventions. The first start is the improvement of access to education and vocational training and investment in infrastructure development.
Author of the ‘Capital in the Twenty-First Century’ French economist Thomas Piketty's earlier observation about inequality is pertinent in this case, the government must remove all systemic barriers to reduce inequality and promote social mobility for all.
In 2020, the International Labour Organization (ILO) released a report indicating that the global youth unemployment rate was expected to remain above 17% in 2022, as a country, this is the threshold we should’ve have benchmarked ourselves against but failed, the result of which is the continuing unemployment we are witnessing today.
As South Africa finds itself standing at the abyss, staring into a void of lost opportunities and diminished hope, by all means necessary we must avoid this crisis to spiral out of control. We must heed the warning of Former President Thabo Mbeki when he said: “South Africa will experience its own ‘Arab Spring’ if the unemployment, poverty, and crime are not addressed urgently.” The march in September by the ANC Youth League is another reminder of the growing discontentment with the escalating unemployment crisis.
Piketty is correct when he argues that: "The main issue is not the size of the inequality, it's the persistence of inequality."
South Africa must arrest itself from the persisting inequality by finding comprehensive solutions that foster collaboration among all role players. In that way, we can slowly monitor progress as we create employment and a brighter future for all.
* Karabo Seane is a tech entrepreneur, communication strategist and consultant. He holds a Bachelor of Arts in Communication from the North West University and an MBA from the Management College of Southern Africa – Mancosa. He is also a fellow of the NFP – Netherlands Fellowship Programme in 2015.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.