Youth day and a ballooning youth unemployment

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In a week’s time we will mark 45 years since the June 1976 Soweto protests that would prove to be one of the most important dates in our struggle against apartheid. Today, we are still struggling with transformation in our journey towards a more equitable and just country. In that pursuit, we need to pay much greater attention to the plight of the youth. Their struggles paint an alarming picture.

The official unemployment rate in the 15-34 age bracket sits at 46,3%, according to Statistics SA’s latest quarterly labour survey. In the 2020 report from the International Labour Organisation (ILO), the global youth unemployment rate stands at 13.6%. There’s a little difference, however, in the definitions of youth – the ILO defines it as between the ages of 15 and 24. When I rummaged through that age range in the numbers from Stats SA, the UN youth definition makes up about 18,4% of the record 7.2-million plus South Africans that are unemployed.

Whichever way one plays with the statistics, we have a youth unemployment crisis that is ballooning out of control. This economy clearly isn’t creating jobs for this important segment of our population.

That highlights another area we need to focus on: Hilary Joffe points out in Business Times that that the decline in employment in the formal sector in 2020 was just 6%, with the SME and informal sectors bearing the brunt of the 1.4-million jobs lost.

For context, this is a crisis that the global economy also faces in an age of digitisation. Over the next decade, the World Bank estimates one billion young people will try to enter the job market, but less than half will find formal jobs.

The Youth Employment Scheme, a business-led collaboration, where businesses that hire unemployed youths for at least 12 months, is a small but important step in addressing this problem, with more than 54,700 work experiences created through the programme since its launch in 2019.

Now unemployment in itself a problem, but if we consider the effects of Covid-19, you quickly understand the gravity of the situation facing us.

We are sitting with an expanded unemployment rate of 43.2%, a statistic that includes people available to work but who aren’t trying to find jobs because they are discouraged. We need to put our heads together.

Last October, alongside other social partners, business did just that by agreeing on President Cyril Ramaphosa’s economic reconstruction and recovery plan.

Job creation was at the core of the objectives in the wake of the pandemic, and it would be driven by aggressive infrastructure investment and mass employment programmes. Commitment was made to reindustrialising the economy with a focus on growing small businesses and accelerating the long-promised economic reforms to unlock investment and growth.

The interventions included achieving a sufficient, secure and reliable energy supply within two years, creating and supporting more than 800,000 work opportunities in the immediate term and unlocking more than R1-trillion in infrastructure investment over the next four years. It also planned for reduced data costs and expansion of broadband access, among other priorities.

Implementation of the plans, according to National Treasury modelling, was expected to raise economic growth from a baseline of 1.3% without the plan to average 3% a year over the next 10 years.

Nine months later, we can indeed point to some positive moves in meeting some of the objectives.

In the energy sector, policy decisions have been made to bring in renewable energy to deal with Eskom’s growth-debilitating load-shedding.

Earlier this year, Minister of Minerals, Resources and Energy Gwede Mantashe announced eight preferred bidders for the emergency supply of 2,000 megawatts of power as part of the Risk Mitigation Independent Power Producer Programme. A move welcomed at the time, but unfortunately one that has now been mired in tales of alleged corruption. And in March the request for proposals (RFPs) for bid window five was issued, which will procure a further 2,600MW of renewable energy from independent power producers. In addition, it was announced that the government intends to release four more RFPs within the next 12 months.

With regards to boosting digital access, the central ingredient of holding a spectrum auction has been delayed for more than a decade and we face further delay because the auction process established by the Independent Communications Authority of SA finds itself before our courts.

On the infrastructure front, in spite of President Ramaphosa’s commitments, there has been nothing substantial taking place on the economic or social development side to boost spending from the public and private sectors.

The scale of the infrastructure challenge is enormous. We should be investing an average of R4.1bn a day in infrastructure, a big jump from the R1.6bn we are currently managing, if the country is to meet the National Development Plan target of spending 30% of GDP on infrastructure investment. Our infrastructure spending levels are below comparable emerging market nations and well below the global average of 18.2%.

In reviewing the past nine months it is clear that while there has been some positive movement, we need to increase the momentum urgently. The better-than-expected economic growth numbers from the first quarter should not lull us into any sense of complacency. Rather, we need to focus on the ballooning unemployment crisis.

While there’s no doubting the sixth administration’s commitment to economic reforms, they remain a slow and politically loaded process. Labour reform, essential to job creation and in particular the youth sector, remains a topic far off the table. We owe it to the youth of ‘76 to ensure it receives urgent attention.

I urge everyone to go through Stats SA’s latest quarterly labour survey to open our eyes to this crisis.

This column was written by Busi Mavuso and was first published in Business Day. 

Access more unemployment posts here. 

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