Government must mobilise private sector and all players to address youth unemployment
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The unemployment rate has continued to climb in 2021 reaching 32.6% in the first quarter – the highest rate on record. Officially there are over 11 million unemployed people, in which the youth bear the worst brunt of the economic stagnation with an unemployment rate of 63.20%.
This is a massive problem that cannot be solved by government alone and requires a social compact that involves communities, labour, and the private sector.
The government does have a responsibility to take a lead, but it needs to mobilise all relevant social partners.
Central to all of this is the need to push for the reorientation of our education system to focus more on improving system outcomes. For a long time, our main focus has been on opening the doors of learning and improving literacy levels.
As a result, many young South Africans are sitting at home with qualifications, but they lack the skills needed by the economy.
Unfortunately, despite some heavy initial investment in education and despite increasing enrolment, our education curricula has not undergone profound structural changes. Too many learners leave universities with degrees that are not relevant for the needs of the labour market and not enough with degrees in science, engineering, medicine.
This can be resolved by ensuring that the private sector is engaged and involved in improving the outcomes of our education system.
The private sector is the biggest beneficiary of our education system but gets involved very late when many students have qualified with skills that are not in demand. If the private sector does not get involved, then this skills dislocation will persist.
Government has been generously handing unconditional tax breaks and employment subsidies like Employment Tax Incentive and Youth Employment Scheme Programme to the private sector, and many have used that money to accelerate automation and mechanisation and, in some situations, to replace older workers.
Communities also have a role to influencing education because contrary to popular belief, there have always existed indigenous forms of education that have been undervalued and sneered at by the policymakers who are greatly influenced by colonial attitudes.
Therefore, education has functioned in isolation from the realities of the African environment and political education. Our education system should be emancipatory, gender balanced and feature African philosophies. There is a need to move away from purely academic focus on education, to promote multi pathways, based on individual talents and interests.
Our education system has pockets of excellence, but these need to be expanded and comprehensive. We still have many young people, in particular from historically disadvantaged communities, falling through the cracks. No modern economy can thrive if some of its young people lack literacy and maths skills.
The 4th Industrial Revolution is here, and our education system needs to be responsive and equip young people with the necessary skills to be competitive.
Without urgent and targeted action today to manage the near-term transition and build a workforce with future-proof skills, we are likely to continue to cope with ever-growing unemployment and inequality.
But we also need to ensure that technological solutions in and of themselves are not imposed with no regard for local economies and cultures, because that approach brings misery to those who are pushed aside by such developments.
The creation of skills alone will not fix unemployment, we need many young people to become job creators and get involved in entrepreneurship. Programmes or interventions to improve labour-force skills can be effective in urban regions or in intermediate regions but have little impact in rural areas where take-up rates are low.
This is where entrepreneurship can come in to fix the unemployment problems. This can take the shape of individual businesses or co-operatives.
One of the key challenges facing small businesses is the lack of funding. Young people are rarely targeted with subsidised credit, and they are not well served by the formal sector financial institutions. By becoming so profit seeking, micro lending institutions have also contributed to the marginalisation of young people, as they resorted to charging high interest rates and demanding collateral security for informal financing.
Government must fix the National Youth Development Agency and ensure that its funds go to young people seeking to set up their own businesses. Banks need to be engaged to provide affordable and accessible credit to young people wanting to set up their own businesses. There is also a need for the development of a state bank and not-for-profit financial institutions which can reduce lending costs to young people.
Some of the government programmes like the Presidential Employment Programme and internship programmes, which have managed to give relief to some unemployed young people, need to be expanded, to pay young people a living wage and provided across all layers of the state.
Government must lead the way. It must compulsorily require all the SOEs and agencies nationally, provincially and at local government to submit internship plans; each must have a quota per year, at minimum wage level. The same can be done by labour and private sector.
The current Expanded Public and Community Works Programmes need to be based on the artisanship programmes that used to provide valuable training. The intention should be to equip young people with skills, and also give them support to venture out and start their own operations with the skills they have received, and not simply use these programmes as a source of cheap labour for broke municipalities.
The public procurement system needs to be overhauled so that there is a single open, online system for the entire state. This will make it easier to monitor and ensure that it favours local procurement and prioritises young entrepreneurs. The Department of Trade, Industry and Competition’s 15 Sectoral Master Plans need to be reinforced to get those sectors of the economy moving and require them to prioritise youth employment.
Some interventions to deal with demotivated youth include providing unemployed youth with work-seekers’ grants to cover their transport and other costs involved in the job application and screening process. Job application portals need to be exempted from data costs to allow free access to applicants.
Since young people are the ones greatly affected by unemployment while they represent the majority of the population, it is a travesty that they continue to be under-represented in decision-making. The increase in young people’s participation in all spheres of government must not just be talked about but be implemented by governments, political parties and civil society organisations.
* Sizwe Pamla is national spokesperson for Cosatu.
** The views expressed here are not necessarily those of IOL and Independent Media.