What South Africa can do about youth unemployment in the short run

10 February 2017 | Story Lauren Graham and Ariane De Lannoy

South Africa’s youth unemployment rates are now considered to be chronic. The latest figures show that about 48% of South Africans between 15 and 34 were unemployed in the third quarter of 2016. The situation has worsened over the past eight years despite a great deal of policy attention and the implementation of a range of public and private interventions.

If not addressed as a matter of urgency, the situation is expected to increase levels of frustration and impatience among the youth. In addition to this, the situation will contribute to a cycle of chronic unemployment and poverty: these young people are likely to become the parents of children who will then also grow up in a context of poverty.

Our paper provides an overview and assessment of the problem and discusses some of the structural features that drive youth unemployment in South Africa. We argue that focusing solely on the structural, long-term issues may prevent the country from considering important aspects that could be addressed more speedily, including local level barriers that constrain young people’s entry into the labour market.

Disturbing trends

Apart from the very high jobless rate, the other particularly disturbing trend is that more and more young people have given up looking for work. Between 2008 and 2015, the number of youth who have become discouraged has increased by 8%.

When focusing on 15 to 24 year olds – those who would ideally be finding their first jobs or continuing their studies – just under a third are “not in employment, education or training” (NEET). This group is arguably the most vulnerable to chronic unemployment, poverty and social exclusion, as they are neither improving their skills through education nor gaining the work experience needed to progress in the labour market.

Racial and gender inequalities continue to play a significant part in the youth unemployment landscape in South Africa. African and coloured youth are far more vulnerable to unemployment than their white or Indian counterparts; young women are more likely to be unemployed and to be NEET than their male counterparts. (Apartheid era racial classifications, under which all South Africans were designated African, coloured, Asian and white descriptors, are still used for official purposes in the country.)

A multifaceted challenge

Why is youth unemployment in South Africa such a seemingly intractable problem? The evidence suggests that it’s a multifaceted issue.

The biggest factors are the evolving nature of the labour market and mismatches between the skills needed in the labour market and those provided through the educational system. Research indicates that a key difficulty facing young work seekers, in particular, is the fact that South Africa’s labour market favours highly skilled employees.

The high demand for skilled labour means that those with a post-secondary qualification are far more likely to find employment than those with only a matric certificate.

In addition, South African employers, in their apparent distrust of the quality of education received by young people, have raised the bar for entry into low level jobs ever higher. But by escalating the educational requirements for entry-level jobs, employers are effectively shutting out a large pool of potentially good young employees.

The uneven quality of South Africa’s public schooling system further entrenches inequality in finding employment. Many of the poorer children at schools that are often under-resourced and ill-managed very quickly fall behind in their learning, later on drop out of school and then become part of the excluded groups.

Geographic location also acts as a barrier to employment. Young people living outside the major metropolitan areas have to spend more time and money on looking for work. Other barriers include limited social capital and limited access to information.

A recent national study of participants in a youth employability programme reported that the average transport and other work seeking costs for young people were around R560 per month. This stands against the average per capita household income for the same group of youth of R527 per month.

Poverty at the household and community level further complicates the situation. More than half of young people aged 15-24 live in households with a per capita monthly income of less than R779 (the “upper bound poverty line” as defined by Statistics South Africa). Many lack access to information as they are unable to afford the high costs of data so can’t use mobile phones or Internet cafés to search for job opportunities or for post-secondary education opportunities.

And, unlike their middle-class peers, poorer young people lack “productive social capital” – social networks that can be used for information about and access to the labour market. These are important for navigating entry into the labour market.

Short term interventions

It’s clear that the challenge of youth unemployment is a structural issue requiring massive policy investments, political will and time. But it’s equally important to concentrate on what can be done in the interim.

Ways must be found to shift the labour market to be more youth friendly. One option is “impact sourcing”. This involves employers being encouraged to review their recruitment criteria to reach candidates who might not normally be seen as employable. An example is the Harambee Youth Employment Accelerator (www.harambee.co.za) which involves working with employers across sectors to promote inclusive hiring practices that focus on young people.

Another solution could be a national transport subsidy for job seekers. A pilot study is being run by the Abdul Latif Jameel Poverty Action Lab. This is a simple solution with a potentially high impact.

Local-level youth employability programmes, often run through non-governmental organisations, are another possible intervention. They can help young people access information about jobs and support them to be more effective in looking and applying for jobs. But many operate on a small scale and are expensive to run. Evaluating their impact and finding ways to take the most efficient ones to scale could make a difference.

South Africa faces the risk of seeing the challenge as being insurmountable and doing nothing in the short term. The evidence suggests that, while there are major structural challenges, there are also some promising options to pursue.

A longer version of this article was first published on the ECON 3X3 website.

Story by Lauren Graham, Senior Researcher at the Centre for Social Development for Africa, University of Johannesburg and Ariane De Lannoy, Senior Researcher: Poverty and Inequality Initiative, Southern Africa Labour and Development Research Unit, University of Cape Town. Photo by Kyle TaylorCC BY 2.0.
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