South Africa is faced with a crisis of high and rising youth unemployment rate. Throughout the country, only 1 in 3 young people of working age is employed.
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This distressing statistic not only plays out through the limited earnings potential and prospects of these youth but also emerges within stymied business growth and unsustainable pressure on governmental social programs.
But what makes youth unemployment high in South Africa? And which province has the highest youth unemployment rate? Most importantly, what can we do to counteract this?
Keep reading to shed light on the nation’s most pressing problems.
What is the current youth unemployment rate in South Africa?
According to StatsSA, the official unemployment rate was 32,6% in the first quarter of 2021.
The results of the Quarterly Labour Force Survey (QLFS) for the first quarter of 2021 show that the number of employed persons remained almost unchanged at 15 million in the first quarter of 2021.
Also, the number of unemployed persons remained almost unchanged at 7.2 million compared to the fourth quarter of 2020, which is higher by 8,000 people.
On the other hand, the number of discouraged work-seekers increased by 6.9% to 201,000.
However, the number of people who were not economically active for reasons other than discouragement decreased by 38,000 between the two quarters.
As results, there is a net increase of 164,000 in the not economically active population.
These minor changes resulted in the official unemployment rate increasing by 0.1 of a percentage point from 32.5% in the fourth quarter of 2021. In fact, this is the highest since the start of the QLFS in 2008.
According to the expanded definition of unemployment, the unemployment rate increased by 0.6 of a percentage point to 43.2% in the first quarter of 2021 compared to the fourth quarter of 2020.
Hence, the official unemployment rate among youth aged between 18 to 32 years old was 46.3% in Quarter 1 2021. Among university graduates, the rate was 9.3%.
Some industries lost jobs between Quarter 4 2020, resulting in a net decline of 28,000 in total employment. Meanwhile, job losses were mainly observed in construction, trade, private households, transport, and agriculture.
Why is youth unemployment so high in South Africa?
Unemployment is a major issue for South Africa’s youth. However, this is also a global phenomenon given the sluggish world economy.
International youth unemployment in certain Eurozone countries is also extremely high, particularly in Greece and Spain.
At 36.1% South Africa’s unemployment rate amongst the youth is significantly higher compared to that of those aged 35 to 64 years old.
Unemployment is especially high amongst those aged 15-24 years old, amounting to 53.2% being out of a job.
As reported by the GCIS, several causes boosted the youth unemployment rate in South Africa, some of which are:
- Legacy of apartheid and poor education and training;
- Labour demand-supply mismatch;
- The effects of the 2008/2009 global recession;
- Role of trade union federations in government; and
- Slow economic growth.
Which age group of people is currently the most unemployed in South Africa?
Unfortunately, unemployment was mostly concentrated among youth, those aged between 15 and 24 years old with a rate of 63.2%, and with those aged between 25 and 24, with a rate of 41.2%
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The high youth unemployment rate is so bad for the country’s economic growth and development.
If left unchecked, youth unemployment can have serious social repercussions because unemployed youth tend to feel left out, leading to social exclusion, anxiety and a lack of hope for the future.
Experiencing unemployment in youth can also reduce a person’s lifelong earning/career potential.
Furthermore, it creates inequalities, particularly between communities.
The financial costs of supporting unemployment, including welfare and medical support, can reach billions.
How does corruption affect unemployment in South Africa?
The impact of corruption is felt way beyond the fiscus.
This act of criminality set undesirable precedents. It steals the aspirations of young people who want to venture into business, entrepreneurship or thought leadership, as corrupt people enriching their lives through flawed tender processes and other irregularities.
The World Bank reports that South Africa still lacks clear data about the extent and nature of corruption charges, as cases of corruption are usually hidden within the category of commercial crimes.
It says an increase in cases pursued by the police could reduce the perception that perpetrators of corruption act with impunity.
South Africa faces challenges ranging from poverty, inequality, poor access to adequate education and few entrepreneurship opportunities. It is mind-boggling to have to deal with irregularities and improper awarding of tenders for self-enrichment in this context.
Which province has the highest unemployment rate in South Africa?
The Eastern Cape had the highest unemployment rate (37.4%) in the country. The youth unemployment rate had a record high of 50.8%. The unemployment rate in this province remains the highest in the country.
Meanwhile, Limpopo province had the lowest unemployment rate in the country.
While the Eastern Cape economy dwindled considerably during the first quarter of 2019, the youth unemployment rate crossed the 50% boundary.
Moreover, it rapidly escalated by 8.7 percentage points between the first quarter of 2017 and the first quarter of 2019.
The adult unemployment rate is less than half that of youth.
What is the major type of unemployment in South Africa?
Structural unemployment is clearly the most major and serious form of unemployment in South Africa. Consequently, poverty arises from this form of unemployment.
Structural unemployment is caused by changes in the composition of labour supply and demand. Structural unemployment is part of the nation’s natural rate of unemployment.
However, cyclical unemployment can also lead to severe hardship, especially during economic downturns of long duration.
Furthermore, cyclical unemployment can lead to structural unemployment.
Cyclical unemployment is a type of unemployment that is related to cyclical trends in the industry or the business cycle.
Workers who have generally been able to find employment during economic upturns may, at some point, no longer be able to find jobs and become permanently unemployed.
Still, in South Africa, structural unemployment is becoming an ever-increasing problem.
How can we reduce youth unemployment in South Africa?
Throughout their lives, youth within South Africa are put at an employment disadvantage due to inadequate education and recruiting systems.
Despite an estimated 500,000 entry-level vacancies throughout the country, young people often lack the necessary problem-solving skills, business acumen, technological savvy, and communication skills needed for the workplace.
Unfortunately, structures that would enable this on-the-job learning (training, mentoring, and coaching) are not standard practice for most workplaces.
Hence, to place more youth in jobs, sectors can bring their unique skills to bear while complementing one another’s efforts.
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Government incentives can encourage employers to take calculated risks and reform HR practices.
Furthermore, training providers can focus more on skills, including job-readiness skills, that are directly demanded by employers and work with these employers for placement.
Also, funders can strategically deploy grants to such programmes and collaboratives.
Youth who participate in demand-driven training programmes and are then hired into jobs become valuable staff in short order: the youth were more motivated to perform well and assimilated quickly to the work environment.
Ultimately, by expanding and replicating such partnerships to entrench and extend early impact, South Africa could show the way again in stamping out youth unemployment.