Alleviating Youth Unemployment

Topics: Employment, Wage, Minimum wage Pages: 5 (1975 words) Published: September 23, 2013
Alleviating Youth Unemployment
The current state of unemployment in South Africa is one of major concern, with the main focus of this concern being on the alarmingly low level of youth employment. Of the already worrying 25% unemployment that exists in the country, 70% is attributable to individuals aged 15 to 35. The extent of the problem can be further illustrated by the fact that there are currently approximately 2.8 million South Africans aged between 18 and 24 who are unemployed and not enrolled in any learning institution (Goko 2013, para. 7). These figures prove that alleviating the problem of youth unemployment will go a long way to improving the employment level in South Africa. In approaching this task, the main causes of the problem need to be clearly identified by policy makers before any solutions can be found. Thereafter, a solution must be systematically and effectively laid out and implemented. The Causes of Youth Unemployment

There are several factors that contribute to young people being left jobless in South Africa. The largest perceived cause by many, including myself, is the education system and its shortfalls. For example, the large amount of young South Africans who have not completed the Further Education Training phase of the learning process is immediate proof that the system wants for improvement. More indication is the current survival rate of students in schools being below the 50% mark, again suggesting that South African students are not being educated in a sufficient way. This could be due to poor structural organisation and efficiency as well as inadequate educators. What is important is that these individuals end up being forced into informal employment or relying on social grants to survive because they are unable to find employment. This happens because they lack the skills needed to obtain employment in the formal sector or keep it. Secondly, the education problem contributes largely to the mismatch between the skills required in the labour market and the skills that individuals are provided with through the education process. This fact once again points to the probability that the education system currently in place is not sufficient in preparing young people for the demands of the labour market and the realities of employment. Another cause of the issue of youth unemployment is a level of job creation which is far from able to cope with the amount of people entering into the labour market each year. Approximately 1.1 million young people enter into the labour market every year, with only around 200000 new jobs and 100000 retirements to accommodate this inflow of young workers. Coupling this fact with the 1.27% population growth rate of the 15-34 year old age group, this being the fastest of all groups, indicates that this problem is going to continue to compound. The poor job creation stems not only from weak real growth rates and low investment rates, but also from the fact that the cost of labour is too high for businesses to be prepared to hire more workers. There is currently a mismatch between the growth rates in real wages and the productivity of labour in the labour market, creating the problem of firms not getting the skills and competency they require from the amount they are expected to pay for labour. The link between these two variables seems rather weak in South Africa in comparison to other countries indicating that the real wage rate growth is being driven more by other determining factors than productivity. Such factors could include the barriers of entry into the labour market and to a larger extent, the collective bargaining framework. In other words, wages are too high mostly due to the role and power of Trade Unions in forcing wage rates higher than the market would naturally do. The empirical evidence shows that real wages in South Africa are growing at a significantly faster rate than productivity, which discourages businesses to hire more workers and even...

References: Goko, C 2013, ‘National Development Plan criticised for ‘simplified’ view of SA’s youth’, BD Live, 21 March 2013, viewed 7 April 2013, http://www.bdlive.co.za/national/2013/03/21/national-development-plan-criticised-for-simplified-view-of-sas-youth
‘Tax incentive for youth employment’ 2013, SA News, 27 February 2013, viewed 7 April 2013, http://www.southafrica.info/business/economy/development/budget13d.htm#.UWHZXjf4KPo
Blumenfield, J 2012, ‘Understanding SA’s youth unemployment problem’, Politicsweb, 29 November 2012, viewed 7 April 2013, http://www.politicsweb.co.za/politicsweb/view/politicsweb/en/page71619?oid=343916&sn=Detail&pid=71619
Du Toit, R 2003, ‘Unemployed Youth in South Africa: The Distressed Nation?’, Paper presented at the Minnesota International Counseling Institute (MICI), 27 July – 1 August 2003, Minnesota, viewed 7 April 2013, http://intranet.hsrc.ac.za/research/output/outputDocuments/2286_DuToit_UnemployedyouthinSA.pdf
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