Unemployment in South Africa: Causes and Solutions

South Africa has had a pervasive unemployment problem for the past forty years (Lam, Leibbrandt, & Mlatsheni, 2007). According to the Quarterly Labour Force Survey conducted by Stats SA (2012), of the 10.4 million South Africans within the ages of 15 and 24 years, 3.3 million (31.6%) are not in employment, education or training (NEET). The South African government realized that unemployment, inequality and poverty in South Africa are a problem and thus appointed the National Planning Commission (NPC) – chaired by the Minister of Planning, Trevor Manuel – to address these issues. Shortly after its appointment in May 2010, the NPC began working on its long term vision and strategic plan for South Africa – the National Development Plan (NDP). This essay will discuss the causes of youth unemployment in South Africa and, with the aid of economic theory, propose solutions to the problem.
Of the 4.5 million unemployed people in South Africa, roughly 86% are black while not even 3% are white (Stats SA, 2012). The uneven spread of unemployment in South Africa is said to be directly linked to its unique political history, specifically, the Apartheid regime (Harakas, 1970). Harakas (1970) simply describes Apartheid as the principle of geographic segregation of races. Such a system gave rise to many consequences, particularly the rigid reinforcement of non-white social, educational, economic and political inferiority (Harakas, 1970). Under the Apartheid regime, non-whites were denied the opportunity to attain quality schooling or to succeed financially which would assist them in affording quality schooling, which Anderson, Case & Lam (2001) found to be an important determinant of subsequent opportunities for employment.
Stats SA (2012) found that in general, lower levels of education are associated with high unemployment. At the end of 2012, of the total unemployed population, 61.3% did not have matric, 32.1% had only matric and 6.2% of the unemployed had tertiary

References: Anderson, K., Case, A. & Lam, D. 2001. Causes and consequences of schooling outcomes in South Africa: evidence from survey data. Banerjee, A., Galiani, S, Levinsohn, J., McLaren, Z., Woolard, I. 2008. Why has unemployment risen in the New South Africa? The economics of transition. 16(4):715. Bin Shaari, M.S., Hong, T.H. & Shukeri, S.N. 2012. Foreign Direct Investment and Economic Growth: Evidence from Malaysia. International business research. 5(10):100-106. Blanchflower, D. & Bryson, A. 2004. What Effects Do Unions Have on Wages Now and Would Freeman and Medoff Be Surprised? Journal of labour research. 25(3):386-414. Borensztein, E., De Gregorio, J. & Lee, J. 1998. How does foreign direct investment affect economic growth? Journal of international economics. 45(1):115-135. Cho, H., Glewwe, P. & Whitler, M. 2012. Do Reductions in Class Size Raise Students ' Test Scores? Evidence from Population Variation in Minnesota 's Elementary Schools. Economics of education review.31(3):77-95. Harakas, S.S. 1970. Apartheid: Its Effects on Education, Science, Culture and Information. Greek orthodox theological review. 15(1):158-160. Kraak, A. 2013. State failure in dealing with the NEET problem in South Africa: which way forward? Research in post-compulsory education. 18(1):77-97. Lam, D., Leibbrandt, M. & Mlatsheni, C. 2007. Education and youth unemployment in South Africa. Nthite, T. 2006. Teacher shortage threatens education. [Online]. Available: http://www.iol.co.za/news/south-africa/teacher-shortage-threatens-education-1.287908#.UVzH-qLe4uc [2013, April 3]. Simkins, C., Rule, S. & Bernstein, A. 2007. DOUBLING FOR GROWTH: Addressing the maths and science challenge in South Africa’s schools. Johannesburg: The Centre for Development and Enterprise. Stats SA. 2012. Quarterly Labour Force Survey. Pretoria: Statistics South Africa