Quandary about jobs for youth
The creation of employment opportunities, swiftly and sustainably, remains the fundamental intervention needed to integrate South Africa’s unemployed youth into the formal economy.
Subdued rates of economic growth since the 2008/09 recession and the relatively weak performances of key labour-intensive segments of the economy have further compromised its labour-absorption capacity. This is not simply a function of the economic cycle, but is also reflective of distinct and deep structural problems.
South Africa’s youth has been most affected and the challenge has been intensifying as new entrants join the labour force year after year. An expanding youth population relative to the overall population, combined with a decline in the youth’s share of total employment, resulted in higher youth unemployment rates over time.
While relatively low levels of education among the youth tend to reduce their employability, the persistently high youth unemployment rate also reflects the mismatch between the skills of jobseekers and those required by the economy.
In an economy that is increasingly requiring higher levels of quality education and specialised skills, unemployment rates are noticeably higher for youth than for adults, across all education levels. Furthermore, employability rises with the level of education, but the success rates are substantially higher for those who are 35 years of age and older.
The Industrial Development Corporation’s research team has analysed youth employment trends across nine broad sectors of the South African economy to ascertain recent developments in their labour absorption and youth participation in their overall employment.
We also aimed to identify the potential for integrating unemployed youth within the workforces of these broad sectors in the years ahead. The sectors were ranked according to the expected potential for youth employment creation over the next few years. The sectors considered to hold the highest potential to create jobs for youth are services related, with business services expected to achieve the most gains by a large margin. This would include opportunities created through the establishment of youthowned enterprises across various types of business services. Although adversely affected by the unfavourable economic environment in the short term, the trade (retail and wholesale), catering and accommodation sector was also expected to create a substantial number of job opportunities for the youth in the years ahead.
The sectors that show moderate potential for job creation for the youth are government and social services, building construction and agriculture, forestry and fishing. These sectors have the capacity to employ young unskilled and semiskilled workers.
The provision of services to communities by municipalities may also bring about employment opportunities in areas where the unemployed youth are residing, limiting the need for economic migration.
The agricultural sector is still one of the most labourintensive sectors of the economy. Although afflicted by the worst drought on record, this sector is uniquely positioned to absorb unskilled young workers mostly in rural areas, while also increasing food security and rural income levels.
The subsectors that are envisaged to create job opportunities include the high-valued agricultural subsectors such as fruits and vegetables. However, the employment opportunities in agriculture could be of a more seasonal nature.
Our employment projections indicate that the potential held by manufacturing sectors is generally more limited, relative to service- and agriculture-related activities, due to their higher capital-intensity, operational and other competitiveness challenges.
However, opportunities for youth employment do exist in various industries.
Global experience has also shown that increasing the skills levels of the youth and/or assisting them to obtain, or possibly even providing, initial employment experience are a means towards improving their employability.
A range of policies, strategies and mechanisms are in place in South Africa to support skills development, among other important factors, so as to enhance the employability of the youth. What is required in many instances is effective implementation.
However, addressing youth unemployment in the absence of an overarching unemployment strategy will not achieve the desired effect, as a number of international studies have indicated that youth unemployment is highly correlated to total unemployment.
Maia is head of research and information at the IDC