Youth bulge set to become a time bomb
‘WHEN parents are better equipped than the children, it is a sign of regression.”
There was hardly any reaction when statisticiangeneral Pali Lehohla uttered these words on the recent release of Stats SA’s report, “The social profile of youth, 2009-2014”.
There should have been a national outcry. We have just celebrated 22 years of freedom — but how free are the youth of today if they have yet to achieve the goals attained by their parents under apartheid?
This sobering report highlights the extent to which the youth of South Africa are being failed. And it is not Lehohla’s first warning. He also flagged the regression in youth employment two years ago, on the release Stats SA’s 20-year review of skills and youth unemployment.
According to the social profile report, South Africa is experiencing a “youth bulge” as increasing numbers of young adults reach working age. But when these young people, who constitute 36% of the population, cannot find employment, this youth bulge becomes a demographic time bomb.
Over the past decade, according to the report, young people aged 15 to 34 made up about 70% of total unemployment and the “not in employment, education or training” rate for the youth was about 30%. In 2014, a little more than six million young people aged 15 to 34 were employed. This figure is 31 000 lower than for the previous five years and the decline was slightly larger for females.
It could be that the decline in youth employment from 2009 to 2014 is attributable to some young people returning to school, but the percentage of unemployed youth by level of education in 2009 and 2014 has remained more or less the same, which is distressing.
Young people with tertiary qualifications are the least likely to be unemployed, however, the number of unemployed graduates has remained the same for 2009 and 2014. This means the absorption of graduates into the workforce has not improved since 2009. This also means skills development in South Africa does not match the demands of public or private sector employers.
Disturbingly, according to the report, the percentage of black African professional, managerial and technical workers aged 25 to 34 has dropped 2% over the past 20 years, leaving that generation less skilled than previous ones and less skilled than every other race and age group.
Global trends in youth unemployment show it to be declining in industrialised countries, but rising in emerging markets as economic growth abates. Globally, youth unemployment is about 13%. South Africa remains an outlier when compared with its emerging market peers.
Youth unemployment in China has risen from 9.3% in 2010 to 10.6% in 2014. In Brazil,
They are yet to achieve the goals attained by their parents
which is also experiencing slower growth, the youth unemployment rate increased to 16% in 2015 from 14% in the previous three years.
The good thing about the Stats SA’s report is that it will allow policymakers to have a targeted approach when dealing with the youth unemployment problem. I hope it facilitates private and public sector involvement in solving this crisis.
High long-term youth unemployment does not bode well for future productivity. South Africa has yet to achieve the strong economic growth experienced by its emerging market peers because of its high unemployment rate.
And if the youth are performing worse than their parents, the future is in doubt.
Leoka is an economist at Argon Asset Management