South Africa has a serious unemployment problem, particularly among young people. A worrying side-effect is chronic unemployment: those who have never worked at all, or who have not worked for so long that getting a job is much harder. Several initiatives have been introduced to combat unemployment – most recently, President Cyril Ramaphosa’s Youth Employment Service (YES). But can they work?
Youth unemployment is one thing. But some battle to find secure employment for so long that they leave the youth category, still looking.
Noludwe Mabele achieved a certificate in secretariat studies in 2001, but has yet to secure a job in her field.
“You find that even if you’ve done your degree, if you haven’t worked according to your career, the companies don’t want to hire you,” says Mabele, 36, who is still searching for a job as a secretary.
Mabele exemplifies how an unforgiving job market can bring a young person’s career aspirations to a halt. Without a job after training, the time she spent searching for secretarial work not only stalled her career momentum – it forced her to backtrack.
“It’s been a long time. Now, if a company calls me, says, ‘Noludwe, come and help us,’ it’s going to be difficult. For instance, I’m trained in switchboard [operating] and speed typing. But now I don’t have the speed I had in school. I’m getting worried.”
Since leaving secretarial college, Mabele worked across industries. She’s sold perfumes at a market stall, taken various short-term administration roles, and been an exam monitor.
“I am trying everything, as long as I am getting money at the end of the day,” she says.
Mabele’s varying jobs raise questions for hiring managers. In her experience, her versatility is seen as a weakness rather than a strength. Mabele thinks her time away from the industry may mean her skill-set is not as relevant as those of new graduates.
“Companies do not want to train people. That is why the government takes people for the learnerships and the internships.”
Photo: Noludwe Mabele sits at a computer inside the NYDA centre in Cape Town. Photo: Rebecca Redelmeier
Hoping to make up for her years away from the industry, she once attended a government-sponsored two-day business course in Green Point to meet people who could offer her secretarial job opportunities. She also takes advantage of the resources offered at the National Youth Development Agency (NYDA) in Cape Town, where she can use a computer and free internet to apply for more jobs. Under pressure from her parents to find a job in the field where they paid for her training, she applies for as many secretarial jobs as possible.
As Mabele’s seemingly endless job search inches on, she and her one-year-old son stay with her parents in Philippi. Many of her friends are in the same position, and they encourage each other to remain hopeful.
“They are motivating me. We chat to each other and give motivation, saying, ‘No, you are going to be fine,” she says.
Mabele is not alone. For Nonkazimlo Soyiba, it was training in a male-dominated field that held her back.
Soyiba, too, is at the NYDA in the Golden Acre Shopping Mall. She is a 32-year-old mother of three, seeking employment after completing a certificate in plumbing with the Department of Public Works in 2017. Having matriculated in 2005, Soyiba took odd jobs, but after years of merely surviving, she aimed higher. When the opportunity came to do a learnership in plumbing, she took it.
A year later, she is still looking for work, while her male counterparts are happily employed. Soyiba has reached a new level of desperation.
“I’ll take whatever comes my way now,” she says.
“A friend told me to come to the NYDA, saying they offer assistance in finding a job. There is also free wi-fi to help me look for more jobs.”
The NYDA offers services and training to people aged 14-35, hoping to tackle the high youth unemployment rate in South Africa. Services include a grant to young entrepreneurs, and training on conduct during interviews with prospective employers.
Photo: Nonkazimlo Soyiba uses the free WiFi and computers at the Cape Town NYDA branch. Photo: Aphiwe Ngalo
Soyiba cites her gender as the biggest obstacle to getting a job in plumbing.
“Companies tell me to my face they would rather hire a man, and what sets me back further is that I am a mother to three children.”
Soyiba says most of the men who did the learnership with her have found jobs, while she and her female counterparts are still job-hunting.
In the third quarter of 2017, 30% of South Africa’s 10.3 million youths aged 15-25 were not in employment, education or training. The number of youths neither learning nor engaged in income-generating activities has risen from two million in 1996.
Also in 2017, StatsSA reported that 39% of unemployed South Africans had never worked before. Among youth, that figure was 60.3%.
Chronic unemployment is a problem among older workers, too, many of whom have been unemployed for five years or more. Among 50-65-year-olds, this was true of 47.4%. By the fourth quarter of 2017, the overall expanded unemployment rate had declined by 0.5 percentage points, but was still 36.3% at national level. The world average is 7.9%.
Derek Yu, Associate Professor in Economics at the University of the Western Cape, argued in 2017:
“South Africa’s unemployment rate has been rising steadily for the past nine years… The rate has gone up despite policies being adopted that promised to cut joblessness. These included the New Growth Path which was adopted in 2011 and promised to create 5-million jobs and reduce unemployment to 15% by the end of 2020.
“But in the intervening six-plus years, employment increased by 2.2 million, bringing the number of unemployed to 6.17 million. What’s even more concerning is that the annualised unemployment growth rate of 4.8% is double that of employment growth (2.4%).
“If these trends persist, achieving the even more ambitious goal set out in the National Development Plan of dropping the unemployment rate to 6% by 2030 is highly questionable.”
Mabele and Soyiba’s cases illustrate a problematic reality: there are attempts to curb unemployment, and yet they don’t always reach those who need help the most. Both Mabele and Soyiba have taken advantage of learnerships, to no avail; they are currently using a resource that should, in theory, be vastly helpful: the NYDA. Yet for them and many others, the wait for employment continues. Why?
Samantha Richmond, Senior Operations Manager at the National Income Dynamics Study, spoke to Daily Maverick. NIDS is the first national household panel study in South Africa, and has surveyed the lives of some 28,000 South Africans over the past two decades.
A “persistently high” unemployment rate applied nationally as well as among youth only, Richmond said, and South Africa’s unemployment rate was high compared to similar economies as well as regionally.
“We also have many discouraged work seekers and non-seekers,” she said.
The recent World Bank Report on Overcoming Poverty and Inequality in South Africa pointed to several factors in the labour market – and unemployment in particular – that had to be overcome. Race remained a factor in the ability to find a job, and once in a job there was wage inequality, with wages tending to be lower for black Africans in particular. Women also find it harder to get jobs, also true at the youth level, and once in a job they tend to earn less than men.
There is also a persistent structural mismatch for both skilled and unskilled workers, with a supply and demand challenge for unskilled workers on one hand, and employers struggling to find skilled labour due to problems in the education system.
There are access problems, with many prospective employees far away from employment opportunities in urban areas or not having the resources to get to interviews, dress for interviews, or contact prospective employers.
But the simplest answer is that the unemployment problem is multifaceted. It’s a beast with many heads, so cutting off one head at a time, so to speak – while arguably helpful in some areas – hasn’t killed it yet.
NIDS data has been used to inform further studies that can point towards solutions. Richmond cited a paper by Kim Ingle and Cecil Mlatsheni, titled The extent of churn in the South African youth labour market: Evidence from NIDS 2008-2015,which investigates persistent unemployment. By examining patterns of persistence of employment – and persistence of unemployment – it looks at who is affected, and why; and at the sectors where employment is more stable.
The authors tracked participants in the NIDS panel study, where possible, over a long period of time, who were young and unemployed. (In some cases, by the time the study concluded, they were no longer classified as youth.) And it came to some interesting conclusions.
First, it argues, employment is not stable in South Africa, and this is not solely down to the economic environment – because the instability of employment has remained constant, despite changes in the economy.
But there were other concerning patterns. NIDS is conducted in phases, known as “waves” (it is currently in wave 5). Just 31% of the study sample were consistently employed throughout waves 1-4, while 7% were consistently unemployed. Over 40% were not economically active in at least two waves.
Those who were employed in at least three waves were usually a little older, underlining the problem of youth unemployment.
Further, the study looked at employment and consistency across sectors. The most people were employed in wholesale, retail and trade. In terms of consistency, people in community, social and personal services were more likely to be consistently employed in that sector (71%), making it more stable for employees; the wholesale and trade was similarly stable at over 70%. Manufacturing was much less stable.
This echoes the findings of the World Bank study and, Richmond says, illustrates that it’s important to align skills development to a) where the jobs are and b) what the economy needs.
“The skills coming out of education are not necessarily what the economy most needs or aligned to the jobs that are available,” she says.
Previous initiatives in SA have included the Umsobomvu Youth Fund and the National Youth Commission. Earlier in 2018, President Cyril Ramaphosa announced the Youth Employment Service (YES), intended to help government provide employment to some 1-million unemployed South African youth.
CEO Tashmia Ismail-Saville said at the time that more than half the 1-million youth entering the labour market each year did not have a matric certificate, a problem YES aimed to help address by finding new “places and spaces” for them to work.
Further, there would be BEE scorecard recognition to acknowledge businesses that employed young people during times of slow economic growth.
Treasury’s records, however, are subject to some lags in tax reporting, which means it’s not possible to get an up-to-the-minute picture of the extent to which the incentives are working. Nonetheless, a look at early uptake of the ETI is instructive. After the first year, Treasury said, take-up among qualifying companies was strong. In the 2014/15 tax year, 32,368 firms lodged at least one claim on the ETI. But it’s also worth noting that this was just 15% of firms in the tax database with eligible employees.
Looking at the same dataset, the ETI was claimed for 134,923 jobs in 2014 and 686,402 jobs in 2015, which suggests the ETI supported around 5% of all jobs in the tax dataset, based on individual employee tax certificates, said Treasury.
“If we consider the number of individuals supported by the ETI, which is closer to the Statistics South Africa Quarterly Labour Force Survey definition of employment, we find that there were 645,973 individuals with ETI supported jobs. This constitutes around 5.7% of all individuals in the tax database, and around 17% of all 18- to 29-year-olds.”
The good news, then, is that even early on, the ETI did have some impact and did reach the intended age group; the bad news is that these ETI-supported jobs amounted to just 1.02% of total jobs and a massive 85% of qualifying companies did not take advantage of the incentive.
Mamokgethi Molopyane wrote in Moneyweb in April:
“We haven’t made much of a positive impact following the launch of youth unemployment-related initiatives… A government that’s scratching its head on how to solve its unemployment crisis is worrying; however, the biggest indictment remains how corporate South Africa, even when incentivised, hesitates or is reluctant to employ its country’s recently-graduated youth.”
Richard Rayne, Learning Chair of the Entrepreneurs Organisation (EO) and CEO of iLearn, believes an answer may lie in more significant uptake of employment incentives by companies. He told Daily Maverick there were incentives and structures available to help unemployed graduates as well as older unemployed citizens, even those who had been unemployed long-term; but that it was necessary for both prospective employers and prospective employees to take advantage of them.
Rayne is also a firm believer that skills development itself will need to be updated to keep up with the rapidly changing demands of the working environment. He advises job-seekers, if they can access the internet at home or through resources like the NYDA, to keep their skills updated by taking advantage of cheap or free digital learning platforms (e.g. Massive Open Online Courses [MOOCs]).
Rayne believes there is an opportunity for employers to up-skill both existing and prospective employees and contribute to economic growth.
“There are endless advantages to upskilling the workforce, especially in areas of national significance; that’s really where we need it most. SMEs specifically need to start seeing the value. An educated, equipped workforce means the business can move to greater heights, which in turn has a positive effect on the economy,” he says.
Rayne encourages SMEs to consider introducing skills development initiatives, and when doing so to develop a Workplace Skills Plan (WSP) and Annual Training Report (ATR). He explains that these will allow employers to reap the benefits, which includes achieving compliance, earning financial rebates and adding strategic value to a business. Accredited short courses can also easily be incorporated into a skills development plan, he adds.
Rayne believes this potential is untapped within SMEs. According to research by the Global Entrepreneurship Monitor (GEM) and the Banking Association of Southern Africa, the SME sector is estimated to contribute between 35-45% to the country’s Gross Domestic Product (GDP) and 50-60% to the labour force.
But the NIDS and StatsSA data suggest there are also bigger problems that must be addressed at policy level. Incentives for employers to hire those most in need are an excellent start. But long-term, those many heads will have to be tackled, one by one. DM
Photo: Thousands of hopeful job applicants queue for 200 positions advertised by the Metro Police Department in Durban, September 9, 2009. REUTERS/Rogan Ward