Understanding the root causes of unemployment || Possible root causes of unemployment || Employment trends
|| Working towards beating unemployment || Public perception on unemployment || Communication is key
Understanding the root causes of unemployment
Unemployment in context
There are various arguments about the causes of unemployment in South Africa, some of which are:
Some research shows that the deliberate exclusion of black people from the educational system and from skilled occupations under apartheid contributed to high rates of unemployment today.
Inadequate education and lack of productivity is costing jobs. Unemployment increases progressively with decreased educational levels; and the education system is not producing the skills for the labour market.
Labour supply is affected by the increase in the number of job seekers over the years. The rate of entry of women - especially African women - into the labour market has risen sharply. Furthermore, the South African population is a young population – more people enter the working age as compared to the number of jobs that become available in the labour market.
During the recession, many workers lost their jobs, the largest number in manufacturing. This meant that companies could no longer afford to employ more people and had to reduce the workforce, therefore contributing to the unemployment rate in the country.
Higher wage demands may lead to decline in new employment. Some argue that labour demands make South Africa’s labour regime inflexible while others point to it as important to improve the quality of life through a living wage.
Irrespective of various government initiatives to enhance entrepreneurship, entrepreneurial activity in South Africa is low. For example, the number of young people involved in entrepreneurial activity remains extremely low at 6 per cent of the total youth (18-34 years) population (DoC Tracker, 2014). This low level of interest is borne out by DoC research results as illustrated in Figure 1.
Figure 1: Owning, running or intending to start a business
The South African economy has been growing slowly with a relatively small employment growth over the years (Department of Labour, 2013). Economic growth has been too slow to create job opportunities (the dti, 2012).
Unemployment is a major issue for South Africa’s youth. However, this is also a global phenomenon given the sluggish world economy. International youth unemployment in certain Eurozone countries is also extremely high (Greece and Spain in particular).
At 36.1 per cent South Africa’s unemployment rate amongst the youth (15 to 34 years) is significantly higher compared to that of those aged 35-64 years. Unemployment is especially high (53.2 per cent) amongst those aged 15-24 years.
The slide below shows unemployment trends for youth aged 15-34 in comparison with adults aged 35-64.
Figure 2: Unemployment Trends
Source: StatsSA Quarterly Labour Force Survey, 2008-2014Q1
Working towards beating unemployment
The current situation in South Africa is far from being desirable and government working with social partners is hard at work to find sustainable solutions. The National Development Plan (NDP) calls for all South Africans to work together to realise the goal of reducing the unemployment rate to 14 per cent by 2020 and 6 per cent by 2030. Reducing unemployment is also one of the key priorities of government.
Reaching the goals of the NDP will require a change of mind-set from all role players, be it government, business or labour. We must find ways to tackle this issue decisively. This sentiment is confirmed by public perceptions of unemployment which are explored below.
Public perception on unemployment
Extensive scientific public opinion research indicates that, for quite some time now, South Africans perceive unemployment as the most important challenge facing the country.
Figure 3: Challenges the Public Want Government to Address
Most important challenges the public want government to address
Source: DoC Tracker
Information on how to find a job and how to get job training/skills development are the topics which are top of mind for most South Africans.
Figure 4: Public Sentiment on the Causes of Unemployment
Drivers of perception
Source: DoC National Qualitative Research
Research clearly points to the fact that the labour supply outstrips demand, which means that there will never be enough jobs created in the formal economy to absorb the unemployed.
It is also clear that more people should be encouraged to start their own businesses, to be entrepreneurs and ultimately self-employed.
However, what is also evident is that there are perceptions about the causes of unemployment, and in particular perceived stumbling blocks that have to be dispelled if we want to entrench a spirit of entrepreneurship in the country.
This is where communication has a big role and a big responsibility.
Communication is key
- Firstly a campaign at addressing the negative perceptions is needed which would encourage entrepreneurial spirit amongst South Africans and address feelings of hopelessness and perceptions regarding nepotism etc.
- Secondly there is an information/education gap where communication has a big role to play. The need for information on how to grow a business is extensive – e.g. where and how to find finance; how to market your business; how to attract new customers; how to run a business, the kind of skills needed; training opportunities; opportunities to gain experience.
- Lastly when job seekers make the decision to be self-employed, government should provide an effective and friendly service that helps them persevere.
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