Durban - According to the latest statistics, the youth in South Africa remained vulnerable in the labour market with the number of unemployed youth aged between 15 and 34 years, increasing by 241 000 to 4.9 million in the first quarter of this year.
Statistics South Africa said that the youth unemployment rate rose by 1.1 percentage points to 46.5%
IOL posed five questions to Prasheen Maharaj, president of the Durban Chamber of Commerce, about the state of youth unemployment and what needs to be done.
Q: Why is youth unemployment so rife?
A: The macro economic conditions are not conducive to job creation. This is caused by a number of factors. Private sector investment, both local and International, has been crowded out due to crime, corruption and government inefficiency and bureaucracy.
A lack of investment and maintenance in all infrastructure, but especially electricity, ports and rails.
Onerous BEE and affirmation requirements has made many investors reconsider SA as an investment destination unless there is specifically something they want in SA.
While we cannot deny that BEE and Affirmation Action are necessary in order to rectify the injustices of the past, one of the unintended consequences has been capital flight out of SA to international destinations as well as it dissuades further or new investments into the economy. These consequences unfortunately negatively affect job creation.
Business Forums, Covid-19, looting, rioting and floods have caused the closure of many businesses, further exacerbating an already dire situation.
In addition to the poor macro economic situation, youth generally start off with entry level jobs to enable them to get experience and then move up the corporate ladder.
However, many entry level jobs in SA are being taken up by highly skilled foreign workers from other African countries who are willing to work for much lower salaries.
As a result, South African youth are not getting the opportunity to get experience and they remain unemployed.
The other aspect is that unions in South Africa are very militant. They make the cost of employment unaffordable.
This is a disincentive to jobs. Militant unions have caused the mining industry to shrink by 40% from 30 years ago due to unfair wage demands.
The minimum wage that a cleaner that works for Transnet, for example, is R130 000 per year. These levels of wages are not affordable nor sustainable, leading to high levels of employment that particularly affect the youth.
Q: What is the situation of unemployment in the KZN province?
A: The youth unemployment rate in KZN according to published statistics is sitting close to 60%. This is unacceptably high.
Q: Do the skills being cultivated match the need?
A: Historically, there used to be a mismatch with a dire shortage of artisans, nurses and teachers. This problem has been addressed to a certain extent, but not completely resolved.
However, I strongly feel that as a country we should emphasise vocational training rather than university education.
In SA, we have an obsession with university education.
A couple of things happen there. There is a high degree of failure, resulting on less than 30% of people who go to university actually graduating.
Secondly, universities are not actually providing the practical skills that the economy can absorb. Remember that universities in SA are largely academic in nature. What the economy needs are people who have skills and can do things NOW.
Q: What needs to be done to bolster employment and create opportunities?
When I was elected president of the Durban Chamber of Commerce last year, I said that government and corporates cannot create jobs fast enough to deal with our increasing unemployment problem.
I advocated for an Entrepreneurial Revolution. When one studies leading developed economies in the world, they are characterised by a high level of self employment and the SMME sector accounts for 70% of jobs created in leading developed economies.
We don't have an Entrepreneurial Culture in South Africa and therefore we continue to remain job-seekers rather than job creators.
We have so many challenges in this country and people can earn a living solving these problems. We have an abundance of fertile land in this country, yet people go hungry and food is expensive because people don't see farming as a lucrative income-earning opportunity.
We need to reframe our mind about how we look to earn a living. We must not only look at earning a salary or wage. We must look at income earning opportunities by using our skill sets to provide services to multiple organisations or individuals.
The Gig economy post the Covid-19 pandemic is gaining traction. Due to the 4th and 5th Industrial Revolutions and the advent of globalisation, we can find many jobs all over the world that can be executed right here from SA. Websites like www.freelancer.com and www.upwork.com and hundreds of others offer many income-earning opportunities.
We should have compulsory internship or apprenticeships in the country on a minimum stipend basis in order for youth to get work experience. The lack of experience is the primary reason young people can't access to jobs or start their own businesses.
Q: Are we seeing more young people leaving our shores for better opportunities beyond our borders, why is this happening?
A: I think its primarily the middle class and upper middle class that are doing that because they can afford to do that. This sector of the population is doing it as they see no future for themselves as a result of BEE, Affirmation Action, they migrate to economically more lucrative areas than SA or a general need to see the world.
The poor and most vulnerable don't have the option of moving overseas unless they are sponsored.
* The views expressed here are not necessarily those of Independent Media or IOL.