How South Africa’s unemploymen

Photo: Pixabay

How South Africa’s unemployment crisis can be fixed

The Centre for Development and Enterprise (CDE) reckons a ‘new deal’ to address the high rate of unemployment in South Africa is long overdue.

How South Africa’s unemploymen

Photo: Pixabay

Research from the Centre for Development and Enterprise (CDE) revealed that there are more than 10 million unemployed South Africans. The jobs crisis is felt across all sectors of society – from urban to rural areas; by recent graduates and retrenched professionals and across race, gender and class lines.

CDE executive director Ann Bernstein said change is urgently required. 

“The current approach to jobs is not working and a new deal is long overdue.”

Report shows ‘troubling decline’

In their latest report, Ten Million and Rising, CDE shows that the unemployment crisis is set to continue on a troubling decline. 

Between 2008 and 2019, the number of people who want work but cannot find it or have given up looking, rose from 6.5 million to 10.3 million. Every day some 1 700 adults join the labour market and fewer than 500 of them find work. 

The situation for young people (aged 15 to 34) is even worse. Between 2008 and 2019 the population of young people increased by 2.2 million, but the number employed fell by more than 500 000.

Government must adopt ‘package of realistic policies’

According to Bernstein, these statistics are concerning, but all is not lost. 

“We could make significant progress in stimulating growth and increasing employment if government were to adopt a package of realistic policies.”

Here are some of the reforms and suggestions that the CDE believes can contribute towards turning the crisis around, and getting more South Africans into the job market:

Deliberate urbanisation

The country needs policies that support urban densification, alongside a significantly improved public transport system and better urban management in expanding cities.

Far too many people live in rural areas in which there is little prospect of meaningful economic development, while many more live in denser settlements that are deemed urban, but which lack the diversity of skills and economic activities that are essential for producing the kinds of productivity accelerations that cities might otherwise make possible. 

Better urban policies are desirable because they will boost growth. They are also desirable because, by making cities more attractive, they will draw in more people who currently live in places in which there is no plausible path to prosperity. 

This is critical to jobs and unemployment precisely because the low levels of employment in rural South Africa, and the absence of substantial agricultural employment, are among the most important features of our labour market.

Welcoming skilled migrants

The only way to address the skills constraint is to encourage much higher levels of skilled migration to the country. 

This is something about which there is apparent agreement, but action is exceptionally slow and has often been distracted by attempts to define (as narrowly as possible) the “critical skills” we need, rather than recognising that any and all skilled migrants would be much needed and welcome additions to the workforce.

Lowering barriers to entry for entrepreneurs

Increasing competition in the economy would also raise long-term growth. To achieve this would require a dedicated focus on removing the regulatory hurdles and the compliance costs which prevent newer, younger firms from competing with incumbents.

Urgently needed reforms that would encourage more small businesses include improving the pace and predictability of tax administration, registering property, obtaining municipal clearance certificates, zoning approvals and construction permits, and securing connections to power and water networks. 

Many of the other issues about which businesses complain, relate to the functions of local government, where governance and administrative deficiencies are widespread, and where the infrastructure for which they are responsible increasingly seems to be on the point of collapse. This, too, needs to be a higher priority.