Youth Day, #youthjobs and the challenges facing South Africa Reply

I always say that South Africa faces significant challenges: low economic growth rates, a high unemployment rate, poverty and inequality. This weekend we celebrated Youth Day and the challenge of youth unemployment was discussed all over. The idea of a youth wage subsidy has been proposed by government, lauded by the DA and opposed by COSATU.

  • The DA’s views are here.
  • If you are interested in the academic analysis, have a look at the work that AMERU at Wits is doing.
  • and this weekend the City Press has a whole special feature on the youth and the challenges that they face.

These South African challenges should be seen against a global backdrop outlined by a report published by the McKinsey Global Institute. They write that globalisation has brought people into the global labour pool, raising productivity and incomes. But following the great recession there has been increased unemployment, rising inequality and high rates of youth unemployment.

Age profile and educational attainment
Source: McKinsey Global Institute report

Their statistics are staggering: over the period 1980 to 2010, 1.1 billion non-farm jobs have been created, college/university graduates in the global labour force has increased by 245 million and 1 in 5 new non-farm jobs in developing economies are associated with exports. The report goes on to detail how the forces of demography and globalisation will shape the global labour market over the next 20 years.

South Africa is classified as a young middle-income country that is supposed to benefit from a demographic dividend of an expanding labour force. This will however depend on the cost of labour and educational attainment. The report predicts a global shortage of high-skilled workers and not enough jobs available for medium- and low-skill workers. Since South Africa cannot compete for low-wage labour intensive jobs, this makes educational attainment so much more important.

The story of the successes and failures of education in South Africa is one for a different post. Or you can have a look at Nic Spaull’s work.

As part of the City Press special feature, editor Ferial Haffajee also engaged people in discussion on Twitter with the tag #youthjobs and we made a short Storify that captures many of the issues, as they live in regular people’s hearts:

[View the story “Youth day and #youthjobs” on Storify]

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