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ANC: Statement by Andile Lungisa, African National Congress Youth League Deputy President, on youth employment (12/03/2010)

12th March 2010

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Promoting youth employment in South Africa


President Jacob Zuma in his State of the Nation Address outlined a number of issues relating to challenges South Africa is facing on youth unemployment. He also took a bold step towards dealing with these challenges. He pointed out a number of interventions that would be undertaken to mitigate the systemic problem of young people being jobless. He said; "Proposals will be tabled to subsidise cost of hiring younger workers, to encourage firms to take on inexperienced staff."

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He further outlined public programmes that would be expanded. They included: infrastructure, literacy, home-based care, school maintenance and early childhood development. President Zuma added that; "We have also set up ambitious targets for skills development, to produce additional engineers and technicians∑ also increase the number of youth who enter learnerships in the private and public sector."

In his Budget Speech the Minister of Finance, Mr Pravin Gordhan, said one of the key dimensions of transformational challenges is; "One in four adults seeking work is unemployed, and almost half of our young people have not found work." The reality is that about 73% of unemployed economic active people in South Africa are the youth. He also cautioned that: "∑ the kind of transformation required to draw in the millions of unemployed people into the economy is not an easy task. It will take time and looking forward policies∑ [and] we must have courage to make difficult choices about investment priorities∑"

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The approach outlined in the budget speech on "measures to promote youth employment" proposes a subsidy to employers as an incentive to take more young people to participate in job training programmes. "We propose to support reforms through subsidy to employers that will lower cost of hiring young people without work experience. Under consideration is a cash reimbursement to employers for a two year period∑ our aim is to raise employment of young school leavers by a further 500 000 by 2013." Minister Pravin Gordhan said.

The National Youth Development Agency (NYDA) as much as it agrees that young unemployment is a priority problem for the country, it however, disagree with the proposed approach by government to decisively deal with this problem as it will make young people to be glorified slaves of companies in the interest of maximising profits. Interventions such as learneships, employer's subsidies and internships have failed to make any meaningful impact on youth unemployment.

The following are clear examples of why, as NYDA, we disagree with the proposed approach for the following reasons:
Learnerships have been implemented by the past government on the premise that it will create skills base that will be absorbed by the market, instead it has created unsustainable expectations from young people such that they have failed to gain the skills and at the end of the learnership they returned back to the unemployed world.
Internships which was aimed at building scare skills from young graduates also failed to achieve its objectives because employers saw an opportunity of getting cheaper labour to maximise their profits. As we speak we are sitting with huge skills shortages at local level such that service delivery is falling apart. This intervention again has failed to create the necessary numbers of jobs for the youth and has failed to create the necessary critical skills to sustain service delivery at all levels.
With the prospect of creating subsidies for firms to encourage youth employment, we will be repeating the same thing.

Subsidies to firms will, first of all, not create any new employment for the millions of young people who are unskilled and uneducated. Second, employers will window dress this initiative to ensure that they claim the maximum in the expense of skills development and permanent employment. Third, firms in South Africa do not have the capacity, skills and willingness to invest in sustainable skills development for young unskilled people. The numbers of young people who are unskilled far outweigh the ability and willingness of firms to make meaningful contribution.

The NYDA as custodian of youth development in the country has to shoulder the blame from the youth for failing to fight and protect their interest. It is for this reason that we are taking a different approach from government on how to realistically and tangible fight youth unemployment. The Agency's role is to jealously and unapologetically protect and defend youth interest.

The National Treasury must take full responsibility of sharing resources in a more pragmatic way. It seems the same instruments and tools are being used to allocated resources that are key to address skills development and employment for young people. The Department of Labour must shoulder the blame for failure to develop short and long term plans to avert the catastrophic outcomes of a country sitting with millions of young people with no prospect of getting employed.

The Agency is aware that it is not the panacea to address all the youth challenges alone. It has identified critical dimensions that are key in radical changing the state of affairs in improving young people's livelihood. These dimensions as already alluded to by both the President and the Minister are:
Deliberate skills development for the youth - this is the key towards addressing unemployment and sustainable livelihood for young people in South Africa;
Sustainable jobs creation - jobs required should be targeted towards the areas of greater need and linked to service delivery problems currently facing the country;
Mobilisation and coordination of youth targeted resources - resources, especially public sector resources must be planned, structured and allocated to build capacity of the youth of this country to sustain development.
This paper deals with these dimensions using experiences and observations from the communities the NYDA is working with. It uses the approaches taken by the NYDA to lobby and advocate for programmes that will ensure that government resources contribute in the development of young people.

Unemployment is acceptable high in South Africa as compared to other countries with similar economy. The Quarter 4, 2009 Labour Force Survey reported that 4,165 million of economic active South African is unemployed. Of the 4,165 million unemployed, 3,037 million (74.2%) were the youth between the ages of 15 - 34 years. Out of the 870 000 jobs lost during the same period 610,000 (70.1%) were jobs occupied by young people between the ages of 15-34 years.

These figures confirm the alarming unemployment rate amongst the youth in the country. However, given the vision and commitment of the government in taking this problem head on, a radical strategy is required to deal with this scenario if we are to half unemployment by 2014. The picture is clear that the country cannot afford to continue to fail to design deliberate interventions that would be biased towards job creation for the youth. To illustrate the problem of burden of lack of skills towards unemployment, the quarter 4, 2009 Labour Force Survey report state that, of the 4,165 million unemployed, 2,544 million had an education of less that secondary schooling. If we can extrapolate the number of young people represented in this population, using the proportion of youth in the total unemployed, it means 1,883 million of the youth are in this category.

To address huge skills development backlog of young people, we need to put urgent and swift interventions in motion. For this population to compete and get sustainable jobs in the labour market, they require targeted skilling that matches the basic needs to sustain the economy at the same time improving the quantity and quality of service delivery.

The other important dimension is the lack of skills amongst the youth in South Africa. This problem is the legacy of the apartheid past. In order to address this legacy, a multi dimensional approach has to be taken. This will include addressing both basic and higher education on one hand, whilst on the other, address a basket of issues relating to labour market, government policies and programmes, private sector commitment to develop, nature and retain talent and coordination of national efforts targeting unemployment and skills development in the country.

Given the context painted above and the experience the NYDA has working and interacting with young people across the country, a radical approach is required to change the status quo. Recognising and appreciating the statements from the President of the Republic and the Minister of Finance on proposals relating to subsidies for business that hire young people. This approach would not be sustainable nor will it have the required impact to deal with the millions of young people who will never have any prospect of being employed in their lifetime.

The cause of high unemployment amongst the country's youth is lack of proper educational foundation that would enable a young person to enter into meaningful job market once completed both basic and higher education. With such a high number of pupils falling out of the educational systems before they can even complete their basic education, the situation becomes more complicated.

The NYDA would propose to deal with these issues in a more specific and targeted way. We have segmented the approaches into specific cohorts facing different economic livelihood challenges.

The young people who drop out of the education system

The young people who drop out of school before completing matriculation (Grade 12) for many reasons. If we can take the class of 2005 entering high school, 425,873 did not register for grade 12 in 2009, an additional 47,686 of those who registered for grade 12 did not write exams making a total 473,559 young people who did not complete matric. These figures do not include drop out between grades 1 to grade 7. This indicates that over half a million children who enter our education system will not complete matric. This is a year-to-year phenomenon. How do we then deal with these young people?

First and foremost, the basic education system must be diversified such that it has both academic and technical streams so that pupils are taught both the traditional subjects and the technical subjects so that when pupils drop out they have a skills to fall back on. Basic technical subjects such as sewing, carpentry, cooking, agriculture, mechanic etc have to be re-introduced at basic education level. These subjects must not be seen as extra-mural subjects but as part of the education system.

We however, know that most of these young people will grow up and not find a job. The immediate approach to be taken is creation of Community Colleges in all the District Municipalities in the country. These colleges will train young people who dropped out of school on trades that are required at local level to improve service delivery. There are ranges of services that are currently stressed at local level due to a number of structural problems. These includes maintenance of municipal infrastructure such as roads and buildings, water supply systems, electricity supply systems, cleaning, parks maintenance, streetlights maintenance, refuse removals etc.

These functions are currently out-sourced in many municipalities through tendering processes. The practice of outsourcing or tendering has degraded the quality of service delivery, and second it has reduced the capacity of municipalities to offer sustainable employment and skills development for young people in their municipalities.

The NYDA is ready to work with municipalities, the South African National Defence Force, Sector Education and Training Agencies (SETAs) and Further Education and Training Institutions (FET Colleges) to kick-start this initiative. The municipalities should also make available facilities within their community infrastructures to run the training courses. The army is prepared to use its infrastructure and human resources to provide training for these young people.

These courses will be accredited by the relevant SETAs and certified by the FET colleges. This approach will require a comprehensive and integrated plan between relevant national government departments such as the Department of Co-operative Governance and Traditional Affairs, Department of Labour, National Treasury, Department of Defence and the Department of Higher Education. The SETAs and NYDA will be the main implementers of this programme.

The bigger question is how will this initiative be funded from the current MTEF? The Minister of Finance announced a number of funding proposals these includes R2.5 billion municipal infrastructure grant, R52 billion expanded public works programme; R846 billion on public infrastructure programme and unspecified subsidy to employers for hiring young people without work experience. The NYDA has worked out a funding model for this initiative. The funding will come from all the above sources of budget allocations.

The municipal infrastructure grant will contribute 10% each year for the next 3 years from the allocation. The Expanded Public Works Programme (EPWP) was allocated R52billion for the next 3 years, 2% of this budget must be allocated to this initiative each for 3 years. The Minister also announce a R846billion over the 3 years for infrastructure, this allocation must also contribute 2% per year to this project. The employers' subsidy programme must contribute stipends for young people over the period of their training. This can be calculated from the standard stipend currently provided for young people in National Youth Service (NYS) programmes.

The total contributions from the municipal infrastructure, EPWP and infrastructure programmes allocations will contribute about R6 billion a year for the next 3 years towards skills development and sustainable job creation for young people who have dropped out of the education system.

This approach attempts to answer this question: is it feasible and possible to reduce the unacceptably high youth unemployment in South African despite the prevailing context? In the next three weeks publish a fully discussion which it will take us forward progressively as the nation with out taking short cuts.

 

 

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