According to Stats SA, of the 10.3 million young people aged between 15 and 24 years, 32% – approximately one in three young South Africans – were not in employment, education or training in the first quarter of 2018. Expanding the definition of youth to 15 to 34 years, Trading Economics reports that the youth unemployment rate in South Africa averaged 52% between 2013 and 2018.
Government-led programmes
The Expanded Public Works Programme (EPWP), launched by the Department of Public Works in 2004, employs workers for short-term, temporary or ongoing projects with government, state-owned enterprises, contractors and non-governmental organisations, providing an important source of labour absorption. The programme is specifically aimed at those who are unemployed, unskilled and aged between 16 and 35 years. Government partners with various education and training authorities and companies to upskill programme participants. The EPWP aimed to create six million jobs for the 2014 to 2018 period. It has created around three million work opportunities in the past five years.
The Employment Tax Incentive Act (previously known as the Youth Wage Subsidy) was introduced in 2014 to incentivise the employment of inexperienced and untested young workers. A tax subsidy is paid to eligible employers for the first two years that a new and qualifying candidate below 30 years is employed, with the size of the subsidy dependent on the worker’s earnings. According to the Employment Tax Incentive Act (ETI) website, 270 000 young people have been employed by 29 000 companies under the scheme. The ETI was originally planned to run until December 2016 but has been extended until February 2019.
The Jobs Fund – an initiative of the National Treasury – was launched in 2011 with the aim of forming partnerships through grant funding, with public, private and civil society organisations, on projects that significantly contribute to job creation. The Fund focuses on supporting projects that use innovative models for creating jobs. By August 2018, 116 projects had been approved; R6 billion in grant funding had been allocated; 109 270 new permanent jobs and 42 545 short-term jobs had been created; 46 892 vacant posts had been filled; and 223 272 people were in training.
Private sector contribution
The private sector has a crucial role to play in helping to address youth unemployment. Companies should consider taking advantage of the ETI by employing more youth in internships, learnerships or permanent positions. Employers can review their recruitment criteria, or partner with organisations like Harambee – a youth employment accelerator that connects employers who are looking for entry-level talent to high-potential South African youth. Companies can also use their CSI funds to support job creation and job placement programmes. According to the National Development Plan, 90% of the jobs that need to be created by 2020 will be generated through small businesses.By supporting small, medium and micro-sized enterprises (SMMEs) and leveraging enterprise development initiatives, companies can indirectly assist in creating a vast number of jobs.
The Youth unemployment: what can we do in the short run? report recommends that companies consider lowering appointment criteria for jobs that don’t require high skill levels; that government and business work to address spatial and transport problems that limit access to central business districts; and that support is provided to non-profit organisations and social programmes that help young people to create social networks that can expose them to work opportunities.
The CEO Initiative, created in 2016 as a collaboration between business, labour and government, received an initial R1.5 billion investment from corporates for the development of SMMEs, with the ultimate goal of capacitating these SMMEs to create new jobs.
The Youth Employment Service (YES), supported by the CEO Initiative, was launched by President Cyril Ramaphosa in early 2018, with the goal of creating one million jobs in three years. This business-led collaboration with government and labour aims to stimulate demand-driven job creation through company investment and by leveraging existing government initiatives such as the ETI and Broad-Based Black Economic Empowerment (BBBEE) Codes of Good Practice. Since mid-2018, companies that meet the YES requirements are able to move up one or two BBBEE recognition levels. YES aims to place unemployed youth in year-long work experiences and training opportunities, develop critical skills – particularly in digital, business literacy administration and innovation – and to develop SMMEs in townships, through YES Community Hubs.
