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Making a dent in SA’s unemployment crisis

MONEYWEB / 14 MARCH 2019 - 00.14 / RAY MAHLAKA

The job creation initiative has created more than 3 000 work opportunities since its start nearly five months ago.

Although the start of the Youth Employment Service (YES) hit a snag due to the government’s chronic delays in legislating the job creation initiative, it has created 3 360 work opportunities for young people in its nearly five months of operation.

The Youth Employment Service has created 3 360 work opportunities for young people in its nearly five months of operation. Picture: GCIS

This figure was unveiled by YES CEO Tashmia Ismail-Saville, who adds that nearly 400 companies committed to creating 11 446 new jobs during this period. But some black youth, between the ages 18 and 35, are yet to be placed in those jobs.

“These 11 446 new jobs are actual commitments,” she tells Moneyweb. “The recruitment and placement of people in actual jobs takes a bit longer.”

YES, the business and government initiative launched in March 2018 by President Cyril Ramaphosa shortly after his inauguration, is part of his broader ambition to create one million work opportunities for the youth in three years, or 330 000 jobs a year.

Incentives for supporters

Companies that support YES by employing young black people for at least 12 months are awarded broad-based black economic empowerment (B-BBEE) incentives including being moved up two levels on their B-BBEE scorecards and certificates. Employed youths must be paid at least the national minimum wage of R3 500 a month or R20 per hour.

Taking into account the more than 11 000 new jobs created since YES began operating in November 2018, Ismail-Saville says the initiative is creating an average of 670 work opportunities per week for young people who have never had an income and work experience.

YES is beginning to yield results at a time when the government has lost the credibility to deal with an unprecedented unemployment crisis, with 6.1 million people out of a job, according to the latest figures from Statistics SA. The unemployment rate among individuals younger than 25, using the expanded definition, is 67.6%. In other words, nearly seven out of 10 young people in SA are unemployed.

Red tape

Like earlier job creation initiatives, YES buckled under the weight of government bureaucracy. Its launch was delayed and almost scuppered by the department of trade and industry’s (dti) failure to quickly gazette B-BBEE codes for YES into law. To launch YES, B-BBEE Codes had to be amended to make provision for their incorporation into the broader B-BBEE Codes of Good Practice. The dti only signed B-BBEE codes for YES in October 2018 – seven months after the initiative’s launch.

The dti also introduced and later scrapped policy provisions that would require companies supporting YES to invest 2.5% of their payroll in bursaries for black students at higher education institutions before they can qualify for BEE points – placing an unreasonable financial burden on companies.

Slow economy

YES faces another challenge: convincing businesses to employ more young black people at a time when South Africa’s struggling economy is impacting their profitability and growth.

The economy, which grew by a paltry 0.8% in 2018 and is expected to see growth of 1.9% in 2019, isn’t growing at a substantial enough pace to make a dent in the country’s unemployment crisis.

Economists and researchers argue that economic growth of more than 5% is required for job creation.

The slow pace of economic growth might undermine YES’s target of placing at least 100 000 people in jobs annually. Ismail-Saville is mindful of this challenge.

“Any negative economic climate, or business confidence that is low, makes it more challenging to create jobs and get young people to enter the economy,” she says. All the more reason YES needs to happen, she adds.

Ismail-Saville is not obsessed with numbers and targets. For her, it’s about giving black youth – even if it’s just one person – exposure to a job market that structurally blocks people from being employed due to onerous requirements such as work experience and qualifications.

“Some people are born with privilege in a country where most people start out with very little opportunity and choice to improve their lives,” she says.

“If YES is able to deliver some form of opportunity and choice for young people, then I would have a deep sense of personal satisfaction. That’s the country I want to live in; a country that doesn’t neglect people, a country where people who are privileged are working together to redress inequality and unfairness.”

Listen: Youth unemployment: The hunt for lasting jobs continues



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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