SA’S ECONOMY IS FAILING ITS YOUNG PEOPLE
- BEE NEWS
- Mar 31
- 5 min read
Ann Bernstein and Stefan Schirmer | 30 March 2026
Almost 12.5-million South Africans are unemployed. Many of them are young people desperately trying to find their first job. However, President Cyril Ramaphosa recently said only that “too many South Africans remain unemployed”, and “too many young people struggle to find their first job”.
In a country facing one of the world’s worst unemployment crises, those statements sound like a dramatic underestimation of the crisis. The scale of unemployment should continue to shock us. So too should its trajectory: things are getting worse, not better.
Since Ramaphosa took office in 2018, the number of unemployed South Africans has risen from just fewer than 10-million to nearly 12.5-million. Apart from occasional, temporary improvements that are more likely to be statistical noise than anything else, the trend has been relentlessly upwards.
Young people bear the brunt of this crisis. Almost 55% of South Africans aged 15–34 who want work cannot find it. About 7-million young people are unemployed, including many discouraged workers who would like to work but have given up actively searching. Most have not had a proper job.
A central part of the government’s response has been to promise “work and livelihood opportunities through public and social employment programmes”. These programmes offer a degree of relief, albeit temporary. In truth, compared with the scale of the crisis they are little more than Band-Aids. They cannot change the structural realities of mass unemployment.
South Africa will not solve unemployment without faster economic growth. Reaching 3% growth quickly — and then moving beyond it — must be a national priority. Only sustained expansion can create the millions of new jobs needed to reverse current trends.
There is one piece of encouraging news. Over the past decade job creation has broadly kept pace with economic growth. In 2015–25 the economy grew at about 0.76% per year, while employment increased at about 0.77% annually — almost a one-to-one relationship. When growth accelerates, as it did during the 2004–08 expansion, many jobs can be created. So, let’s urgently go for much faster growth. It’s the only viable strategy to make a real dent in our unsustainable unemployment rate.
However, there is one critical exception: young workers. Over the past decade youth employment fell by about 520,000 jobs. In other words, while the economy expanded modestly, employment among young people shrank by about 8%. Growth in South Africa thus creates jobs, but not for the young. This means even if economic growth improves, the economy will continue to struggle to absorb young job seekers.
Why does growth benefit older workers but not the young? Young workers, by definition, lack experience. They are less proven, less predictable and often less productive than older workers. In more flexible labour markets this disadvantage is offset by experimentation: firms can hire young workers at wages that reflect their lower productivity and can let them go relatively easily if things do not work out.
In South Africa that flexibility is severely constrained. When a firm advertises a vacancy it often faces hundreds, sometimes thousands, of applicants for only a handful of positions — far too many to evaluate properly. In a country where most job seekers have limited skills and long periods of unemployment behind them, filling a vacancy becomes a high-stakes screening exercise. Faced with so many applicants, employers minimise risk; they choose experience.
That preference becomes structural exclusion when labour regulations turn every new hire into a potentially costly legal commitment. If an employer cannot adjust wages and faces expensive, time-consuming dismissal procedures when a hire does not work out, the safest choice is not to take the risk on an inexperienced worker. This is the wall of risk that keeps young people locked out.
A healthy labour market is a ladder: a first job leads to experience, which leads to better jobs and upward mobility. In South Africa we have built something else — a fortress. Inside are workers with experience and protection. Outside are millions of young people who cannot get a foot in the door. If we want young South Africans to work, we must lower the risks and costs of hiring inexperienced workers.
South Africa will not solve unemployment without faster economic growth. Reaching 3% growth quickly — and then moving beyond it — must be a national priority. Only sustained expansion can create the millions of new jobs needed to reverse current trends.
The following reforms could help:
The law should allow probation periods of up to 12 months for all new hires, regardless of job complexity. During this period employers should be able to terminate employment more easily if a worker proves unsuitable, while prohibiting dismissals that are automatically unfair, such as those based on discrimination. Probation should function as a genuine trial period rather than an irrevocable long-term commitment.
The government should remove the automatic extension of bargaining council agreements to non-signatories. For many small firms, rural businesses and new entrants these agreements impose wage levels and conditions that make hiring high-risk, low-productivity workers unaffordable.
Restrictions on labour brokers should be lifted. Labour brokers once provided important pathways into work, particularly for young people without networks or experience. South Africa needs more pathways into employment, not fewer.
We must confront the failures of our education and skills systems. The basic education system continues to leave many young people poorly prepared for work. The skills system also frequently fails to equip them with usable training.
The sector education & training authorities (Setas) are widely recognised as ineffective. Rather than attempting minor, piecemeal reform — such as Ramaphosa’s recently announced plan to “reform and reduce” them — they should be closed and replaced with employer-driven apprenticeships and high-quality private training programmes. Technical and vocational colleges must also be strengthened through partnerships with industry and a far larger expansion of work-based learning.
South Africa’s youth unemployment crisis is already severe, and it continues to deepen. Young people are the majority of the unemployed and consistently find themselves at the back of the hiring queue. An economy that absorbs more labour requires real reform, not more public employment programmes. The goal must be to make it easier and less risky for firms to hire young workers in the ordinary course of doing business. That requires targeted changes in the laws regulating the terms of employment, real reform of the education system and a far more effective skills system.
Without reform, economic growth will continue to benefit those already inside the labour market while young people remain locked out. As Nobel laureate Paul Romer once warned, if South Africa cannot solve the problem of getting young people into work, it may not matter what other problems we do solve.
Bernstein is head of the Centre for Development and Enterprise (CDE). Schirmer is CDE director of research.
‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’.