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Justine de Lange | 15 March 2023

Many factors contribute to a need for more jobs available.

Our country is notorious for its extremely high unemployment rate, especially since reaching a staggering 35.30% in the fourth quarter of 2021, considered an all-time high. Many variables that do not currently relate to COVID-19-related issues are also significantly impactful to the unemployment rate, which we will detail shortly.

For those curious, the unemployment rate has somewhat redeemed itself as of late, at 32.9% in the third quarter of 2022. However, some estimates have stated that the value may rise again in 2023, with a value of over 35%. This rise means a lack of job opportunities will impact more families.

Knowing this potential looming threat of another increase in those without jobs in the country, it is helpful for individuals to understand what factors impact that value. Here, we discuss everything you should know about unemployment in the country, including five causes of unemployment and the causes of youth unemployment in South Africa.

What is the issue of unemployment in South Africa?

Specifically, the unemployment rate was 63.9% for South Africans aged 15-24 in the first quarter of 2022 and 42.1% for individuals aged 25-34, with the national rate at 34.5%.

The Quarterly Labour Force Survey (QLFS), where the statistics were derived from, has highlighted that there is an apparent concern for the country's youth.

What are the leading causes of unemployment?

Globally, the main concerns that cause a lack of job opportunities are recession on a global scale, sky-high interest rates and an overall financial crisis.

So, what are the five reasons for unemployment in South Africa?

1. Inadequate education and training

The country's leading cause of unemployment is adequate education and training for specific job roles. Since our country generally needs more resources for guidance and apprenticeships, many need the essential information and skillset.

2. Limited entrepreneurship

Significantly few individuals in the country have utilised entrepreneurial skills and gained financial independence for multiple reasons. One aspect is the need for more support for entrepreneurs. The other is that the legislation surrounding the process is complicated and expensive, limiting the accessibility for the standard or less-advantaged individual.

3. Mismatched labour supply and demand

Since the country's population is over 61 million in 2023, many seek work, to no avail. This value does not equate to the number of job opportunities available since the job market is incredibly saturated with many needing jobs and little positions available.

4. Lasting impact of The Great Recession

The Great Recession from late 2007 to mid-2009 had devastating effects globally for years after the fact. The slowdown of economic movement and labour filtered through job availability, with many losing jobs and struggling to compensate for the financial loss, even today.

5. High demand for trade unions This may be a surprise since trade unions are inherently considered positive since they protect workers' human rights through adequate pay and working conditions. However, many companies need to meet higher salary demands and, thus, let employees go to compensate.

Social factors that contribute to unemployment in South Africa Perhaps one of the most significant factors socially could be the lasting mental effect that Apartheid/segregation had on the country. Although the financial and educational impacts are clear, the social implications of segregation have also played a role in the lack of job availability due to discrimination.

Reasons for unemployment in South African youth include all of the factors mentioned above, yet have added stressors that can exacerbate the jobless concern: a lack of strong social networks that can help get one's foot into the job market.

Youths are also often in homes where most, if not all members, are without jobs and, therefore, without the finances or ability to guide the youths living in the house towards the first steps into the job market.

The reasons for unemployment in South Africa range from global issues that many countries face, such as inflation, to more country-specific problems directly related to South Africa, such as the lasting, devastating effects of Apartheid.

Knowing the requirements of these concerns may help you avoid any downfalls, where possible.

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


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