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Unemployment in South Africa: Is there any hope left?

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Currently, unemployment in South Africa sits at its highest rate since the second quarter of 2009, which means the sad truth is that we’re back to eleven years ago. This lowly figure affects millions in our country daily, robbing them of opportunity, economic freedom and peace of mind – and we can’t put it all down to COVID-19.

Apart from the current worldwide pandemic that’s hit our country hard, the unemployment rate has been a major issue for years, making many South Africans fear for their future as they struggle to survive.

"...many South Africans fear for their future as they struggle to survive".

But if we look a little more closely, we know it comes in many forms: it is the sullen face of a man who has been unsuccessful after an interview, despite his best efforts – using his own money to get to interviews or print out his CV.

It is the graduate, who achieved so much, only to be told that there isn’t a place for them while seeing others get employed.

And, it’s the face of a country that held on to the promises of a new era, facing massive challenges, as democracy develops.

Unemployment affecting livelihoods

Many of us have been unemployed at some stage in our lives and have stayed in this predicament for days, weeks, months or even years. In today’s world, it’s a possibility that doesn’t discriminate between school-leavers and graduates, who expected to go straight into a job and ended up stuck. So, how do we get to the core problem?

Do we shift the anger to the government and say that service delivery just isn’t good enough? Do we shift the frustration to a society that has become careless about their own needs, which was constitutionally promised? Or, do we blame ourselves for reasons unknown?

It all boils down to the facts

If you look at the reports from Stats SA, the unemployment rate has dropped despite South Africa shedding jobs during the pandemic and as a general trend. So, how can this be? The truth is, looking at the unemployment rate isn’t a good way to find out how many people are actually unemployed because it doesn’t include people who aren’t actively looking for jobs.

The really useful measurement is the expanded unemployment rate which shows us how many people are really unemployed. The reason this is important is that many people have simply given up looking for work and the expanded unemployment rate shows us the truer story.

According to the Quarterly Labour Force Survey Stats SA (Q1:2020) the unemployment rate in January to March 2020 is at 30,1% – already alarming.

But here's the truth...

According to Bloomberg and other reputable third-party sources, we have a major problem on our hands. “While the official jobless rate fell to 23.3% from 30.1% in the three months through March, unemployment according to the expanded definition, which includes people who were available for work but not looking for a job, rose to 42% from 39.7%”.

"While the official jobless rate fell to 23.3% from 30.1% in the three months through March, unemployment according to the expanded definition, rose to 42% from 39.7%".

The next generation also finds themselves in the clutches of harsh reality with a youth (between 15 to 34) unemployment rate skyrocketing to 44.7% (out of 20,5 million – StatsSA.Gov.za). And workers continue to struggle in part due to lockdown restrictions. So basically, the youth unemployment rate remains a national crisis and one that comes with a heavy price tag.

South African Market Insights did a deeper investigation because they need the true picture in order to make educated investments. They explain the technicality well here. You can see in this graph below from Stats SA, that despite the supposed decrease in unemployment, there are more people who are not active economically.

stats sa q2 2020

The way forward through entrepreneurship

How then do we tame this monster without getting caught in its tentacles of crime, poverty, inequality, corruption and political mishaps? As much as the statistics paint an ugly picture, there’s still reason to hope. The world is moving towards a global revolution, where innovation is the new gateway to success and self-exploration is the new employment market.

"The world is moving towards a global revolution, where innovation is the new gateway to success and self-exploration is the new employment market."

Entrepreneurship is a dynamic industry that helps people create jobs for themselves, even when their startup capital is low. There’s a reason we created the School of Entrepreneurship. It wasn’t a capitalist exercise or a way to build hype only to leave students with no options. This is a practical way to start addressing unemployment and to give hope and opportunities to the unnurtured talent of the next generation. The old wasn’t working. It’s time for new ideas and fresh starts.

Quicquid capit (meaning: "whatever it takes")

I want to leave you with a bit of wisdom from Arijit Dutta, Managing Director of Priya Entertainment:

“We need to find solutions to tackle unemployment and close the skills mismatch which needs to be shared, replicated and scaled to solve the employment and skills equation. Traditional education systems can be restructured to adequately nurture talent for the needs of the market and the process of learning must continue during employment. Entrepreneurship or business ownership is a significant source of employment and economic growth.

This gains greater significance in the context of newly developing business models, the displacement of traditional jobs and new opportunities of doing business. The divide between education and employment, complex labour markets, along with changes in demographic patterns, migration and urbanization, are factors to match supply of talent with demand for it.”

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Leon Lategan

Leon Lategan

Leon Lategan is The Entrepreneur Activist, a Coach & Creator of Entrepreneurs and the Founder & CEO of the School of Entrepreneurship.
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