Why tackling graduate unemployment in SA is important for post-covid19 economic recovery

By: Maria Goyayi

South Africa has long been facing the challenge of unemployment, particularly youth unemployment. Youth unemployment has persistently remained the highest irrespective of their level of education compared to older citizens in the country. Statistics South Africa reveals that youth are far less likely to find a job or to be absorbed in the job market than those that are older. While the nation boosts a leading position in the academic industry in the African continent, with 26 public universities and 130 registered private higher education providers, its graduates are less likely to find a job. South Africa hosts some of the highly ranked universities in the world; For instance, according to the Academic Ranking of World Universities (ARWU), which ranks over 1300 universities, in 2019 seven universities featured among the top 800 universities, top three in the nation being University of Cape Town (229), University of Witwatersrand (317) and University of KwaZulu-Natal (349). In public universities in 2017 have been enrolling more than a million students; in 2017 – 1 036 984 students, 2018 – 1 085 568 students, and in 2019 – 1 074 912 students. Correspondingly, the number of graduates in the three consecutive years from public universities was 210,931 (2017), 227,188 (2018), and 221,942 (2019). In 2019, registered private higher education institutions enrolled about 210,000 students and produced more than 42,000 graduates. Roughly 250,000 fresh graduates enter South African labor each year, of which approximately only 30% of the graduates find employment. South African graduates are not only far less likely to find jobs but even those who do so, are underemployed. Graduates are underemployed in that they either just take jobs to earn income in fields unrelated to their profession or are underpaid that is paid below the stipulated minimum wage. One-third of the employed graduates in journalism, public relations, graphic design, and creative and visual communication, including radio and television production and broadcasting, earn less than R10,000 ($700) a month, of which 11% earned even less than R5,000 a month.

Furthermore, the intractable graduate unemployment challenge has been worsened by the COVID-19 pandemic. Prior to the pandemic the aggregate youth unemployment rate, for people aged between 15 to 24 years, inclusive of those who have given up searching for jobs stood just under 70%, while among graduates it was 31.0% during this period compared to 19.5% in the 4th quarter of 2018 recording an increase of 11.4%. Despite government interventions, during the COVID-19 pandemic, the youth unemployment rate rose to 74%. The socio-economic effects of the pandemic have hit youth everywhere in the world much faster and harder than any other age group. In South Africa, youth have faced multiple shocks, including disturbances to education and on-the-job learning; employment and income losses due to reduced hours of work or lay-offs; and greater difficulties in securing good quality jobs. The subsequent high youth working poverty rates and their overrepresentation in less protected forms of work and sectors most at risk of disruption due to the COVID-19 pandemic have made youth more susceptible to the pandemic aftermath. Within the youth category, the effect is more propounded on marginalised youth groups such as young women, young people with disabilities, and young displaced persons, in addition to barriers they face in accessing learning and decent work opportunities.

According to the Quarterly Labour Force Survey (QLFS) for the first quarter of 2022, the youth unemployment rate has dropped to 63.9% for those aged 15-24 and 42.1% for those aged 25-34 years, with the current official national rate standing at 34.5%. Despite the notable changes in the first quarter of 2022, it is detrimental to understand why over 50% of the youth workforce is not yet being able to be absorbed by the labor market and how can the situation be improved to ensure that at least over 50% of the youth workforce is absorbed in the labor market. To comprehend this phenomenon it is thus crucial to highlight the importance of tackling graduate unemployment in South Africa, as an approach to post-COVID-19 economic recovery.

• Proportion of youth against the population:  Africa harbors one of the fastest-growing youth population globally, with 60% of the population being under the age of 25. In 2019, the youth population accounted for 35.7% of the entire South African population. Statistics South Africa reports that of the 40 million working-age population in the first quarter of 2022, more than half (51.6%) were youth aged between 15-34 years. Youth form a huge portion of the total workforce in the nation and for any substantive and sustainable economic recovery, the nation has to pay extract attention to resolving the youth unemployment challenges.
• Graduates as a source for the skilled labor force and employment generation: – The disruptive nature of the COVID-19 pandemic has forced the majority of organizations to embrace technology and revamp their course of operation. Likewise, with the threat of new competition, technology transformation, and rising customer expectations as top drivers of industry disruption, most current jobs are highly likely to cease to exist in the post-COVID-19 scenario. Therefore, employees will require a hybrid set of skills in technical, future-ready leadership, and essential power in the new digital economy. The disruptive course of the pandemic should thus be turned into opportunities for youth employment. Tackling graduate unemployment will thus, disposition graduates well to align with the need of the industry. Youth’s high risk-taking propensity makes them more disposed to take up new opportunities from the disruptive economy and also in taking a lead in the creation of innovative jobs.
• Graduates for Peacebuilding and Social Cohesion: – In South Africa, unemployment has left thousands of youths feeling hopeless. This has largely been attributed to the rise in discriminant actions and xenophobic attacks in the nations. Unemployment has enacted hatred and violence among youth; gendered and racial violence have propagated in the country for over years all in the name of jobs. Core to all the social vices and xenophobia in South Africa centers around poverty. Subsequently, tackling youth unemployment issues can foster peace and social cohesion in South Africa. Therefore, it is critical for the South African government and its stakeholders including Non-Governmental Organisations (NGOs) to issues that will eradicate poverty among its people, the root cause of the vices and criminal acts, rather than tackling social problems just from the top.

Youth form a large proportion of the South African population which presents a significant opportunity in promoting the recovery, growth, and advancement of the economy. Moreover, youth graduates present an ever ready to be tapped skilled workforce. While experience is frequently cited as an inhibition to employing youth graduates, it’s huddled that can easily be addressed by employers opening up doors for internships, practical training, and on-the-job training.  Factors such as poverty and discrimination, among others pose a huge risk in South Africa’s post-COVID-19 economic recovery. Therefore, it is critical to address the youth graduate unemployment challenge as it cuts across among the critical policy issues that the nation requires to address including peace and political and economic stability.

Maria Lauda Goyayi is a researcher at the School of Management, IT and Public Governance, UKZN. She writes in her personal capacity.