Small businesses could solve youth joblessness

3 July by Michael Bagraim

Before we entered into the Covid-19 lockdown, youth unemployment in South Africa had been reported to have reached the disastrous figure of 52%.

Our youth unemployment rate is probably the worst in the world and our education system doesn’t seem to equip us to enter the workplace with the necessary skills.

The government has had numerous labour summits, various schemes and spent billions of rand on ideas and structures to create employment for those entering into the economy.

All these schemes, summits, discussions and spending scenarios have left us with a situation which is getting worse every year. Every family is faced with the young adults who need to go out into the world and earn a living but who can’t even get an interview.

Our people are innovative, willing and eager to learn, but the situation for at least the past decade has not been conducive to create gainful employment for the younger members of our society.

Much of the growth we have seen in our economy has been “jobless growth” and many of the larger companies are mechanising, computerising and downsising. It has been clear all along that it can’t be business as usual and that we need to turn to the small business sector to help us create employment for those entering the market for the first time.

Larger companies want to see CVs, they want experience and they want to be able to get immediate satisfaction and productivity from new employees.

Our various job-creation summits have all spoken about the youth unemployment problem and have all identified it as a problem. Many of the summits produce copious reports and magnificent brochures.

The efforts don’t produce results and certainly don’t mean anything to the small business community. In reality, once we have identified the problem and we have identified a solution, we need to structure a way in which the small business community can be freed up to create more jobs for new work-seekers.

The government is not the vehicle to create jobs and can’t legitimately employ more people in the civil service. The government has a specific task, and that is to ensure that the small business community is deregulated to the extent that they can feel comfortable in employing our youth without attracting liabilities.

The first, and easy, task is to ensure that the Employment and Labour Ministry decouples the small business community from the various bargaining councils. These bargaining councils have rigorous structures, with enormous restraints when trying to employ people.

It is particularly unfair to make the small business owner compete with the multinationals. The small business owner often reacts by employing only family and then trying their utmost to mechanise.

As we have tried to restart the economy after bringing it to an abrupt halt during the lockdown, we are not going to see businesses starting to rehire. In fact, on the contrary, businesses have all embarked upon a mass-retrenchment programme. Our Treasury believes we will lose about 7million jobs over the next few months.

These facts and figures don’t mean that we must throw up our hands and forget about the real issue, which is youth unemployment. We do need to start restructuring the onerous labour legislation with regard to the small business community.

When we look at jurisdictions across Africa, we see how many countries on our continent have deregulated the small business community. On my trips to Mauritius and other African countries, I have noticed how the small business community is thriving and creating employment for their youth, while at the same time training them to fulfil sometimes the most complex tasks.

If we could free up our small business community, we could challenge jurisdictions such as Nigeria. We have an opportunity now to restart local manufacture and to encourage the large business community to engage and procure from small businesses.

We must encourage the government to continue with the support and training that they are already doing. Larger employers should be given tax breaks so as to allow more learners to enter into the workplace for practical experience.

One idea is to structure a new definition of an employee who is under 30-years-old and enters the workplace for the first time. This new employee could be called a learner and could gain a skill and salary at the same time. We are seeing this on a small scale through the Sectoral Education and Training Authorities.

We also need our schools and colleges to join hands with the business community to ensure that people are trained in such a manner to effectively make them valuable assets for the business community.

The Youth Wage Subsidy is a solid effort but is not as far-reaching as one would have hoped. Even the Expanded Public Works Programme (EPWP), which takes in the unskilled workforce, does not seem to be as far-reaching as we would have expected.

My experience with the EPWP is that people leave, having gained no extra skills and very little ability to move on to a more formal job. It would be fantastic if those employed within the EPWP scheme could get specific training with certificates thereafter.

It would also be fantastic if the various tiers of government would be able to help the participants in the scheme to draw up a CV and give them training on how to interview properly for the next job.

If the employment equity plans could include a section on taking in individuals who have no skills and no training and get some recognition for that, it would be an encouragement for every firm to do this. These training schemes should not differentiate on the basis of race, sex, colour and creed but should strongly differentiate on the fact that the individuals have no experience. The lack of experience should be the key for the larger firms to bring them in.

There has to be a complete mindset change both from government and from employers so as to ensure that our future generation is upskilled. We already have a lost generation who weren’t able to find jobs and therefore could not gain any skills. Employment should not be something that is unattainable, and in fact should be a right for everyone who wants to earn and be productive.

Source: IOL at