This article was first published by Bbrief in April / May 2023 issue
The forgotten future
It is said that the youth are the future of any society. This adage seems to have been lost on us in South Africa, because young people in South Africa have a grim present and future. This signals potential calamity for our future society.
South Africa, like many African nations, boasts a large young population. According to Statistics South Africa, youth aged 15-24 number 10 million in South Africa. Only 2.5 million of the 10 million are in the labour force either unemployed or employed. Most of the youth (75%) are not economically active. 37% of those not in the labour force are considered youth not in employment, education, and training (NEET). NEET is a growing category and represents a young population that is highly discouraged.
This is chilling given that under ideal situations the youth should be the most economically active, yet in South Africa they have an unemployment rate that surpasses the national average! In South Africa, mass and chronic unemployment is such a permanent feature that millions of young people have even given up on looking for employment and thus improving their financial position!
Liberty as a philosophy necessitates that one is responsible for the actions they voluntarily take. This means that the unemployment of the youth is not solely on the state. Statistics show how the unemployment rate among young graduates (32.6%) is far lower than the average rate of youth unemployment, which sits at 64% for the same age group.
This means, young people who have an education will be far less likely to be unemployed than those without. Therefore, the absence of attaining educational qualifications in a country like South Africa, where education is publicly funded to the point of Grade 12, is largely no one’s fault but the individuals themselves. Horrible as the government is, the youth seemingly have no interest in bettering themselves, as shown by these statistics.
In South Africa we have the minimum wage, the anti-employment Labour Relations Act, and the highly prescriptive, thus also anti-employment Basic Conditions of Employment Act among many laws; not to mention municipal by-laws and licensing requirements for the operation of businesses and the hiring of staff. The policy environment therefore discourages investment into the economy due to the myriad of red tape and thus compliance costs, businesses will have to deal with whilst operating in South Africa.
The youth represent people who are either still acquiring skills or do not have the same as say a 40-year-old. This means, a young person, all else being equal, will earn less than a 40-year-old. What happens then, when the value provided by the skills of the young person, are below the arbitrary price set by the government for a minimum wage? That young person is unlikely to be hired by businesses as doing so would be by the letter of the law illegal. Young people have been effectively legislated out of the labour market.
Since we have seen that a large percentage of South African youth are not highly educated, this means their skills will likely fetch a lower price in the labour market relative to the skills of professionals for instance. Therefore, should the government keep on increasing the minimum wage, these young people may never be able to get a foot in at the door.
Capital accumulation and wealth building all needs one to start somewhere and build from there. The South African government labour legal environment has effectively barred a large section of the population from even starting the race. Combine the minimum wage with the prescriptive measures of other legislation, then the prospect of hiring a young person who will be hard to fire and probably cost the company more than they make, becomes dimmer as you look closer.
The policy situation will not likely drastically change given the orthodoxy of labour laws among South African political parties. A practical takeaway is for the youth to invest in themselves by upskilling and acquiring those skills which the market desires the most. Living in the age of the internet means that acquiring skills has never been cheaper nor more accessible. Young people in South Africa must endeavour to help themselves because no one else is coming to save them.
Unemployment is mostly caused by government policy with the individual actions of the unemployed, in this case the youth, not being discounted as contributing towards it. In South Africa over half of the future custodians of society are not employed. If the youth represent the future of a society, then the future of South Africa does not look good. Decreasing unemployment must be one of the highest priorities of any government, lest we hasten our march down this road to serfdom.