An affordable, scalable and simple solution to South Africa’s unemployment challenge

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South Africa is at the precipice of what can best be described as an unemployment crisis. The country’s latest official unemployment rate is a staggering 27,7%. Deep diving into StatsSA’s unemployment data highlights that our youth, which represents the future of our country, are affected the most. More specifically, between 2003 up until 2015, the youth unemployment rate, which refers to the share of the labor force aged 15-24 without work but available for and seeking employment, averaged a staggering 50%. Put another way, on average, one in every 2 young South Africans remained unemployed throughout the aforementioned observed period. This trend can be seen in the graph below.

Figure 1.

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This is a crisis that needs to be addressed. The reason for this is that having a job goes beyond earning an income. In fact, a job allows an individual to attain independence, structure their days and generate a sense of purpose and belonging that are necessary to ensure the future of the society with which they belong. Long-term unemployment upends these important social benefits to the detriment of the long-term prospects of an economy. Deep diving even further into this data highlights two pertinent points. Firstly, our youth unemployment challenge is largely structural. More specifically, a young South African’s ability to obtain employment is highly correlated with their respective level of education (See figure 2 below).

Figure 2.

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The reasons for this are multifaceted. One clear explanation is that since the democratic dispensation in 1994, the economy has shifted towards the tertiary and services sector, which contributes approximately 68% of the country’s gross domestic product (GDP). Therefore, the economy is increasingly demanding a highly skilled workforce to the detriment of those without access to this education. Secondly, large race disparities are still present within the unemployment figures. According to StatSA, black youth are, however, still more likely to be unemployed than their white counterparts. In 2015 for example, the black young graduate unemployment was about 9% compared to 3% for young white graduates. Unfortunately this statistic shows that 23 years on, access to educational and employment opportunities for black students remain scant relative to other South Africans.

For educated and resourceful young South African leaders that have greater ambitions for our beautiful country, we should unite in assisting the powers that be in finding sustainable solutions to the aforementioned quagmire. Given this and summarizing the arguments and data so far, it is imperative for our solutions to take into account the need for solving the biggest issues. That is, we need to focus on providing employment to young black youth who have the potential but lack access to adequate tertiary education opportunities. A final consideration is for the solution to be affordable, simple and scalable.

One solution is the creation of a vocational training scholarship

One solution that some young leaders and I have implemented is through the creation of a scholarship that is aimed at funding vocational training (eg electricians, mechanics and plumbers etc.). The advantages of such a scholarship are as follows:

  • Assists in the development of young people with critical skills necessary for South Africa’s service intensive economy.
  • Vocational qualifications needed to be effective in the field take approximately a year and 3 months versus a degree which takes 3-4 years.
  • Vocational sponsorships are in scant supply.
  • A typical qualification (N2-N6 certificate) at a TVET college is approximately R1593 per trimester. Essentally, such a scholarship is cheaper and easier to start. This implies that one scholarship can and will help more young South Africans over time as the cost of 4 vocational scholarships in total= 1 year at university.
  • Funders can use their social capital to assist in providing access to the job market for access to apprenticeships.

It is clear from the aforementioned advantages of such a solution is that it is highly possible to do. Moreover, you are assisting in solving the problem of youth unemployment, skills shortages and racial disparities within our country without the help of the government. All you need is approximately 8 friends contributing R60 a month for a year and you can change somebodies life. What are you waiting for?

PS. If you are interested in creating something similar, feel free to reach out.

About the Author

Carlos Baeta
Proudly South African. Masters student at Fordham University in New York. Entrepreneur, young leader, coffee addict and an avid Liverpool fan. Let's change the world.

1 Comment on "An affordable, scalable and simple solution to South Africa’s unemployment challenge"

  1. Great idea, and well written 😉

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