Time to think differently about jobs

11 June 2017 - 02:00 By Andile Khumalo

The economic gods deserted all their subjects this week when the announcement came that, against most pundits' expectations, the South African economy had shrunk by 0.7% in the first quarter of 2017.This not only placed us in a technical recession, it also completed my personal tick list of all key indicators of a healthy economy.Everything that could go wrong has gone wrong, all at the wrong time. We have arrived at the "winter of our discontent", and few have said it better than Pali Lehohla, the statistician-general, when he released the very depressing latest employment numbers."When you look at our crime statistics, they tell you that out of the 800,000 instances of criminal activity estimated to occur in South Africa, 400,000 cases are reported. Out of the reported cases, 70,000 are prosecuted and total convictions come in at 20,000. So only 2% of criminals pay for their crimes. If this was a casino and one had to consider odds, [one] would not go to school and instead be a criminal, with a 98% chance of not being convicted." Lehohla was trying to highlight the obviously desperate situation of extremely high youth unemployment that can be linked to poor education outcomes.We are now at the highest level of unemployment since 2009 with eight million unemployed people when you add those who have given up seeking employment.The importance of a well-functioning education system is highlighted by the fact that the majority of the unemployed do not have a post-matric qualification. In fact, 33% of the unemployed have only a matric certificate in their possession. Graduates, on the other hand, have only a 7% unemployment rate.StatsSA has a question in its survey that asks respondents to express their views on education. According to Lehohla, among the youth, most boys say they don't see the point of education and most girls say they'd rather cater for their family responsibilities than attend school. Apparently, this outcome is consistent in every survey, clearly proving that our youth, the very people receiving the education, do not trust or value it.The ability to access higher education is intrinsically linked to improved job prospects. The problem is that far too few students get access to higher education, and many of those who do, end up with skills that are not matched to the opportunities available.Forty-one years ago this month, the youth of Soweto put their lives on the line for the pursuit of a better education system. It is the tragedy of our time that the education system we have condemns so many to a life of economic exclusion, mostly through no fault of their own.The inconvenient truth is that our economy is simply unable to create the number of job opportunities required to absorb the masses of unemployed youth. On the other hand, the trend in capital allocation has been biased towards tertiary capabilities, which, of course, require greater technical and professional skills.In a recession, the situation will undoubtedly get worse. By their nature, recessions tend to result in a decline in labour absorption. Add to that the consequences of a subinvestment-grade rating and you end up with a slow economy with rising borrowing costs for both the private and public sectors.The consequence could easily be a swelling number of graduates who find that either their skills do not match the jobs available or, worse still, they have the qualifications but employers cannot afford to hire them - both disastrous situations.For a variety of structural and political reasons, various attempts to curb this problem have failed dismally. It is perhaps time to think differently about the problem.Soon after the end of World War 2 in 1945, in response to the dead economy, the US enshrined into law the idea of full employment. In that case, an unemployment rate of 5% was regarded as a fundamental requirement. This was enabled through the Employment Act of 1946 and reinforced in 1978 through the Humphrey-Hawkins Act.According to the New York Times, this policy of absorbing as many people into the workforce as possible brought together the divergent ideologies of political parties, labour unions and advocates of social and racial justice. Naturally, wages per capita were slightly lower, but more people were working. It led to a decline in US inequality.This was a desperate measure in a desperate time. We are in a desperate time when our youth are choosing crime over education and work. Hopefully, it's not too late for the desperate measures.Khumalo is chief operating officer of MSG Afrika and presents "Power Business" on Power98.7 at 6pm, Monday to Thursday..

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