Youth subsidy – Bringing education into the picture

Educational attainment is vital to addressing youth unemployment, yet remains peripheral to the debate on the youth subsidy.

The debate on youth subsidy has gathered pace. The arguments for a youth subsidy consist of two major arguments.
First, the high rates of unemployment amongst youth are exceedingly worrying. As shown in a previous chart on Zapreneur. The key features of the unemployment data by age, show that:
The key features of the data include that:

  • The biggest proportion of unemployed are concentrated in the age groups 15-24 years (29.5%) and 25-34 years (42.8%).
  • Unemployment for those 34 years old and younger accounts for 72,3% of unemployed South Africans.

Youth unemployment thus is a serious challenge, and perhaps the defining challenge that we face.
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Youth unemployment – a ticking time bomb, or is it already here?

Arguing that the the “ticking time bomb” metaphor may lull us into a sense of complacency with regards to youth unemployment.

“Feel it, it is here!” This slogan somewhat incredulously reminds us that South Africa hosted the 2011 World Cup. A year on, the slogan still resonates in our conversations.
However, another catchphrase, the “ticking time bomb,” has emerged to underscore the strong possibility of a youth uprising in the future.
The recognition that South Africa faces a significant challenge, especially with respect to including young, unemployed, African males in our economy, marks an important acknowledgment of the challenge facing our society. Yet the metaphor of the “ticking time bomb” suggests some distant future for a popular uprising when in fact, appropriating the World Cup slogan, “Feel it, it is here!” would be more appropriate.
The metaphor of a “ticking time bomb” has gained support, as young activists in North Africa and the Middle East have toppled governments in what is called the “Arab Spring.” Moeletsi Mbeki has popularised the idea arguing that South Africa is facing the possibility of greater social upheaval due to high levels of youth unemployment. In fact, according to Statistics South Africa, 72% of the unemployed are between the ages of 15-34 years old.
The COSATU General-Secretary, Zwelinzima Vavi, further elaborated upon this theme at a recent lecture on an “employment guarantee” in South Africa, warning again of the prospect of an uprising, if the challenges facing young people are not addressed quickly.
It is a theme that has routinely featured in COSATU’s documents over the last decade, even if many were not willing to pay heed. Vavi, however, provided an organisers perspective, arguing that Johannesburg is surrounded by a “ring of fire.”
[leftboxlarge element=”div” width=640] Spatially speaking, service delivery protests are concentrated in poorer communities and especially in informal settlements, which are located on the periphery of cities. Plotting protests on a map does give the impression of a ring of fire. The metaphor however suggests something more: that coordinating these service delivery protests is spatially possible and enhanced with technological advancements, such as cell phones. [/leftboxlarge]
On the other end of the ideological spectrum, the Centre for Development and Enterprise produced an important research paper in 2006, which traced the histories of 1000 young people, and later argued that current interventions, by both government and business, are not addressing the problem. Importantly, there is even in the business community, an important and early recognition of the problem, even if the policy options proposed by business are open to debate.
The National Planning Commission adopts a more national perspective and reports in its diagnostic report that if a young person does not get a job by age 24, they are likely never to get a job. The NPC then amplifies this by saying that “about 60 percent of an entire generation could live their lives without ever holding a formal job. This time bomb is the greatest risk to social stability in South Africa.”
The African National Congress Youth League (ANCYL), at its recent congress, agreed to pursue a programme for economic transformation, which it calls the “7 cardinal pillars.” The programme includes nationalisation and expropriation without compensation.
The radical rhetoric emerging from the ANCYL can be understood in the context of a growing recognition that the exclusion of youth is our biggest challenge. Thus far, the ANCYL has provided a radical expression for the views of youth, but as several political commentators argue, they play another useful function: that of containing anger.
However, there is a disconnect between protesting communities and the African National Congress — leadership of young, unemployed youth will have to be constructed on the ground, rather than be proclaimed from Congress podiums.
The space for more ambitious programmes of transformation has thus been improved with the growing consensus that we face an uncertain future if youth unemployment remains at current levels. This is an encouraging development, as changes are clearly needed to address the problem of youth unemployment. In answering this policy question, there are two important policy directions that must be emphasised.
First, that the challenge is not simply about tweaking incentives, but rather that providing work to the current generation of unemployed youth will require wider interventions.
One possibility is to scale-up the Community Works Programme (CWP), which provides community based work opportunities with regular transfers of income by government. Other possibilities exist in the areas of increasing public service employment, or in undertaking a mass-retraining programme.
The exactness of the policy package has however been debated for the last decade with government and its social partners failing dismally to lend coherence to the problem. In important senses, the spadework for a wider intervention has been completed, but the leaders in our society have failed to create consensus and allocate resources to a programme to tackle the challenges.
Importantly, the disconnect between leaders and disillusioned youth was a precursor not only to the Arab spring, but in South Africa’s liberation struggle too.
Second, policy must not only address the fears of the middle and upper classes, but far more importantly, express the hopes of young unemployed people.
Current proposals in public policy propose social safety nets, gaining initial work experience in the public sector and even a subsidy to enter the workforce. These are important policy proposals that need to be quickly decided upon as a class of policies, which could be called “social stabilizers.”
However, in building the South African dream, transforming the economy will need to consider the importance of creating an entity that provides a fair chance for anyone to participate in it and attain their dreams. The idealism in such an approach requires dealing with the hard features of our economy, which in its current form has a default position that supports larger firms and current incumbents.
Certainly, structural changes to the economy will take time, but even the most ambitious programme of social stabilisation will only attain sustainable results as part of a broader programme of economic restructuring.
South Africa is thus at a crucial point where the social conditions for a stronger push towards addressing inequality – because of the reality of exclusion – are becoming more apparent to those who are part of the economy.
However, the metaphor of a “ticking time bomb” may lull us into a false sense of security. Look around, listen and you might just recognise that an uprising is not a distant reality. Current protest action may be small and uncoordinated, but it is happening – “Feel it, it is here!”
This article first appeared on SACSIS.

Youth unemployment as a poverty trap

Presentation on youth unemployment to the Economic Development Conference.

Youth subsidy
KwaZulu-Natal Midlands: Ceramic painters Zama Nqubuku (foreground) and Wiseman Ndlovu at work in the Ardmore Ceramics studio. Photo: Hannelie Coetzee

This presentation provides a conceptual argument that high levels of youth unemployment are a manifestation of a deeper poverty trap in South Africa. Argues that the expansion of social security, community works and building assets are potentially viable responses that must be included in a discussion on youth unemployment. Importantly, there are young unemployed people who simply lack information, or are holding out for a better paying job. However, the majority of young unemployed South Africans have little or no prospect of finding work. Providing regular income and work to these unemployed young people requires that as a society we create mechanisms for economic inclusion.
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Three things the National Planning Commission should be doing

Proposes a way to make the National Planning Commission work more open and transparent.

The National Plan – it holds almost a mythical status in our discourse about our future, and has a multiplicity of meaning. These meanings are layered with deep ideological, class, race, gender and many other chasms that are the South African reality. The idea that closes this chasm is that with a national plan, we will find common ground to face the deep and structural reasons that make us a country with staggeringly high rates of unemployment and inequality. We are placing our future hopes on a national plan, that the National Planning Commission (NPC)has been tasked to develop. In placing such a huge burden on the commission, the quietness of the NPC to outline a process towards meeting this goal is disappointing.
It is also understandable in that the NPC is doing something that we have not done before. The task is after all formidable one to both:

  • unite society behind a programme,
  • and at the same time  develop a deliberate strategy to overcome the structural nature of unemployment, inequality and low economic growth.

With such an important task, the NPC has however failed to mobilise it’s most important resource – the people of South Africa. The process currently fails to galvanise the energy of citizens to begin developing inputs and to organise and mobilise behind their perspectives. The process of developing the “vision statement” must be consultative at the outset, and not a product of process involving just the commissioners and experts. Importantly, I do not think that the NPC would disagree with the core principle of participation. What is at issue is whether public involvement happens sooner or later. I argue it should happen immediately.

What the NPC should be doing?

What then should the NPC be doing? The NPC should be immediately doing three things.

  1. Involve people immediately. This would require setting up systems for citizens to contribute to the NPC in a meaningful way, and in the organisational forms of their choosing. This deepens democracy and advances our intrinsic values of a “people’s democracy”. At an instrumental level, it creates a legitimate and open process. As we know from our history, people participating in the process become the strongest advocates of ideas that they have helped shaped.
  2. The NPC must listen. For some the NPC are like sages that will deliver answers. This is not the role of the NPC. Instead, it must search for the answers in society. Fortunately, there is an abundance of ideas in our society. Yet, the question remains whether we are providing a platform for the idea creators to share their solutions and contribute to the national plan. Importantly, this process requires openness and transparency to catalyse innovative thinking and effective implementation. This brings the advantage of multiplying ideas, and after that weeding out the bad ideas, and seeding the good ones. Importantly, this process creates the prospects for shaking the proverbial hegemony of ideas in our society, by unleashing the talents of South Africans outside of the current organisations that dominate our discourse.
  3. The NPC must release early and release often, to use a term from software development. I doubt that anyone has a view that the national plan is an event where  the President  simply announces it. Instead, everyone agrees it is a process. The real question is around what that process should be. I would argue that the NPC should be presenting a set of options on an important issue, and asking for advice, criticism and calling for alternatives. To do this, it must release documents often and early, so that it involves people, builds trust and field-tests ideas and their programmatic elements.

Too some a democratic process for the National Plan is a non-starter, given the deep divides in our society. However, the process itself could provide for a deepening of democracy, an assessment of ideas, and a bridge across our traditional divides. Obviously, government must take decisions at the end of the day, and ensure implementation. The way it develops policy however is important to building support around a vision for our country. More to the point, through assessing all the options it helps in choosing policy options that will challenge the underlying power relations that underpin inequality and unemployment.Ultimately, are we as a society comfortable with handing over our futures, without participating in it? The overwhelming answer is that not only are we uncomfortable with such a state of affairs, as a society we would welcome and cherish the opportunity to shape our collective future.

Zuma's Inadequate and Incomplete Jobs Package

Argues that Jacob Zuma jobs proposals are a useful starting point, but remain inadequate and incomplete given the high levels of unemployment in South Africa.

The expanded definition of unemployment is  35,8% according to Quarterly Labour Force Survey (4th Quarter, 2010). It helps to say that a little more slowly, due to the gravity of the statistic. 3,5 out of every 10 economically active people are unemployed. Dig a little deeper, and the number of people is 7,3 million. President Jacob Zuma and South Africa’s citizens recognise it as national crises.  In this context, everyone wildly cheers as President Jacob Zuma expresses our hopes of higher unemployment in declaring 2011, the year of the job. This sense of crises however may leave us praising anything that supports job creation. Instead, as argued in this article, the Jobs Package is a useful start, but ultimately inadequate and incomplete.

Will more factories be created? Cape Town, Western Cape province: Factory floor of Hip Hop, a successful fashion label in the city centre. Photo: Rodger Bosch Read more:

Before explaining what is meant by inadequate and incomplete, it helps to reflect on possible criticism to this article. Those asking us to line up behind the Jobs Package, will remind us that:

  • You have to start somewhere
  • The state’s ambition must be matched with it’s capacity
  • President Zuma is placing small business on the agenda

Each of these arguments are valid, and provide a mixture of common sense and place emphasise on “getting behind the programme”. There is however an uncomfortable truth, when measured against the scale of the problem the Jobs Package is miniscule for three related reasons.
Acknowledgement: Photo courtesy of Media Club South Africa.

  1. Biased to the formal sector. Based on research by the Department of Trade and Industry [PDF Link],  one can extrapolate that the majority of business owners are black, but overwhelmingly in the informal sector.  The dominance of black business in the informal sector is potentially the strategic entry point to broadening black participation in the economy. The Presidential Jobs Programme however does not address this reality. After all, to access the majority of the programmes a company needs to be registered. The only reference to informal business are proposals related to the merging of Khula, the SA Micro-Finance Apex Fund and the IDC’s small business funding into a single unit.
  2. Links between economic and social policy are weak, especially for the young and unemployed. President Jacob Zuma argues that “insert quote on developmental state”. Evaluations of social grants show increases in the job search activity and attendance at schools. The links that currently exist would however be amplified if there was a social security system that provided support to the never employed.
  3. Incremental programmes will result in incremental results. The programmes outlined by the President are important in themselves as experiments in public policy interventions. However, the programmes do not support rapid changes to the structure of the economy. They are too small to have the desired long-term impact. As a society, we must be finding ways of running experiments at scale more quickly.

The silver lining is that President Jacob Zuma has emphasised the small business sector. This policy stance is a significant political commitment. It could be the start of what the ex-Brazilian Planning Minister Roberto Mangeibera Unger has called in an interview the “decentralised alliance between government and the little guy”.
Taken together, what we are calling the Jobs Package is inadequate and incomplete. We could dodge the question by calling it a useful start, but we will not do that. In the current conjuncture, government can do more, and we can do more as citizens. Zapreneur will hopefully be one platform amongst a multitude of platforms that helps us to see the way. Zapreneur succeeds not because it will provide the best analysis of South Africa, but because we contribute to changing South Africa.
Join us as we move from criticism to creating public policy alternatives.