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The great educational hope crusher

We’re more educated than ever before, and more unemployed.
‘A target of 1.6m university students by 2030 is great politics but not clever. The more graduates SA gets, my bet is the more cleaners with degrees we will get. The numbers do not lie.’ Image: Shutterstock

South Africa has made great strides in the education of its citizens. While the adult population has increased by about 70% since 1995, the number of adults with a matric has increased by 203%.

Those who have completed at least three years of tertiary education with a degree or diploma increased from 4.1 million adults in 1995 to 12.5 million in 2020. Tertiary graduates now make up 12.9% of the adult population instead of just over 8%.

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The proportion of those who complete high school increased from 18% to 32% of the adult population. Most young people entering the labour force now have at least completed high school or the equivalent, for example a National Technical Certificate (N3) or Adult Basic Education and Training (ABET) certificate.

I honestly believe that an education is a passport to an income, either via working for an employer or by being able to look after oneself as an entrepreneur/self-employment.

Our education outcomes have surprised many: the average duration of schooling has improved from 6.5 years in 1990 on average to 10.2 years in 2019.

Almost 90% of those leaving school have spent 10 years in education.

In the last five years it is reported that about 60% of those entering the workforce have completed high school (or the equivalent), while 29% report completing more than just high school. Only 11% report not completing high school.

But here comes the paradox …

The official unemployment rate increased to 34.4% this year, while in 1995 with a population with less education, South Africa’s unemployment rate was less than half that, at 15%!

While more younger adults obtain high school certificates than ever before the official unemployment rate for those adults below 25 years is 52%, while the expanded rate is 73.4%.

The unemployment rate for graduates has doubled from 5.4% to 11%.

Sadly, on the extended definition the graduate unemployment rate was 22% in the last quarter.

The unemployment rate of those with a matric certificate has increased to 36.6% officially, while the extended rate is 45.6%. Both are higher than the respective overall rates. See the graph of the official rates below.

 

Source: Economists.co.za, Stats SA

In fact, from 2008 Q1 to 2021 Q2 the increase in the number of unemployed matric graduates was 129% and unemployed tertiary graduates 237% – far outstripping the growth in their respective categories employed.

The good news for graduates is that they have a 66% chance of being employed, which I guess in the SA context is not bad, but lower than the 80% employment ratio in 2008.

Completing matric only gives you a 40% chance of being employed, down from a 55% chance in 2008.

Source: UN Human Development Index, Stats SA

Yes, the lower the qualification the less likely one is to be employed. But that does not mean that getting a qualification gives one a more than even chance to work.

Since 2017 the number of people who completed matric who are working has been less than those not working. At present the number of those not working but who have completed high school is 60% and those working is 40%.

Sixty percent of all those who complete high school do not work.

Sure, some are still studying further and other choose not to work, but with the massive investment in education [annually from government] to have 40% working is not a great return.

Our investment in education is not working

If, after a successful 12 years of schooling, the chances of employment are just 40% then the investment is not paying off.

It is a huge investment of time and money, but it is not resulting in being able to escape poverty which seems to be the case in much of the world.

It is the reason humans get an education – the ability to provide for themselves. But this is not the case in South Africa.

For graduates a 66% return may sounds far better but even this rate is not delivering for the country. In 2008 the chances of someone with tertiary education working was 79.1%, so that indicates that many recent graduates are not getting employed.

Remember too that SA spends a lot more than 90% of other countries on education as a share of its GDP – and can least afford bad returns on the money invested here. See the table below:

The 20 countries with the highest share of GDP spent by government on education

Ranked on share of GDP Country % of GDP on government education
1 Cuba 12,8
2 Namibia 9,4
3 Sierra Leone 9,3
4 Denmark 7,8
5 Norway 7,6
6 Sweden 7,6
7 Lesotho 7,4
8 Tunisia 7,3
9 Suriname 7,2
10 Botswana 6,9
11 South Africa 6,8
12 Timor-Leste 6,8
13 Costa Rica 6,7
14 Kuwait 6,6
15 Belgium 6,4
16 Finland 6,3
17 Mozambique 6,2
18 Israel 6,2
19 Moldova 6,1
20 Algeria 6,1

Source: World Bank (only countries with at least 500 000 people were ranked)

Source: Economists.co.za, World Bank

Why do so few people find work once they have finished high school?

Moreover, this is going to get worse for those with higher skills as government employs nearly half of all graduates. Government however has not increased employee numbers [recently] and will not be able to for the best part of the decade ahead.

Employment is one thing, but it is quality employment that the highest educated young people expect.

Yet graduates are often employed in call centres or as bank clerks and even cleaners. Most of us have met the car guard with a degree or diploma. The same applies for Uber drivers and delivery drivers.

When you invest 15 years in an education and end up driving or cleaning – is that not a poor return on the time spent and the sacrifices made?

Parents talk boldly about the graduate and families expect much, only for the reality of the economy to mete out a deadly blow.

Certainly, graduates are trying – but the economy and expectations are not aligned at all. I know this. I get the unsolicited CVs in my inbox by the dozen. At the start of a year businesses tell me they get hundreds or thousands.

The same applies for those who finished high school or some form of technical training. In my neighbourhood the person who works a large copier and printer has an engineering diploma. I bet he had higher hopes than photocopying endless amounts of legal documents.

How did SA get here?

How did we get to the point where our young study hard and our taxpayers fund education, just to stay depressed at home or guarding cars on the street?

It is not just the economy that gives SA the worst unemployment rates.

The trend in education is up but the chances of being employed at the various education levels has decreased.

Well firstly, the growth in the economy is poor. Business and consumer confidence is low, but that is certainly not all.

SA has big slogans, not sensible policy. And business feels the ideological heat of government.

To the left of government are even worse enemies of growth and employment. They get lots of print hectares and lots of airtime.

Our education departments have let the young down

But a large part of the blame is to be laid at the door of the Department of Education and the Department of Higher Education.

Small, medium and micro-sized enterprises (SMMEs) have told me that expectations of a R15 000 a month starting salary are similar to what the owner of the small business is paying themself.

But these are not the biggest gripes at all. More than a few business leaders have spoken in private about the poor quality of recent school leavers and graduates. Many HR people mention this too. I have been to conferences where this was mentioned (usually softly).

The universities have said in the press that they have to upskill school leavers to get them ready for university. So universities currently blame the school system for poor quality school leavers.

Even worse, university council members, deans and ordinary lecturers have all confided that they are now a graduate machine.

Few would want this repeated in public, but a dozen or so lecturers have told me that a 60% mark today is not worth a 40% mark of about 15 to 20 years ago.

(After an earlier version of this article appeared a number of senior civil servants and a university leader more than confirmed this.)

Yes, there are certainly differences between universities and even schools, but in general this is the information across the board.

Sadly, the main union in school education is also part of the problem, so much so that senior politicians and administrators have said as much.

Our universities aren’t exactly shining beacons either …

At university level some study areas are clearly still very good, such as accounting and medicine, but in general the word on the street is do not take in general graduates in employment.

But even in these fields of study in which professions have a say over quality, problems are showing up. Record numbers of medical malpractice judgments have been reported by government.

From press reports some of our world class accountants are also world class crooks, and have learnt to siphon money off the companies or shareholders.

If we want to give our kids a future, we must do some homework ourselves and make many serious adjustments.

First, increase the quality of teachers and start education earlier.

Pass fewer learners/students, and make subjects more relevant to the world of work or expect more hunger and poverty and far higher inequality. Teach the ability to work for yourself and to see gaps. Teach thinking and doing.

Less output (fewer graduates), higher levels of quality, and more places of learning from which the individual can leave with something of value.

We must also stop this funding for all and rather focus on funding the good and the great.

The weak and middle are a poor-quality investment, and the returns are negative for the country. Spend more time on those who will make a difference and teach them for longer if need be.

They will add more returns than we can now dream of: for the economy, for health, for justice.

It is better to have high quality educated adults rather than big targets. A target of 1.6 million young people to attend university by 2030 is great politics but not clever.

The economy does not need them. It will disappoint them, and ministers and universities will become the target.

What we have here is an equality of education outcome followed by a poor employment outcome.

The more graduates SA gets, my bet is the more cleaners with degrees we will get.

The numbers do not lie. It is sad that this was not foreseen.

Sadder still is that our universities do not say anything officially.

Even sadder is that they preach social justice but when their young graduates leave with hope that gets crushed in a call centre selling funeral insurance, they say nothing.

In fact, I learned they still count that graduate as having a job and employed. They know they are producing weak graduates whose hope is destroyed after even more years of sacrifice and studying.

Yet these universities will say nothing and continue to talk about social justice when they are helping to cause the opposite of economic justice.

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Many valid points. The measure of % of GDP spend on education is simply reflective of higher salaries, not necessarily more output. The higher number of graduates is also rather the result of lower standards.

Highly educated people take these numbers and create charts and derive statistics but the layman’s reality is simple. Corporate South Africa can only absorb x number of starters (school leavers, university leavers etc).

There are a fixed number of jobs and an increasing number of educated youth (we can debate how poorly educated they are later) the only solution is to grow the number of vacancies.

The problem is we look to the corporates to grow the vacancies but corporate SA has very little encouragement to embark on local expansion and investment (Eskom only being one small problem).

We fail continuously to create an environment for growth in corporate South Africa. Why would anyone invest in a country where there is a good chance you will have half of your company allocated to a certain group who contributed nothing to the investment.

One would think that the answer should be in entrepreneurship and small business except our youth have little exposure to these concepts and skills under the current learning curriculum. Not everyone can however become an entrepreneur and our track record of handouts, entitlement, politicking etc is decaying the will and motivation to strive for betterment.

The inconvenient truths.

On local radio an entrepreneur expressed his long slog of 16 years to become self-sufficient and at 36 years old, is now struggling to find staff that will stay and work. They come to interviews, are mentored even given advances on salaries for transport and then they just don’t come back. Entitlement?

The takeaway from Mr Schüssler’s excellent research seems to be that education standards are falling simply to achieve the end result of (false) enhanced statistics, while in reality, the system is simply producing more of the same unemployable school and university leavers who are baffled as to why they cannot become the television success stories they get fed in the advertising media.

This is the present, but what will be the future of a state with 60% unemployable youth, with no increasing state benefits and a vast gap between them and the 5% who are successful, for whatever reason?

History informs us that the usual scenario is social mayhem in crime, an increase in drug use and trafficking, urban decay and when politically motivated by those with their own nihilistic agenda, revolution.

Fasten your seat belts.

Beachcomber, 100%, can see your last paragraph playing out already so clearly. A harrowing thought for the future!

ANC socialist policies lead to the decivilization of society, reverse the specialization of labour, destroy the entrepreneurial experience and create unemployment and poverty. This process sets the Malthusian Trap, which brings equilibrium between the size of the economy and the size of the population. Under an ANC government, the South African economy cannot carry the population size that was allowed to grow under the previous capitalist structure.

Famine, nature’s default problem solver, will bring equilibrium at some stage as it does in all collectivist societies.

“Anything that guarantees the private ownership of what each person creates and contributes to the production process, that defends the peaceful possession of what each person conceives or discovers, and that facilitates (or does not impede) voluntary exchanges (which are always mutually satisfactory in the sense that they mean an improvement for each party) generates prosperity, increases the population, and furthers the quantitative and qualitative advancement of civilization. Likewise, any attack on the peaceful possession of goods and on the property rights that pertain to them, any coercive manipulation of the free process of voluntary exchange, in short, any state intervention in a free market economy always brings about undesired effects, stifles individual initiative, corrupts moral and responsible behavior habits, makes the masses childish and irresponsible, hastens the decline of the social fabric, consumes accumulated wealth, and blocks the expansion of human population and the advancement of civilization, while everywhere increasing poverty.” – Prof. Jesús Huerta de Soto

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