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The youth-without-work crisis continues into the new decade

The unemployment epidemic is indefensible.
SA’s unions need to chart a path away from the bounds of alliances to broaden the type of worker they represent, says the author. Image: Naashon Zalk, Bloomberg

It seems the politics of organised labour – Cosatu (Congress of South African Trade Unions) in particular – are focused on the potential effects of the restructuring of state-owned enterprises (SOEs), especially Eskom and South African Airways (SAA).

However, there is a notable yet ignored crisis – the young future workers who cannot find jobs. There is no denying the changing nature of the labour market due to technology, globalisation and shifts in the world economy.

I singled out Cosatu because it is the biggest workers’ federation in the country, but in truth my suggestion is to all organisations within South Africa’s organised labour sphere, especially since it seems they have barred themselves in a cul de sac.

They are preoccupied with topical long-standing national issues that constrict their focus and block them from seeing (a) the urgency of designing trade unions strategies that will lend relevance to their existence in a future economy that is continuously being altered by technology; and (b) the plunge in the labour force participation rate of young South Africans who are of working age in the past year.

I highlight youth without work as an issue because although a good deal of the discussion about unemployment acknowledges the crisis faced by the young (whether without education or graduates), the consequences of high youth unemployment are often overlooked.

Three crucial indicators that move together

This is the case despite the devastating and lasting effects these consequences are likely to have on three crucial economic health indicators that move together – income, output and work.

In the past 10 years, the three have been characterised by disorder.

First, based on Statistics SA household income indicators, the growth in income inequality between different LSM groups has widened further. Furthermore, the labour participation rate in the 40-65 age group has risen along with their income, while younger workers struggle to get a foothold in the workplace – and, when they do, earn less.

Second, the country’s productivity continues to decline for a number of reasons, including the lack of private investment, various instances of policy uncertainty and, according to the International Monetary Fund (IMF), a rigid labour market. In short, potentially, more people would be employed if the national working rate was high and driven by young workers.

Third, the demand side factor of the labour market is characterised by companies that are fitting into what is determined by international trade, global markets and the use of labour, which is dominated by outsourcing and/or temporary work. For South Africa this has created an incongruency, with older, experienced workers being hired more than young graduates. In turn, this reduces the labour force participation rate of young workers, including low-skilled workers, causing work or job opportunities to disappear for the young working-age group.

Fourth, restricted youth labour mobility has powerful implications for the future labour market and societal challenges such as poverty reduction. The impact of technology means jobs and workers are going to be displaced, making it near impossible for those who have never worked to find jobs.

Furthermore, the anomaly of the higher older-worker participation rate in an increasingly young country could trigger urban if not nationwide problems that undermine social cohesion.

Consider, for example, how long-term unemployment and lack of opportunities can incentivise young people to resort to criminal activities as a way of generating income.

Moreover, areas that experience high levels of unemployment are likely to see an increase in poverty and dependency on social grants.

Finally, and this is where organised labour comes in as they reinvent their core function in an age where the future of work is uncertain: unions must first make a case that compels government to have social policies that adjust to the changes and developments in the global economy.

For example, regulation must adapt to technological change through policies that encourage the private sector to invest in cities that have historically driven economic growth.

Unions need to broaden their own mandate

In an age of increasing accountability thanks to the social media culture of seeking answers and calling out wrongs, to remain relevant, unions must subject government to checks and balances and work towards the common benefit of society and not just their members.

In working towards transformative change for workers, unions must view the problems experienced by workers as related to those that affect society, not separate from them.

Income, for example, has a direct influence on household spending and this in turn establishes where a household is located on the national poverty line – workplace issues therefore typically move together with social issues.

Unless Cosatu and other workers’ movements redefine their path, chart a new path of their own away from the bounds of alliances, their approach to the kind of workers they represent will remain narrow and fail to speak for the youth without work.

However, the task cannot fall to unions alone. Business and government, what are you doing?

It is indefensible that the most obvious crisis – the ‘youth without work’ crisis – will carry on into the new decade.

Listen to Nompu Siziba’s May 2019 interview with Mamokgethi Molopyane:
 

 

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All these people are Free.

They have the freedom to do exactly what they want.
If they want to work and earn money the opportunities are there.
Nothing stops them from opening their own business.

BUT – Unfortunately all they aspire to is the handouts !!!!!

Fortunately this is what the majority of them voted for and continue to vote for. Tragic but unfortunately true.
Doing the same thing over and over again and expecting a different outcome is a sure sign of ……………….

These people are also free not to make babies that they can’t feed, and then expect me, the taxpayer, to sort out. I have thought about this a lot; how does somebody else’s irresponsible procreation become my moral responsibility to fund? Time and again the answer is it doesn’t. I cannot be held responsible for those whose behavior is grossly irresponsible, and there is no, repeat no, moral obligation upon me to feed, house or clothe the babies such persons bring into the world.

This can only be called a tragedy. And it has to get worse as the population grows and GDP shrinks-or stays flat. I fear 2020 will be the year of wholesale dismissals as the terribly weak economy will require many businesses to fail or restructure. There is simply no demand in the economy-except for basics. Even tourism was down this year, car sales down, retail very ill, real estate volumes down etc.

Meanwhile the ANC does nothing constructive-SOEs fail, crime spirals, EWC, NHI delusions, judiciary captured, and the latest the finance minister sees increased revenues from dagga

Indeed, the population grows. And in this instance we cannot ask what “the unions, government and business are doing here?”. It’s up to the individual to be responsible and use birth control measures. If they do not, the ever-growing inequality gap increases by their own doing. The problem, which is well explained by the author, is that the solution is expected to come from society viz. unions, government and business. What about the individual? What is he / she doing? Other than wallowing in self pity, or in a culture of entitlement, or exploring opportunities in the world of crime? Socialism is unfortunately well ingrained in our society and that is definitely for the worse.

No Labour Union can create any job anywhere in the world.

Wrong !! They have lots of tea girls and bartenders in their employ !!!

Lol!! but true.

“Thank you Zuma and cohorts” for the past decade’s economic slide.

What we have here is the CONSEQUENCE of your anti-capital, populist stance! And that corruption is a “western concept” in your own words.

Supporters of Zuma, please reach out to these destitute unemployed by informing them that “employment is a western concept”

(…still, unemployment remains tragic. African ‘leadership’ is tragic).

Michael, I have sad news for you. The current ANC regime supported Zuma every step of the way. It is the ANC boet, not Zuma.

Sad, indeed. 🙁 One can even go deeper and say “the collective unintended consequences of the ANC voter”.

The problem starts right at the basic level – useless public schooling. Thanks to the corrupt iron grip that SADTU has on education (incompetent headmasters who bought their positions, textbooks that arrive late, teachers who arrive late if at all and then leave early), the ANC has royally stuffed up the future for millions of Black kids. South Africa spends a shedload of our taxes on ‘Education’ – yet private schools have to do the real thing at a cost. When kids leave school with 30% ‘pass’ marks, barely able to read, write or reason, how are they useful to potential employers? ANC and especially Zuma, you need to hang your head in shame. If you have any.

We have the highest unemployment figures in the world because we do not have a labour market in South Africa. The market cannot “clear”, there are bottlenecks, an oversupply on one side and a scarcity on the other side because there is no market mechanism.

We have Central Planning of the labour market. The Tripartite Alliance decides who works where and at what price. We have price controls for labour. When Mugabe implemented price controls for groceries, the shelves ran empty, leaving the consumers destitute and the producers without a market.

This is exactly what is happening in the labour market in South Africa. Price controls leave the consumers(employees) without labour while the producers(workers) experience an oversupply of labour. The Tripartite Alliance sits in the middle and they pat themselves on the back for the nice level of the “living wage” and for “protecting workers rights”.

The productivity of labour is a function of the wage, work ethics and the experience of the worker. Unskilled workers who have low morale and work ethics can still be wonderfully productive if the wage is low enough. South Africans are hugely unproductive because the Tripartite Alliance forces employees to buy low morale and low skills at a high price. Business does not work like that. This is communism, not a free market.

Let the Tripartite Alliance employ them if they see value at that price. Cosatu members can then employ themselves and pay their own salaries out of their pension funds like they suggested, to remedy Eskom.

We are the most socialist country in the world, that is why we have the highest unemployment figure in the world. That is for countries that have statistics and are not in hyperinflation.

Also, in my view, some elements of big business are complicit in going along with the “bargaining councils” sectoral determinations that are imposed on all businesses in that sector, so eliminating real competition. Not socialism but greed.

But it has happened. Why? Because of the ANC’scorruption and maladministration.

There is another issue in that there is plenty of work, but government’s taxes and administered costs suck the excess spending power out of households and businesses. Government then uses that money wastefully, or spends it on make work projects that exploit the very cheap labour that the private sector is barred from using (EPWP etc).

A good article – that Cosatu and the unions must take on responsibility for society’s wider problems.

Cosatu has failed to speak out and protest about the problems at Eskom and 700 other SOE’s.

The more unplanned children – the more the youth unemployment. The country has created more people than jobs.

Actually Cosatu has spoken out… read yesterday’s article regarding their grandiose plan. Personally, I’d rather they don’t speak at all…. Any viewpoint they come up with will be according to a collectivist mindset thinking no further than their noses.

I once asked my farm foreman why he had 9 children. Was 2 or 3 not enough.

His answer: “The more children I have the richer I am.”

He was perceived a rich man, even though I educated his children for him. 1 Bsc Agric, 2 pharmacists and the rest matric and a variety of work, truck drivers, auto electricians, child minders etc.

In his mind he is rich they all contribute to his retirement.

The point here is they are all employed, not queuing for handouts.

All the Unions care about is getting their hands on a political appointment (access to lucrative benefits) and getting the union fees out of works. That is it, the unions have had zero constructive benefit on SA or it’s workers.

On youth unemployment, you get the leadership you deserve as they say. You look at the KZN uni getting it’s HIV support centre burnt down by rioting students, you look at how many of them voted for the EFF hoping for hand outs etc. That sort of thinking is a vicious cycle unfortunately.

Now I do feel bad for these young people, they have been steered in the wrong direction, they have very few good role models in their communities to look up to and the ANC really does not care in the slightest about anyone really. Now unfortunately it looks like the free ride is slowly coming to an end.

Older workers typically work. They have proven records of dependability.

The youth of SA brings entitlement and nothing else.
Its just not worth the hassle to bother training youth workers sometimes.

Generally I agree with the article but the culture of entitlement shines through:
“younger workers struggle to get a foothold in the workplace – and, when they do, earn less”. Guess what Poppie, I also started there many decades ago. Fact of life worldwide, get over it.

You get what you voted for – yes, we need significantly more jobs but now your guavamund wants to take farms and pensions. When is it going to bleed over into mines, factories and other businesses? And you want me to invest in this dung heap called South Africa?

I read the following truth somewhere: Democracy is the pathetic believe in the collective wisdom of individual ignorance. Given the anc regime, I now clearly understand what this means. In fact, I’m living it out here!

Equality of outcome over equality of opportunity! Gotto love the commies!

well just keep up the BE /AA and govt wanting a piece of the action with no risk and this will continue to worsen.
foreign business is NOT coming to the rescue with all these commie demands .
Production in SA 2019 equaled the same as 1972 – Anc govt is a huge success with it’s politburo policies

End of comments.

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