You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Unemployment is everyone’s problem – good intentions are not enough

Those tasked with job creation need to up their game, and fast.
Image: Siphiwe Sibeko, Reuters

This week, the South African government released the latest unemployment figures. They’re not unexpected, but they’re harrowing – and damning. At 34.9%, South Africa has the highest official unemployment rate in the world. Add the expanded definition that includes discouraged job seekers and others who are not economically active and it’s a staggering 46.6%.

But percentages allow us to look away unless we realise that this expanded unemployment rate translates to almost 11-million people – people just like us – who have no jobs, are not in training and have no means of providing for themselves, or their families. It’s a catastrophe.

An entire sector has emerged to support the goal of small business development. Everywhere we look, we read about new job creation initiatives, youth development programmes, enterprise and supplier development activities, and joint initiatives by the private sector and government (such as the Youth Employment Service [YES programme]), geared towards encouraging employers to employ jobseekers and making it easier for them to do so.

But somehow, despite billions of rands invested by the private sector and the earnest, if at times clumsy, efforts of the government to reverse the relentless downward trend, we (and here we include ourselves, as business growth specialists) are failing dismally to change the lives of those who need it the most.

The water is not flowing down the hill, and people are dying of thirst.

The truth is, to absorb the almost eight million unemployed jobseekers who make up the 34.9%, we would need to create 22 000 jobs per day for a year. That is the equivalent of starting and launching four businesses the size of Vodacom, every day. For a whole year.

Clearly, we are not even scratching the surface by doing what we have been doing for the last 25 years.

We need a radically different strategy, a new level of bravery, and a nation-first mindset. There are three things we can do immediately to turn this tide:

Radical action 1 – stop ticking boxes

The government has created a well-funded ecosystem of business-support and job-creation organisations, including the Small Enterprise Development Agency, the Small Enterprise Finance Agency, the Industrial Development Corporation, the Department of Trade, Industry and Competition, the Department of Small Business Development, and others. This ecosystem is bolstered by hundreds, if not thousands, of private business-development support organisations of varying size and focus areas.

A common blind spot in the sector is measurement. Inputs are measured – how many people trained, how many business plans drafted, how many logos developed, how many mentorship hours spent, how much money lent, etc. But what really counts is the measurement of meaningful and lasting impact – how many successful, self-sustaining businesses have been created.

In a country desperate for economic growth and jobs, we should be measuring our success solely in terms of growth – did the business grow its turnover and profit, did it stay in business longer because of our support, and how many jobs have been created and sustained?

Clearly, if we need results, we need to invest in and support organisations that know how to build job-creating businesses that last. There can be no prizes for effort when so much is at stake. One can’t feed a family with a business plan.

Radical action 2 – stop being so precious

There is a tendency in the highly competitive business sector for people to play their cards very close to their chest, a culture of jealously guarding intellectual property and being wary of collaboration with other players. In the sphere of job creation, this mentality is small-minded, creates silos and crushes innovation.

We approach other crises collaboratively. Surely it is time to start working together and pooling our respective strengths to create solutions that are national, transformative, and so much bigger than any one of us can deliver on our own. Without such a mindset, we will never make a dent in improving the lives of the ever-growing number of people with no work and no hope for a better future.

Radical action 3 – soften the blow

Finally, we need to face the difficult truth, which is that in our lifetime we will never create all the jobs we need to meet our growing population needs. Despite passionate effort, we only created eight million jobs since 1994 and we don’t have the luxury of another 25 years to create the next eight million.

Given this harsh reality, we clearly need a mitigating strategy – a holding pattern of sorts – that focuses on improving the lives of the unemployed now, while we chip away at the structural issues hampering our economic growth.

We need a radical increase in the available funding and support of social enterprises and not-for-profit businesses that meet the gaps where the government lacks the resources or the manpower to provide these services.

We need support for organisations that provide access to healthcare, decent education, proper sports and recreation facilities, social services for the aged and vulnerable – the list goes on.

We need to actively support the ecosystem that is motivated and skilled at creating solutions to care for those without means.

There are only two choices. We can ignore the need for change, or embrace it with brazen courage.  It’s time to admit our collective strategies have failed and to have the courage to embrace new and radical ways of solving unemployment. It’s time to genuinely serve the needs of the millions of our population that have been marginalised for far too long.

Let’s discard what is not delivering, and radically change our approach. Let’s work together and deliver meaningful change. Good intentions are not enough.

Catherine Wijnberg is chief executive and Anton Ressel is a senior consultant at Fetola

VIDEOS

COMMENTS   9

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

“Despite passionate effort, we only created eight million jobs since 1994”

I am sure this depends on the point of view of the interpreter of the efforts.

My interpretation is that the only passionate endeavor of the time period was for the new ruling cabal to steal as much as possible and to enrich only themselves and cadres.

The othet thing the ANC has done quite successfully is to put up so many barriers to investment and employment in this country that it is a wonder that any business still exist.

The message is we are open for business and investment.
Only give us ownership 30% of your company and we will tell you who you may have on your board and from which suppliers you can buy.
Oh yes and you cannot employ white people or fire anyone !!

The social instability barometer and the unemployment rate is one and the same indicator. The unemployment rate is merely a barometer for the impact of socialist redistributive policies. We have the most socialist government on earth, with the most damaging redistributive agenda. Therefore, we have the highest unemployment levels on earth. The unemployment rate simply shows the extent to which the government infringes on property rights.

At some stage, the unemployed masses will overthrow the government, they just need a spark. Like with the Arab Spring, that spark will be rising food prices. The price of wheat has risen by 25% and the price of sunflower seeds doubled over the last 18 months. The social grant did not rise to the same extent. The unemployment rate has not reached its top yet. Something has to give. The Zuma riots were merely a trial run for what lies ahead.

The economic policies of the ANC government are the main drivers of the unemployment catastrophe. It is clear that those who are fortunate to have a job, occupy a privileged position, reserved only for the elite. The Tripartite Alliance with the labour laws that enabled unions to ambush employers with militant and extortive wage demands, created a huge barrier to entry into the jobs market. Luthuli House is the African version of the Bastille, a few months before the French Revolution.

Most job seekers, even those with university degrees, cannot clear the hurdles that the Tripartite Alliance has put across their way in the jobs market.

It is not the task of the private sector to create jobs. The profit motive incentivizes entrepreneurs to serve consumers. Only consumer action can create jobs. If consumers fail to send a signal via the profit motive to entrepreneurs, then that entrepreneur won’t employ anybody. The ANC continually smothers the profit motive under layers of taxes.

The ANC destroys the profit margin for entrepreneurs with BEE regulations, local beneficiation requirements, redistributive municipal rates and taxes, exorbitant wage demands, unaffordable and unreliable electricity, lockdown measures, cadre deployment, inefficient and negligent government monopolies, the Mining Charter, the expropriation debate, security of tenure laws, the high income tax regime, CGT, estate duties, the fuel levy, decaying infrastructure, bankrupt municipalities and imploding services, etc.

The socialist and communist mindset of the ANC sees the profit margin, which is the ultimate job creator in any economy, as their enemy. They constantly kill the profit motive with various taxes, regulations, red tape, laws and actions. The ANC redistributive mindset has now successfully redistributed the jobs market.

The ANC kills jobs and the corpses are scattered across the land.

I always wonder about all these unemployment statistics. Lets look at the facts:
1) Millions of our African brothers have crossed the Limpopo river and have found a way to feed themselves and there kids after 1994. So dispite the SA population increasing with millions and those millions somehow finding a way to feed itself the unemployment stats only increase?
2) If all these people are as unemployed as people say they are how do they make it to feed and clothe themselves and reach quite a mature age. Do not tell be they make it on R350-460 per month.
3) Compare South African poverty levels with those in it’s neighboung countries like Mozambique and Zimbabwe and you will find our population is rich….why do you think people are leaving those countries and coming here.

So my view is these statistics have too high a criteria regarding what a job is and is being manipulated this way for an agenda.

You are spot on! The rules and regulations, the criminality and plunder, the taxes and labour laws turn the formal economy into an informal one. It forces entrepreneurs to move into stealth mode, under the radar, to pay no income tax, no minimum wage, no VAT, no municipal rates and taxes, no CGT, no estate duties and no BEE. The ANC itself is destroying the tax base that finances the social grant that enables the growth of the informal economy.

The 5% of the population who pays taxes, carries the rest who live off those taxes. This is like a beehive where 95% of the hive consists of queen bees and 5% are worker bees. This is highly unsustainable, and a certain recipe for extinction.

Flexible labor laws would make a difference but right now the issue is most plans remain plans. I see many people doing site selection studies and feasibility studies but few convert.

Funding is one issue. You can have sharp jockey with good feasibility but he or she has only 10% of the capital needed. The PE and VC people could invest but who wants to slave for 10% ownership. So better earned equity methods are needed other than share options.

Observation : in our industrial park only one tenant with about 8 workers is a branch of a group. The other 12 firms employing 350 people are all owner-managed businesses. All of them new since 2018.

Small businesses are where employment could come from

Sigh, ja nee. Let us not forget morally bankrupt BEE, AA, EWC, business forums, rioting, unreliable electricity and bureaucratic nightmare at every level and turn and maybe funding would not be such a big issue in decision making. I have worked with two international investors. One, a family owned business, BEE was unpalatable, pulled out of SA. Two, a massive multi national has invested, don’t think there is any BEE involved but they are getting shunted from pillar to post with simple regulatory rubbish.

The regulations are mind-blowing

I spent R170k replacing fire safety signs in our complex with signs that have SABS mark. Nothing wrong with the old signs, just that SABS mark. One would never guess how dangerous a sign is that does not have an SABS approval.

Then you get inspectors that tell you that storing non-flammable goods stored in plastic bins must follow the plastic storage height rules. So 5 bins containing 5000 liters of bottled water is, according to this genius, a bigger hazard than the allowed 2 bins containing 2000 liters. Never mind the bins have a flash point four times the temperature at which the overhead sprinklers drop 15 or 20 liters per minute per square meter… In the US you consider the calorific value of the combined goods to guide storage scientifically. If callorific is not known, then you are allowed a percentage of volume and weight in plastic without reclassifying the inflammable goods as the higher haxard category plastic.

Don’t get me started!

SMME’s should be supported and labour laws be reviewed for these enterprises to influence the high unemployment status in South Africa. Then why is the 15 – 24 year old’s part of the unemployment criteria?

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: