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Making a dent in SA’s unemployment crisis

The job creation initiative has created more than 3 000 work opportunities since its start nearly five months ago.

Although the start of the Youth Employment Service (YES) hit a snag due to the government’s chronic delays in legislating the job creation initiative, it has created 3 360 work opportunities for young people in its nearly five months of operation. 

This figure was unveiled by YES CEO Tashmia Ismail-Saville, who adds that nearly 400 companies committed to creating 11 446 new jobs during this period. But some black youth, between the ages 18 and 35, are yet to be placed in those jobs. 

“These 11 446 new jobs are actual commitments,” she tells Moneyweb. “The recruitment and placement of people in actual jobs takes a bit longer.”

YES, the business and government initiative launched in March 2018 by President Cyril Ramaphosa shortly after his inauguration, is part of his broader ambition to create one million work opportunities for the youth in three years, or 330 000 jobs a year.

Incentives for supporters

Companies that support YES by employing young black people for at least 12 months are awarded broad-based black economic empowerment (B-BBEE) incentives including being moved up two levels on their B-BBEE scorecards and certificates. Employed youths must be paid at least the national minimum wage of R3 500 a month or R20 per hour. 

Taking into account the more than 11 000 new jobs created since YES began operating in November 2018, Ismail-Saville says the initiative is creating an average of 670 work opportunities per week for young people who have never had an income and work experience.

YES is beginning to yield results at a time when the government has lost the credibility to deal with an unprecedented unemployment crisis, with 6.1 million people out of a job, according to the latest figures from Statistics SA. The unemployment rate among individuals younger than 25, using the expanded definition, is 67.6%. In other words, nearly seven out of 10 young people in SA are unemployed.

Red tape

Like earlier job creation initiatives, YES buckled under the weight of government bureaucracy. Its launch was delayed and almost scuppered by the department of trade and industry’s (dti) failure to quickly gazette B-BBEE codes for YES into law. To launch YES, B-BBEE Codes had to be amended to make provision for their incorporation into the broader B-BBEE Codes of Good Practice. The dti only signed B-BBEE codes for YES in October 2018 – seven months after the initiative’s launch.

The dti also introduced and later scrapped policy provisions that would require companies supporting YES to invest 2.5% of their payroll in bursaries for black students at higher education institutions before they can qualify for BEE points – placing an unreasonable financial burden on companies.

Slow economy

YES faces another challenge: convincing businesses to employ more young black people at a time when South Africa’s struggling economy is impacting their profitability and growth.

The economy, which grew by a paltry 0.8% in 2018 and is expected to see  growth of 1.9% in 2019, isn’t growing at a substantial enough pace to make a dent in the country’s unemployment crisis.

Economists and researchers argue that economic growth of more than 5% is required for job creation.

The slow pace of economic growth might undermine YES’s target of placing at least 100 000 people in jobs annually. Ismail-Saville is mindful of this challenge.

“Any negative economic climate, or business confidence that is low, makes it more challenging to create jobs and get young people to enter the economy,” she says. All the more reason YES needs to happen, she adds.

Ismail-Saville is not obsessed with numbers and targets. For her, it’s about giving black youth – even if it’s just one person – exposure to a job market that structurally blocks people from being employed due to onerous requirements such as work experience and qualifications.

“Some people are born with privilege in a country where most people start out with very little opportunity and choice to improve their lives,” she says.

“If YES is able to deliver some form of opportunity and choice for young people, then I would have a deep sense of personal satisfaction. That’s the country I want to live in; a country that doesn’t neglect people, a country where people who are privileged are working together to redress inequality and unfairness.”

Listen: Youth unemployment: The hunt for lasting jobs continues 

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What the He** is a “work opportunity?” and only 3,000 of them? And you are bragging??? The ANC has selectively dumbed down education and closed tooooo many trade schools. NOW someone is trying to brag?? I didn’t know telling the future was an accurate portrayal of the economic dysfunction that is this country? 11,000 (alleged) opportunities and 6,000,000 unemployed, seems like a drop in the bucket.Reality HURTS

Did you notice the ‘onerous requirements such as work experience and qualifications’? Really? That there is what is wrong with all of the governmental exercises so far. They just ignore reality, sidelining bothersome inconveniences such as education, merit and experience.

If the population was stable the number of new entries to the job market would be the same as the number leaving it due to retirement or death. The population is growing around 1% a year, this means that half a million more people enter into the job market than it can absorb without growth in job opportunities. 3000 job opportunities (not jobs!) in five months translates to less than 10000 a year. Even if this could be maintained over the next decade, which I doubt, it would not even make a dent in the unemployment.

I dont understand the negativity in the comment, is it enough… Definitely not, but its damn well something mate. Gupta did nothing but destroy, at least for those 3000 people, it is a start, sometimes all it takes is one chance one opportunity and that person can drag themselves out of a bad situation through sheer determination…

My problem is that they are tinkering with a very bad economic system. The ANC acts like and is a communist organisation, try to do central planning for everything and then they are shocked when the outcome is not what they were expecting. My solution would be to eliminate most labour AA, BEE and such laws for companies under a reasonably high yearly turnover, say R500 million. If you would start up a business you would find out how hard it is to get rid of useless employees, so most small companies do not want to grow, even if they have the opportunity. Add to this the enormous amount of time and energy required to do all sorts of admin required by the government. Large companies can afford to employ several people for this purpose but if you run your own show there is simply no money to employ somebody to do this rubbish.
Singapore and Hong Kong did not become major economic centres by producing more paperwork than actual goods.

I think the “negativity” is rooted in the absolute catastrophic dismay the average South African have….when you see people driving over stop streets,red lights,throwing trash next to a dustbin or out off a taxi…..not even a million job opportunities will change this.

Ok, im on the same page then, its an actual real total negative view based on systemic issues.

This programme, is a band aid on a ANC performed job lobotomy… Its a nice gesture but not bear enough.

If its in the right direction lets get behind it though.

Well done to YES.

Ray, please get formal response from the DTI and the Presidency on the two failures you mention in this article (delayed gazetting and the fiasco on 2.5%). The end objective should be to force DTI to name (to the public and the President) those accountable and to provide evidence of how DTI has held them to account. Over and above that, there should be at least one senior resignation in DTI with iron fist in velvet glove message from the Presidency regarding competence, work ethic and commitment by civil servants.

Unemployment is when a country creates more people than the jobs it creates. How clever is that. Nobody focuses on less people, by curbing population growth and illegal immigration.

At Yebobru: It was Zuma (and the whole ANC backed him until close to the end) that enabled the Gupta damage.

Anyway, this YES story is being publicized for election purposes. There is no overarching long term plan that, step by step, is being implemented.

The National Development Plan is just one of several “brands” the ANC is waving around. The others are, when needed, the Freedom Charter, the National Democratic Revolution and the New Constitution, depending on who the ANC is speaking to. There is no commitment, well, to anything, except power.

Relax the labour laws!!! Too much regulation. Get rid of unions.

Hey, Ray, could you please investigate the reality that any EME or QSE company with more than 51% black ownership has no incentive whatsoever to contribute to the YES initiative. This is inherent in the design of the BEE YES rules, gov. gazette 41866. The consequence is that as the economy is transformed to larger black shareholding in SMME companies (the ultimate goal of BEE legislation), less and less jobs will created under YES. How does this support real economic transformation and liberation?

One has to love the irony. There is catastrophic unemployment amongst the black youth. This is the result of a tanking economy wrought by ANC policies of sanctions, racism and socialism. The ANC have driven their best talent overseas who now grow the economies of Australia, New Zealand, the UK, the USA and Canada, principally. The ANC have also driven massive amounts of capital overseas. This money helps other countries grow, reducing the cost of capital. In SA, capital is scarce and expensive. Huge capital flows are heading to other emerging markets whereas in SA divestment is the order of the day.

Now the ANC realising that revolting youth are a massive threat to their existence, put forward an initiative that will not even scratch the surface. Really 3000 out of tens of millions is nothing in the scheme of things. To get companies to employ these “black” people they offer BEE bribes. Employ the people we say you should and you can now engage in commerce with an appropriate BEE scorecard.

The ANC solution is more of the poison. The more they transform the economy, the more they destroy it.

Absolutely Richard; now let’s add that red tape kills off small businesses that could employ people cheaply by the thousand. ANC government policy and theft kills off construction industry (except for ANC pals – Mpisane, PG Mvundla et al that get paid two or three times for the same work) where employment is quickly and cheaply created. Shoot the taxpayer in the other foot.

The “onerous requirements such as work experience and qualifications” are definitely not unique to South Africa but are found all over the world. We live in a very complex society and the days of trading oxen for tobacco and beads are long over.

Ok, assume half of all unemployed are youth i,e. younger than Oros (Collen M)? Say 5m unemployed – will only take (5m/671)=7,451 months (621 years) to bring unemployment rate to zero at this rate.

What is the NPV of each of these jobs to the South African economy i.e. do they add value after taking into account the effort and cost required? I suspect the answer to this is less than zero.

Typical socialist intervention.

With the ANC list looking more like an Interpol list and there being no end in sight to the ANC looting, the ANC is still ruining the futures of most South Africans and robbing any hope of employment creation.

For more than 12 years the ruling party has not taken unemployment seriously plus we are at the cusp of serious economic strife if things go against us i.e. the rate could go higher very quickly. Is the high unemployment rate some bizarre ANC plot? I ask because everything they do seems anti-growth, anti-business, anti-competitive and almost certainly makes this country a less desirable investment destination.

How much funds have been allocated to this and how much funds have been spent and what results?

“initiative is creating an average of 670 work opportunities per week for young people who have never had an income and work experience.”

Does this mean if I have worked before and had had an income I won’t be considered for work opportunities created by the YES programme?, I’ve only work menial jobs and don’t have a qualification, I was really hoping this will be my chance to get into a professional working environment and have the reputable work experience and qualification if possible but if YES is for those who have never worked before then it’s not helping anyone, we take menial jobs to feed ourselves and families, it’s people with this kind of experience that must be prioritized and considered lest they continue to be exploited by businesses that do not support programmes like YES.

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