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Newsletter: From Evidence to Action

SA missing growth boat over jobless youth

South Africa does not look likely to reap the "demographic dividend" of a growth spurt in the working age population because of high unemployment levels, particularly among the youth, statistician general Pali Lehohla told media on Thursday.

Addressing a media briefing at Parliament, Lehohla said labour absorption of young black people - based on the age of 35 years and below - was particularly poor.

Lehohla, who released the Labour Market Dynamics in South Africa 2014 report, said a great deal of money was being put into the sectoral education and training authorities (Setas), but the impact of these state-led authorities was not "magnificent".

"The whole Seta system needs to be questioned," he said, noting that there was not a high correlation between its training and the trained getting jobs.

Employed youth rate declines

While the number of young people (those under the age of 35) and the working age population (those aged below 64) increased from 18.3 million in 2008 to 19.5 million in 2014, the number of employed youth declined by 467 000 to 6 million while the number of unemployed youth increased by 319 000 to 3.4 million.

The limitations of the education system in South Africa had a big impact on youth employment prospects, the statistician general's office reported.

Over the period 2008 to 2014, the education profile of young people had improved, but the share of young people with jobs who possessed a below-matric level of education dropped by 5.3 percentage points.

In contrast, people with a matric and tertiary-level education increased by 1.8 and 3.6 percentage points respectively.

"Despite this improvement, one in every two unemployed youth had an educational qualification below matric," Lehohla reported.

While the good news was that 1.1 million jobs were created since the economic crisis of between 2011 and 2014, the bad news was that unemployment rose by 624 000 to 5.1 million. Total employment was 15.1 million.

Potential for economic growth

Lehohla explained there was an enormous potential for economic growth and social development in countries with large youth populations.

A "demographic transition" occurs when a population shifts from high fertility rates and high mortality rates to low fertility and mortality rates.

A "demographic dividend" is garnered from the economic growth that can result from shifts in a population's age structure, mainly when the share of the working age population (those aged from 15 to 64) is larger than the non-working age share of the population (14 years and younger or 65 and older).

However, while South Africa's fertility rates were dropping, the burgeoning young population was not being absorbed in employment fast enough, Lehohla explained.

Thus it was missing out on the economic growth created by a demographic dividend, he said. "It can't happen with the youth having this kind of unemployment levels."

Gauteng and Western Cape lead earnings

Meanwhile, the Labour Market Dynamics in South Africa 2014 report noted that median monthly earnings for the employed is highest in Gauteng and the Western Cape. In Gauteng, the median monthly earnings are R4 333 a month, while the poverty line in that province is R523.

In the Western Cape, the median earnings are R3 423 and the poverty line R545.

The national poverty line is R501 and median earnings are R3 033.

SA missing growth boat over jobless youth