PODCAST | debriefing on STATS SA quarter 3 - Youth Capital

PODCAST | debriefing on STATS SA quarter 3

According to the Quarterly Labour Force Survey for the third quarter of 2021, 46,5% of the South African population is unemployed, and 3.9 million people are discouraged job-seekers.

Zooming in on youth unemployment, 4 in 10 young people (aged between 25 and 34 years old) are unemployed and 9.4 million young people are not in employment, education or training. The survey further reported an increase in the number of discouraged job-seekers to 3.9 million.

Youth Capital, The Daily Vox and Open Dialogue wanted to understand these numbers better, especially in the context of our economy and of the growing call for the implementation of a Basic Income Grant (BIG); and hosted a Twitter Space with economist Duma Gqubule and Christina Van Straten, the Basic Income Grant Advocacy Intern at the Studies In Poverty and Inequality Institute (SPII), to gain more clarity on the issue.

‘Unemployment has risen by 17% in the past year; while the government continues to make promises around job creation, there is nothing it can do besides implementing the Basic Income Grant to revive the economy.

Christina Van Straten

How did we get here?

Duma Gqubule offered an analysis of the situation.

“We have an unemployment rate of 77.4% for youth, 51.1% for black Africans, 55.6 for African females. Looking at the provincial breakdown of unemployment, the Eastern Cape reported the highest unemployment rate (expanded), standing at 54,5%.”

He also asked Duma to give you a refresher on how we got here.

“I am going to start in December 2008, since we had a different unemployment cycle since 1994. Between 1996 and 2003 we had a Growth, Employment, and Redistribution (GEAR) policy, a slash and burn neoliberal stabilisation plan -during that time, unemployment increased from 4.6 million in 1996 to 8 million in March 2003. From March 2003 to December 2008 we had a boom in our economy, where we created 3.1 million jobs and the unemployment rate (expanded definition) fell to 28.7%”. Duma added that since December 2008, our economy has not grown, and underlined the strong link between economic growth and employment creation. Between December 2008 and September 2021, the labour force increased by 6 million people; the job market shrunk by 500 000 people, and the number of unemployed people increased by 6.5 million people, and now we have 12.5 million unemployed people.

To add to this picture, the lockdown negatively impacted our economy. “Since March 2020 to September 2021, we have lost 2 million jobs. Every single sector of the economy lost jobs; the trade sector lost 542 000 jobs, community & social services lost 568 000 jobs)”.

Where are we headed?

We had what Duma called a ‘lost decade’, between 2009-2019, where the South African economy didn’t grow. “The government’s own economic forecast shows that our economy will grow by 1.7% between 2022-2024. Since our population is growing by 1.4%, the forecast economic growth will not be enough. Looking ahead, we might have another ‘lost decade’ [from 2020-2030] in economic development and transformation. With 1.7% economic growth, it means that unemployment will grow every year until 2030/”

Duma concluded by saying that ‘South Africa is already unviable, it is an unpleasant society to live in, we’ve already had the July riots; we’re going to have repeated cycles of political and economic instability as we approach 2030, unless something drastic is done to change the trajectory that we’re on.’

We need macroeconomic solutions.

“According to its Annual Report, the National Youth Development Agency (NYDA) has provided support to 2300 youth-owned enterprises, and they have created 8600 jobs [not new jobs], facilitated 4966 placements in opportunities, and provided skills to 2700 young people. This is a drop in the ocean, in terms of the scale of the youth unemployment crisis. He adds that “the government’s response through the NYDA has no macroeconomic impact on the problem that we are seeking to address, what we need are interventions that affect the whole economy“.

The Basic Income Grant is a way of making a macroeconomic impact by providing an immediate stimulus to the economy.

Listen to a recording of the space on Spotify.

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