Youth Capital has officially submitted over 16000 signatures to National Treasury on Tuesday 31 October 2023, to request the ongoing and long-term funding of the Presidential Employment Stimulus (PES), currently under review by National Treasury.
The funding for the programme is due to end in March 2024, and the Stimulus is at risk of not being renewed, with the final decision being announced during the Medium Term Budget Policy Statement tomorrow. ‘South Africa is facing a multitude of socio-economic challenges that require urgent attention. However, the Programme has created over one million short-term work opportunities in less than three years. With 1 in 2 young people unemployed, South Africa simply cannot afford to cut costs on social and public employment programmes. Over 16 000 people have joined us in calling for the funding extension’, says Kristal Duncan-Williams, Project Lead at Youth Capital.
The PES made history in October 2020, when it was launched by the Presidency to counteract the devastating economic impact of COVID-19 on the livelihoods and jobs of the majority of South Africans. The Stimulus laid out an energising vision for the future, and rolled out mass employment programmes in the country across 14 sectors. ‘With 8 in 10 participants being young people, the programme has the potential to advance young South Africans’ income-generating opportunities; its two biggest programmes, the Basic Education Employment Initiative, which ran in nearly all public schools across the country, and the Social Employment Fund, in over 1000 communities, have been providing skills development opportunities and high-quality work experiences’ adds Duncan-Williams.
Short-term opportunities can have a great impact on the local economy. Early evidence shows that communities benefit from these programmes, which are driving money into local economies and supporting informal traders. PES provided incomes, paid at the National Minimum Wage, that have boosted purchasing power for entire households. ‘Young people reported spending their wage mostly on food, in small enterprise and the informal sector, as well as in major retailers, or using it as seed capital for entrepreneurship ventures’ adds Duncan-Williams.
A lack of work experience is a hurdle for young people transitioning into the labour market, with 8 in 10 unemployed young people having never worked before. Short-term experiences like the ones offered by the PES are critical in bridging this gap, offering young people a glimpse into the world of work and a focus on skills development and on-the-job training. ‘Short-term employment supports the efforts of the private sector and in particular small businesses, which provide employment for the majority of formally employed people. We have also heard from hundreds of young people who took part in the Basic Education Employment Initiative, a programme part of the PES. The experience helped them understand their next steps, whether it’s going back to school, starting a side hustle, or looking for employment in a specific sector’ adds Duncan-Williams.
Youth Capital’s latest brief, One million and counting: the Presidential Employment Stimulus shows the national impact of the programme through the lessons of the two biggest programmes, the Social Employment Fund and the Basic Education Employment Initiative. ‘While there are recommendations to strengthen the PES, the programmes has become South Africa’s ace up its sleeve to building a society that works in just three years. It will take decades to solve youth unemployment; but losing the PES would mean reverting back to small-scale, instead of population-level, impact’ says Duncan-Williams.
Earlier in October, Youth Capital published an Open Letter to National Treasury providing evidence of the impact of the PES – the letter, co-written with the Centre for Social Development and the Southern Africa Labour and Development Research Unit (University of Cape Town) has been supported by 84 organisations. The letter has been included in the submission.