The South African born-free generation, those born after 1990, the group that should have the world of opportunities at their feet, are now facing the massive twin-headed monster of unemployment and inadequate education.
More than 70% of the total unemployed people in South Africa are under the age of 34, in other words 3.1 million young people. Those are young South Africans who want to have a job, who need a job, who wants to have that security, and who want the self-respect a job gives you are unable to because the are simply no jobs available, or they don’t have the adequate education or training.
But this is also the promised group. This is the group that should give South Africa the demographic dividend – a rise in the rate of economic growth due to a rising share of working age people in a population, this is the group that is not scared or burdened by the guilt or apartheid, this is the group that will be our leaders and economic factories in the future. So, what can we do?
Well, we could just wallow in our misery and loose this generation which means economic and social disaster, or we can do something about it. And it’s not just the State that should do something about it; it’s up to them to create their own opportunities. It is up to our Youth to create their own futures too.
Which is not to say that our society and government are of the hook, not at all. Our society and government have to make sure the environment encourages and supports our youth. It needs to have real policies that are effectively administered to encourage job creation, education and entrepreneurship.
Such policies would not just benefit the youth alone, it will also benefit the political and economic elite itself, as a productive and economically active population means a faster growing economy, and therefore more wealth and capital creation (not to mention the economic upliftment of all).
Together with a conducive environment created by the state AND the self-empowering young individual, we can tackle this monster.
The DA’s policies for youth development
In the spirit of “less talk and more action”, the Democratic Alliance is actively working on three programmes to tackle the youth unemployment and ensure development.
YOUTH WAGE SUBSIDY
The first one is a youth wage subsidy, to help existing businesses create more jobs for young people. A youth wage subsidy would lower the effective cost of employment, and potentially create hundreds of thousands of jobs without an adjustment of wages or conditions of employment. The proposal states that employers who hire young people be able to claim a tax rebate of R300 per month for every person hired. This rebate would encourage employers to hire first-time job-seekers and those without skills, people who are perennially neglected in their quest for jobs because most organisations are averse to employing individuals without previous work experience or certified skills.
The rationale behind the youth wage subsidy is as follows:
- Today, the high cost of hiring labour in South Africa is one of the key reasons why so many young South Africans find themselves unemployed.
- Most organisations are averse to employing individuals with no previous working experience without sufficient incentive to do so.
- Many young South Africans are inadequately equipped by the education system, to enter the job market on their own merits, without additional assistance from the state, in the form of an incentive to employers.
- It lowers the cost of employment and creates hundreds of thousands of jobs without an adjustment of wages or conditions of employment.
- It acts as an incentive for on-the-job training.
- Pravin Gordhan, our Finance Minister, agrees that if implemented correctly, a youth wage subsidy has the potential to create about 500 000 jobs by 2013.
AN ENTREPRENEURIAL ENVIRONMENT
The Democratic Alliance’s second proposal aims to create an entrepreneurial environment, in order to increase youth entrepreneurship in South Africa, which means more new jobs.
The DA Youth has several proposals as part of this initiative:
- Youth entrepreneurship collateral fund, which would see the government standing surety for young entrepreneurs who qualify based on the merit of submitted business plans to access commercial/private sector credit;
- Opportunity vouchers for passing matriculants that could be used to subsidize a small business or pursue tertiary education;
- Tax breaks for experienced business owners who enter a mentoring programme with young entrepreneurs;
- An intensification of entrepreneurial studies within the Life Orientation curriculum;
- An expansion of career guidance testing to include entrepreneurship as a viable career path;
- A national government entrepreneurship campaign that would see the consolidation of government entrepreneurship resources into one publicised and easily accessible repository
Just also to mention, the National Youth Development Agency (NYDA) recently announced that they will be implementing a micro-lending and mentoring programme for small businesses, which we think is an excellent step in the right direction.
But the DA is also taking the entrepreneurial initiative a step further by running a national business plan competition. This competition is open to all South Africans between the ages of 18 and 30 years old and closed yesterday, 25th November. The creator of the business plan that best epitomises the South African entrepreneurial spirit will win R10 000 from the DA Youth to start their own business.
Lastly, the DA’s 8% growth plan, which is currently under construction, would ensure the much-needed alleviation of unemployment and poverty.
Interestingly, this week the coalition government here in the UK ,announced the Youth Contract to solve the youth unemployment issue over here, and they have a few similar proposals to that of the DA. In essence they have committed to investing £1bn to tackle youth unemployment. They too are aware that businesses struggle to hire young people and so are offering to pay half their basic wage for six months. Also 20,000 more incentive payments will be made to encourage employers to take on young apprentices – both these policies have many similarities to the DA’s youth wage subsidy.
South Africa has overcome many obstacles in the past, from a smooth transition into a stable Democracy in the early 90s, which to this day is something we can be very proud of, to hosting a flawless Football World Cup last year. We can do it again with the challenges our youth face today. We can create a future generation that will be employed, empowered and economical prosperous. And to do it, all we have to do, is work together – for our society and government to create the right environment through real polices that are effectively administered, and for our youth to take responsibility in identifying and creating their own opportunities. We can create our own future.