SA’s unemployment statistics are exaggerated to a degree

2013-04-14 10:00

South Africa’s employment crisis is one of the most serious in the world, with about 35% unemployed.

One misconception is that university graduates face high levels of unemployment. But this is not true.

As a new report by the Centre for Development and Enterprise states, the number of people with degrees has grown rapidly since 1995. And almost all of them have found employment.

In 1995, there were about 460?000 graduates in the labour force, 4% of whom were unemployed. By 2011, there were more than a million graduates and only 5% were unemployed. Because people change jobs, this is about as low as unemployment can go.

The rising number of graduates has been accompanied by a marked change in demographic profile, with the total number of black graduates tripling between 1995 and 2011, from 200?000 to 600?000.

By 2011, whites accounted for only 45% of the graduate population, down from 56% in 1995.

It is important to be clear that the unemployment rate of 5% applies only to university degree holders.

Irrespective of a qualification, the better a person’s education, the more likely they’re to be employed.

Only 26% to 35% of people with no matric are employed. This compares with 55% for those with a matric certificate, and between 81% and 89% of those with tertiary qualifications.

What this demonstrates is that employers are desperate for skills, and also that the national skills crisis is real. Almost irrespective

of the field of study, a university degree more or less guarantees its holder employment.

While more black students are getting to and through university, South Africa’s education system – especially at the primary and secondary levels – is failing to deliver decent education to most pupils.

This has obvious implications for the extent to which South Africa will be able to address its skills shortage.

Still, the growing number of black graduates and their falling level of unemployment (which halved between 2001 and 2011) undercut the claim that business resists employing black graduates.

The unemployment rate for black and coloured graduates, sitting at 7%, is higher than that of both whites and Indians (2%).

Though data is not available, it is likely that this is a consequence of differences – real and perceived – in the quality of the degrees handed down by different institutions.

The continued expansion of university education is important for South Africa’s development and economic growth. In pursuing this, we must ensure that the quality of degrees is maintained and raised. In addition, we must also raise the quality of non-degree tertiary education to reduce the gap between employers’ perceptions of the value of graduates and those with other qualifications.

How South Africa expands its capacity to provide tertiary education is an important issue.

Brazil’s experience, where more than 2?000 private tertiary institutions have opened in the past 15 years, illustrates the opportunities that can be created by expanding the role of the private sector in tertiary-level education and training.

Effective regulation of these private institutions is required to ensure quality and probity, but the aim must be to ensure a “level playing field” and not to obstruct private institutions.

Addressing the skills crisis has long been recognised as a precondition for accelerating growth in the economy. Because our schools perform poorly, there are limits to how quickly the skills gap can be closed by focusing only on expanding tertiary education.

In the interim, South Africa should look to attract far more skilled foreigners.

In addition to facilitating the more rapid growth of the economy, flooding the market with foreign skills would help reduce the skills premium and wage inequality.

The idea that many graduates are unemployed is a staple of anti-immigration advocates. But it is wrong and must be abandoned.

In fact, the nation should embark on an energetic and well-managed recruitment drive for foreign skills. With the economic crisis in Europe, this makes it an ideal time to try and entice thousands of skilled immigrants who could invigorate the economy, train South Africans and manage development projects.

The myth that graduates, and especially black graduates, are struggling to find work needs to be put to bed.

The simple fact is that the nation has done better at increasing the number of university graduates and opening the doors of learning.

We need many more graduates but this is a positive foundation on which the nation can build.

»?Bernstein is executive director of the Centre for Development and Enterprise (CDE). This article is based on a new CDE publication, Graduate Unemployment in South Africa: A Much Exaggerated Problem

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